Transcripts For CNBC Squawk Box 20151204

Jobs last month. The unemployment report seen Holding Steady at 5 t. Futures right now are up and up in a big way. The expectation of course that janet yellen will raise the Interest Rates by the way unless the jobs number is somehow massively negative. Right now dow would open up by 92 points higher and the nasdaq up 20 points higher. All of that could change at 8 30 but well see the other big story of the morning. Members of the cartel not in agreement over whether production cuts are needed. Oil prices at this point, wti crude at 41. 65. Were going to head there for a live report in a minute or two but first michelle has the mornings other big stories. Let me ask you this, were all focused on the jobs report and janet yellen, we get a few more days like yesterday, does that hold off the fed . Theyre deeply effected by the markets. Its not just yesterday. Its possible. Its not just yesterday. If you think about it, its been a year. We have been dealing with we have gotten nowhere in a year and you would have to attribute that to the slow way we are coming to grip with turning the big ocean liner around. And the markets is dealing with it and weve made no head way. Next year, theyll raise in december but next year the discussion will be about how quickly we continue. Whether we get back to 1 or 2 and the normalize it and i cant see how you make headway when youre still sort of dealing with this big macro change in direction. This Inflection Point that we havent had in almost ten years of going higher. So yesterday was pretty unique in that everything sold off. I mean, the dollar, stocks, and pressure ris they said what happened yesterday with those three assets hasnt happened since 1999. All three of them falling. Together. So we hear that the markets are prepared. They telegraph what theyre doing. Now we know but the closer we get to the actual date its like wait a minute. I thought i was prepared. But she might really do it this time and they seem to get 109 was supposed to help manufacturers and the other thick the other thing i was thinking, they always say if rates go higher, if its for the right reasons its going to be okay. Were now looking at reasons are not here today. Were at a Fourth Quarter, what is the atlanta fed at . Below 2 now. Dont immediately say im advocating this. Okay. Citigroup is saying we may have a recession. So the yield curve flattens so is it a better economy . Is it for the right reasons that rates are going up. Can i read this next story . It addresses what she thinks of that question because fed chair yellen is taking issue with the call he was just talking about. Responding yesterday she cant put a number on the risk but is pretty imfatic she doesnt see it approaching anything like 65 . Shes not as worried that its not the right time. In universal murphys law takes over the fed would be trying to keep the increases at a time when the economy is slowing. The way you cant get out. You waited so long that you missed the opportunity and now you should be cutting maybe. If youre going into a recession you cant be tightening, can you . No, we shouldnt mean to suggest that yesterday was driven by yellen because the huge story yesterday, ecb president mario draghi is here in new york today and going to deliver marks at an Economic Club luncheon today. The speech comes a day after they extended the Stimulus Program but not by as much as expected and lead to the incredible volatility. The 3cent move in the dollar fwe against the euro. 108. Yeah but in a nano second to move like 3 cents you know people were dropping like flies. After they didnt move in september we were back to 114 or 115, werent we briefly . Yeah. And then all the way back down to 105. Its just yesterday so clear that everybody was on the wrong side of that trade. Super painful. Some people lost money. A on the of people lost money. Other people said people that predicted parity. I dont know. In asia overnight the nikkei turning in its biggest one day drop in more than two months. Among the reason the stronger yen also a huge move following the ecb decision and disappointment in that. In corporate news, gap posting a bigger than expected 8 drop in same store sales for november. Banana republic was the worst. Avon shares, the companies in advanced talks to sell its north American Business and an equity stake to private equity firm they are urging the company to cut costs and replace its ceo. Five below beating the street. Topping expectations. Up 6 . Calstrs is calling on viacom to do away with dual class structure. This comes with the aging red stone that controls 80 of viacom voting rights. Ultimate ulta with better than forecasted quarterly results. Also upbeat about its guidance. Shares of barnes noble getting hit hard. An unexpected drop in quarterly comps hit by store closures, lower online sales and slowing demand from book tablets. The investigation into the california shooting rampage, well get to jane wells that joins us this morning with the latest. Good morning to you, jane. Hey, andrew. We are expecting an update from Law Enforcement and we hope more answers later today about what happened in this building behind me. Thats where the slaughter occurred. Theres still cars in the parking lot from the victims, both the living and the dead. Will this be an act of terrorism . Is it Something Else . Was this the intended target . A back up . The first of many . Police released photos overnight of the shoot out scene that took place with the presumed killer including the two semiautomatic rifles and two handguns all legally purchased a few years ago here. Farook purchased the handguns. Its not clear who purchased the long guns and sources tell cnbc news that farook had been radicalized and while he wasnt on the radar he had been in contact with people that were on the fbis radar. We also now have the names and the faces of those that died. The 14 people, 8 men, six women, ranging in age from 26 to 60. 12 of them were county workers here at what was a Training Session Holiday Party. Two were not county workers. Police say there were about 75 or 80 people in the room when the shooters burst in. First on the scene was the veteran lieutenant mike madden that gave a gripping account. As we entered into the conference room, the situation was surreal. It was something that i dont think, again, we prepare for and they try to active shooter we talk about sensory overload. They try to throw everything at you to prepare you for dealing with that. What youre seeing, what youre hearing, what youre smelling. And it was all of that and more. You have to be clear in your orders the initial 50 people didnt want to come to us. They were fearful. He said it was very hard to run past people who clearly needed help but with the smell of gun powder in the air he thought the shooter must be nearby and had to continue. A woman that says her fiancee died in the shoot out came to leave flowers as she was accompanied by local Police Chaplains that converged on this area to do what they can. Thats the important thing. The people of San Bernardino city arent loan. Were here for them to do whatever they can to help get them through this very, very difficult time. The focus now is also on how did these two people amass such an arsenal . Pipe bombs. Thousands of rounds. Thousands of rounds of am withdrew in addition. Tools to build ieds. Nbc news or thing that the pipe bombs had all the markings of coming out of the al qaeda online play book for how to build your own bomb. Al qaeda, not the islamic state. We hope to get some sort of answers from government today from the fbi and police here later this morning. Back to you. Yeah we do. L thank you jane wells. Opec leaders meeting in havi today to consider possible production cuts. Steve joins us with the latest. Production cut maybe, production stand by maybe but maybe a production hike because indonesia is back in opec so there may be something technical there that says were going to accommodate indonesia and hike but its the cut everybody is interested in but theres other members that dont want to cut. Theres members that want to be back at the top table of oil. Members such as iran and i spoke to the Iranian Oil Minister and he said that nobody tells us what to do on the price of oil and on the production of oil. Listen in. We dont need to receive any permission from an organization. Very soon we will reach to 4 Million Barrels per day. Yeah, so you can see iran wants to increase production. Wants to get to 4 Million Barrels a day. Its currently around 3. 5 Million Barrels a day and that will increase the headaches within and without opec because you have members desperate to sell more oil to asia. Everybody is after the same barrels. Theyre all trying to have the same demand this year but china is expected to only grow in demand by about 2 next year. I had grate conversation like the Venezuelan Oil minister and he said that he kale to opec to reestablish the influence of opec. We have most of the tradeable oil in the market is opec oil even though we only supply around about 30 in total and he said that the current production levels of oil globally it was, and i quote, a catastrophic situation for opec and Oil Producers and he was calling, i have him on tape doing so for at least a 5 cut in Oil Production. Just a rough rule of thumb thats at least 1. 5 Million Barrels a day. Thats exactly the same amount of oil that opec is overproducing above the official ceiling. The official ceiling being 30 million barrel ace day. Opec currently producing 31. 5 Million Barrels a day. If we see a price spike on the back of a cut from saudi and its gcc allies others will fill the gap. The u. S. Will fill it and russians will fill it and nonopec growth. Theres a lot of ministers here that are concerned if they dont send the right message today and theres already convoluted messages about what saudi will or wont do then theyre very fearful of a demise in price yet again in the First Quarter of 2016. Many of them think though by the middle of the year well see some stabilization but theres still a lot of oversupply going on from opec. Back to you. Thank you steve. I love to watch the venezuelans rigin pain and to r the opek minister beg and beg and beg. I want the government to suffer dramatically. Is chaves going down or something. Big election this weekend. You reap what you sow. Thats right. Its amazing that somebody could make him look good and this guy makes him thats how bad it is down there. I defer to you. Youve been down there. They just murdered somebody down there. Political i defer to you on all things venezuelan for sure. Thank you. Thats the way i should think about it. A dideologically too. You know im right. Thats frustrating. We are counting down to the most important report of the year. If i say it, it must be true. Forecast predict hah the economy added 200,000 jobs during november. Janet yellen spoke yesterday. Less than two weeks before the fomc meets to decide on whether to raise Interest Rates for the first time in more than a year. Chair yellen said in her words on going gains in the labor market serve to bolster my confidence in return to inflation of 2 . How it will impact the decision to hike rates. Chief u. S. Economist and managing so just you. Just me. I dont think. You heard her. So its inflation and its the employment picture. So the stock market is not going to change their mind . No, when you said earlier was the one thing that could i mean, its not this employment report. I dont its hard to invision a number that could dissuade the fed. To get on the board with a quarter point exactly. Its a little sad that were actually, you know, that were actually questioning whether they have the gumption to do that. It shows how they have been all along. That unfortunately, i think, is the feeling among a lot of participants, Market Participants including myself. This idea that you seem to not. We have seen them on repeated occasions get spooked by what the market is doing and thats unfortunately reinforcing bad behavior in a way. Makes it more difficult the next time. Were so focused on the employment report, yesterdays market moves, you see a couple more things like that. Thats what i was going to say. That was exactly it. Listening to what you were talking about. Weve seen the fed blink before. Lets face it. The fed took a lot of heat for not moving in september and that raises the hurdle even more that they need to sort of deliver on what they have been its going to be more difficult not to deliver this time. They conditioned us to think that a quarter point they said conditions, every condition has to be perfect for us to go a quarter point but it shouldnt be that way. How many. Until the meeting . Were a week and a half away. A thousand points in one day might do. Well, you know, again. Its not without precedent. Again, 1 now points. In this world it could be how many things could cause 1,000 points at this point . You need the more sustained, 1,000 points and then it comes back, i think youd have to say you need i would say more jitters than that. I mean, more than a move and three things coming together. The dollar and treasury markets and equities. Would they be adding up to close to a thousand. It takes more. I have to say though, even in this circumstance for the fed to back away among jittery markets sort of like what happened in september i dont know how you and dont forget when they hike it will be the dovish hike. Theyre going to say a lot of very soothing things to the market how about gradual this will be how theyre not on a preset path. Maybe we wont go again in march. Theyre going to try to sooth these markets. What will cause it to be any different thab being able to make a sustained advance . The dollar is still going to be strong. Oil prices are still going to be low. Things are not going swimmingly for corporate america. Energy prices being low is for most for earnings the saw toe Sales Numbers are very strong. We have had 6 of the last 8 quarters with the exception of these week q1s we have had, Consumer Spending is above 3 . Theres a bit of a disconnect between perhaps what the earnings numbers are doing and what the consumers are are doing. What could undermine the market is more pressure on earnings. For example wage costs start to go up. If we dont have the fed, the wind from the fed at our back anymore which we didnt in 2015. We have been trying to get around to finally its going to be the same situation in 2016, possibly 2017. Whats going to cause people to feel friendlier toward stocks . Well, i mean, first of all, you need to see, i think the economy showing resilience in the face of the fed moving off zero i think could help. Weve had drag from trade from inventories. Again if you look at consumer Business Investment and housing this is this private spending by the private sector. We have been growing solidly above 3 for the last two years. Theres more underlying strength there. No, if you take out im taking out trade which is about. 5 . Taking out drag from inventory. Doesnt feel like 3 to me. This is why im saying the economy is more solid. The underlying strength of the economy is more solid than i gets credit for. With the amount of stimulus we have we should be doing so much better so maybe thats why it feels bad but the bottom line is its not booming but its not, i dont think as fragile and this is not the equity market. This is about the economy. Its not as fragile as i fear that people think it may be that the Global Situation could throw us into recession. I think the economy is on better footing. Consumer and business spending, is it stuff that our aggregate spending numbers are not showing the cracks that, you know, i think people are worried about. You should never short a dull market and when you cant find any reasons for stocks to go higher thats always the time to buy. Yeah. Or, actually, and the other thing is too along those lines, right, the consensus is all very negative. Is it . Oh, everybody is worried about the economy slipping. Everybody boy, i think the fed is going to go more than two times next year, i get so much push back. How could the fed hike more than twice. You know, theres a lot of pessimism out there. A lot of room for upside surprise. Thank you michelle. Great to see you. Okay. Coming up, a big announcement on the super bowl. Find out who is going to be headlining the halftime show, next. Youre happy. Everybody probably knows what this is already. But well leave it as a tease. Plus the catch everyone is going to be talking about today. The stunning end to last nights packers lions game and the controversy behind it but first as we head to a break, heres a look back at this date in history. When you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. At t has the tools and the network you need, to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. The Green Bay Packers rallying from a 20 point deficit to beat the lions. They won three or four straight i think on the games final play. The lions thought they had the game won as time ran out but taylor was called for a face mask as packers quarterback aaron rogers was thrown to the turf. Rules stipulate that the game cant end on a defensive penalty so they got one final untimed down and thats when aaron rogers connected with a 61 yard pass hauled in by richard rogers. The packers stun the lions 2723 at ford field in detroit. This was happening on that was on my 3rd or 4th bathroom visit. What time was that . 11 30 . 12 00 . You had been out like a light. That was like number three or four or so. So you happened to see it when you got up. Im just telling you i was so far from having seen the game yeah. I was watching a little hockey and then they start these things so late. So late, i know. Is that to please california . I think normal people stay up until like 11 30. Yeah, this whole morning show routine doesnt work for the timing of the rest of the world. Do you think ben franklin wasnt smart . Early to bed, early to rise, makes a man healthy, wealthy and wise, the vampire life, you see what happens. Its not good. Its not good. Youre pale. I like the vampire life. I know you do. Lets talk about you cant do it though. I cannot. Everyone better circle february 7th on the calendar. Not only is it the date of super bowl l but we know who will be playing the halftime show. Coldplay. Their 7th album head full of dreams was just released today and i want you to know how disappointed i was. Disappointed really . Because i was gunning for bieber. Really . Or maybe taylor swift. That would be my favorite. That would be great. He would be good. That would be good. She hasnt done it yet. You would have expected me to be over the moon about this and i am. Kendrick lamar now and drake and kanye is all i hear in my house. What about sia . Im not sure what i saw that night. How do you spell that . Sia. I had never seen her before. She is awesome. Come on. Absolutely. You didnt get it . No. You watched her . On weekends . Ive seen her. Ive listened to her. Shes great. Ill try it. No and bieber, theres a song i like that he played. I think he might be talented. Just a little. Coldplay is a little highbrow. No, theyre huge mainstream. Great in concert. I mean, ive never i have not seen a coldplay concert but they are great. I have been and im proud of it. You have an asia poster i do not you know and the spinach dip. Say it again. You do the last one the actual no, we cant. That movie was in a different time. Really. Thats not safe. Its not a safe zone. Well have a conversation about mark zuckerberg. I dont know if that will be the safe zone when we come back. I thought you were going to do that. Mark zuckerberg is firing back responding to you knew it was going to come, people criticizing his plans to give away 99 of his stock. That story when squawk box comes right back. Other wireless carriers make families share data. Some way to say happy holidays. Switch to tmobile now and get up to 4 lines with up to 6gb each. Just 30 bucks a line, thats 6gb each plus unlimited video streaming with binge on™. Stream netlfix, hbo now , hulu and more without using your data. And now unwrap the Samsung Galaxy s6 for 0 upfront and just 10 bucks a month. This year tear into the holidays with tmobile. Do something get on the floor oh im not a security guard, im a security monitor. I only notify people if there is a robbery. Theres a robbery. Why monitor a problem if you dont fix it . Thats why lifelock does more than free credit monitoring to protect you from identity theft. We not only alert you to identity threats, if you have a problem, well spend up to a Million Dollars on lawyers and experts to fix it. Lifelock. Join starting at 9. 99 a month. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Welcome back. Mark zuckerberg is defending his big pledge and how it is being structured. The facebook founder announcing plans to give away 99 of his shares to the social network. Zuckerberg and his wife setting up an lcc rather than a more Traditional Foundation. Zuckerberg wrote on book by using an llc we receive no tax benefit from transferring our shares to the Chanzuckerberg Initiative but we gain flexibility to execute our mission more effectively. If we transferred to a Traditional Foundation we would have received an Immediate Tax benefit but by using an llc we do not and like everyone else we will pay Capital Gains taxes when our shares are sold by the ll. See, the country is so polarized right now. Its amazing that this would lead to criticism. That every story, the way a certain segment feels about something, i always have im not going to say exact opposite but the same things they complain about are the things that i commend someone for. Its a much better use to go into a charity and let the private Sector Solutions instead of watching it fall through but then other people say what do they say . You used the infrastructure to drive to facebook headquaters so you should be funding the government. First of all its a very generous thing to do. See, i think its unfortunate that they have to pay Capital Gains and use the llc. Right. Theres a step up in terms of the rates they pay. Id rather all go to charity. But i think the larger sort of you have to write a column on this. The society question which i thought was fascinating seeing all the different critiques and pieces and youre right its surprising. Here is a guy giving away 99 of his money and hes getting criticized for it. You have to give him credit for that but theres an interesting issue about society which is to say if you decided that the top 50 or 100 wealthiest people in america effectively rather than pay taxes on their grand fortune and that the country would take that tax money and the elected officials dull it out, even ineffectively that you took that back from them and you decide to give effectively the power to those 100 people theres sort of this question mark about whether youre then in a society where they where they are then deciding where theyre going to be an whether thats better or not. Im not taking a position on it. Im just saying its an interesting question. Americans have never seen that society. They have no idea what that society is. Latin america for 30 years and still very much that where 8 families in the country control anything. We not anywhere near that and your underlying question is its still far better for those 100 people to dull out that money because theyll be much more the effective deployiers of that money and what is the role of the federal government . It has to be limited. Defend the borders, maintain law and order, enforce private contracts and foster competition and thats it. The poster child of, its three words, you didnt pibuild that. Its the same idea. You didnt create the wealth. You, in fact, it was borrowed or taken or generated by someone else. Its a zero sum game. Its not yours to do what you want with. Its a very different argument that as we go into a globalized world with more and more technology involved well go into a winner take all society and that is absolutely true. Its getting less and less like that. 400 Million People in china no longer live in poverty. But to the extent you believe theres going to be increased inequality, youre going to have people at the very top and to the extent that they dont have to pay taxes and can use that money to give it away how they want to as opposed to how the government wants to represent people on the bottom theres an interesting debate to be have. Its always if you dont want income inequality, everybody is poor. Weve seen the movie. The soviet union. Im not taking a longterm position. Its false choice. Ult mayly you cant keep talking the way you do and present that side and say youre not taking issue but you are because youre the only one embrace it. Dont keep distancing yourself. Somebody somewhere might be saying this somewhere. I can argue a very eloquently just as an outcider knowing what someone else thinks. Its kroyours so just own it. Im not going to own it because im not sure where i ultimately come down on this particular issue. Its pretty obvious. Okay. Opec Oil Ministers are still behind closed doors right now as the markets a wait to hear their production plan. Cohead of Rbc Capital Markets join us now on what this could mean for the price of oil. Good to have you here. Good to be here. You got it, joe. I announced his name wrong. Happens all the time. Sorry. You know, i listen to all the reporting coming out of vienna this morning and i feel like everything that opec says could have been written by george orwell. Like when the saudis say were interested in reaching an agreement to come up with a balanced market as long as the iraqis and iranians go along so the saudis arent interested in any production cuts. Is that the bottom line . We think its status quo. Do you agree with that . I do. I think the message was sentd a week ago at the opec meeting. The u. S. Are increasing in Oil Production and was very unexpected. Happened over a very short period of time and at the end of the day, in the u. S. Its a bunch of independent prodierss and those independent producers will do whats best for their companies which may not be best for the overall market. That leaves saudi in their position. Are they going to cut back production to help or subsidize the u. S. Market . Probably not. Do they want to make room for iran . I think given all tthats highl. So i think its effectively we can endure more pain than anybody else for a honglonger pd of time and well come back to the table at that point in time. So the price of oil for the next year, do you have any predictions . We have been kind of writing about this for the last six or nine months that theres a risk factor that well be in a trading range for crude oil for a number of years. Now how many years is that . Who knows. Could be two, could be one, could be three but i think is more like the period of 1991 and 1994 where you had about a three year period of capacity absorption before the supply and demand lines cross again. We could approximate in the same period and maybe the down side for crude is where it is plus or minus to maybe as high as 60 and you go up and down for a period of time. I remember that period. I paid 1 per gallon for gas back then. Great to have you on. Thank you for getting up early this morning. Thank you. Coming up when we return, keeping america safe. Security front and center in the wake of the attacks in paris and california. The congressman is going to join us when squawk box returns in just a moment. Lets up their satisfaction with some new hold music. exec 2 thats glenn from the mailroom. He djs on the weekends. exec 3 sorry, who is it . exec 2 its glenn, from the mailroom. He djed bills wedding. exec 3 he what . exec 2 he goes by dj glenn, he works way downstairs. exec 3 whatd he say . exec 2 glenn, from the mailroom vo get rid of cable. And upgrade to directv. Call 1800directv. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. Lets dive into that with a democrat from connecticut. Hes a Ranking Member of the House Permanent Select Committee on intelligence. Good to have you here sir. Have you gotten any briefings. Good morning. Good morning. Any briefings you have gotten in the last 24 hours since this horrific incident has happened . Give us any insight into the concerns about home grown terrorism in this country as a result . Yeah we have been pretty closely briefed both on the Intelligence Committee and members of congress as a whole and obviously i cant share what was classified in those briefings but, you know, what was out there in the news is not all that far from what were hearing in the briefings. Theres still an awful lot of questions about radicalization here. Its not time to jump from conclusions but this story is developing rapidly as people do their work on the ground. Why do you think if the authorities said hes been in contact with jihadis thats theres evidence that he was radicalized. That can mean a lot of different things. This is an opinion. Remember radicalized can mean anything from spent time in a terrorist Training Camp to downloaded a video from a terrorist site or got into contact with the brother of a radical or something. So, you know, again we sort of wait for the facts to come in but there are enough questions out there that, you know, that suggest that its worth, are the authorities doing exactly what theyre doing which is tracking down people and phone calls and trying to figure out what happened here. I heard someone liken the gentlemans individuals wife to like the old black widows from days ago where, you know, this is a woman with a six month old congressman, baby, dressed up in military fatigues with a long rifle and went and slaughtered people. Still looking at the Workplace Violence and when you guys say that, dont you hear how ridiculous that sounds at this point . No, its not ridiculous. What is ridiculous is saying its terrorist before all the facts are in. They dont have a bomb making lab in their house. Nobody is disputing that this was a terrorist act so every time something horrible happens were going to call it terrorism. Yeah, right. A horrible thing happened here. A horrible thing happened here, nobody is disputing that but nobody that is responsible should stop saying terrorism until all the facts are in. Let me ask you something now, by the way an porn thing here to remember, terrorism is any time a vie len act is committed with the intent to produce fear, right . So terrorism includes a lot of groups that have nothing to do with radical islamic terrorism which is what i think youre getting at here so its worth being pretty precise about how we talk about it. It was terrorism from the start because it scares people but now we are talking about it. It looks like to say that perhaps these individuals were radicalized is a soft way of i mean, take your time, get all the facts in a rowand we can say it. Are you more worried about what might be described as organized terrorism to the extent that theres an organization like isis behind a group like this. Or are you more worried or this presents herself would you be more anxious if this was more of a copy cat thing and you had an individual going out there and doing this and becoming selfradicalized if you will . Thats a great question, you know, our Security Apparatus which those of us on the Intelligence Committee deal with every day, its very good at uncovering plots that involve phone lets talk about 9 11, phone calls, flight schools, lots of communication with radicalized people. Lots of waves in the pool if you will. Our guys are good at this. This looks more in the mold of the tsarnaev brothers in boston where there wasnt a lot of support there or a lot of transcontinental phone calls and that sort of thing which were pretty good at getting at so in some ways two people that get disgruntled for whatever reason and maybe they were radicalized or whatever who take the time to go on the internet to learn how to build a pipe bomb, who can get guns it can cause a lot of havoc. Thats very different than a 9 11 scenario so in some ways you worry about it more because its hard tore get at lone wolves that may be radicalized and educated on the internet and we may not know about it. Thank you for joining us. When we come back, spotting the scam, were going to tell you how you can protect yourself and your company when we return. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at Norfolk Southern. Cyber war fuelling an arms race. The cost climbed to four billion dollars last year, and ninety percent of breaches were done by low tech technique called phishing, and theres a flood of emails to trick business employees into letting them in the network. This has been happening a lot. Lets bring in the cofounder and ceo of phish me. You help companies protect information. Good morning to you. I have a friend, a ceo of a company, i went to college with, who recently got app email that effectively asked him to transfer money from himself or approve the transfer of money, and they almost did it before they realized what was going on. These are really pretty sophisticated attacks. One billion dollars lost to that scam that youre talking about. Unfortunately, for the attackers, they actually hit my company with it, and we took them down. They did . They impersonated me to my bp of finance asking to transfer funds out. The reason the vp of advance and none of the controls caught it, the reason vp of finance got it, he was vigilant enough, but it said, sent from any iphone, and i use a android phone. That was the trigger in there. Wow. Uhhuh. And so to the extent we can all try to protect ourselves, you get an email, if i get an e email from joe, you know, i i think hes emailing me. What am i supposed to do . Well, be contextually aware. Does he write you an email saying dear andrew, probably not. Wouldnt you just delete it . They emailed me once, impersonating the cofounder to me, they read through press releases, and when i looked at it, and it started with dear, and aaron in his life never where an email with dear. They are nongenerated by computers for the most part, but done in a very targeted way, they are deciding we are going after you in a very specific way and researching it. Want cost is low too. Yes and no. Theres linguists that work. Its organized crime, nation state actors. Theres linguists, malicious software, malware, and whole organizations. The cost is not as low as people think it is, and, unfortunately, most people are focused on, is there something malicious coming through . The real focus should be on awareness. There was criminal linguists out there . People hired for their linguistic skills to do that . A ph. D. In whatever what field in new york working in a media company, and they are writing stories i got ones recently whether it from a friend or colleague, open this drop boxing the. Theres a file in this drop box. You got to see this. Right. I did that this morning. Theres efax transmission, looking like they hold the fax in drop box. For folks that have efax, it comes in pdf. People are trying to fight the problem with technology. I got that, in the last week i got the efax one. Yeah. Joe . When you really hit it big, will you have phish play at your office . [ laughter ] well do whatever you want, joe. I mean, seems like a good idea. They are huge. Right. Youre right, yeah, yeah, we do a lot of crazy thing with fish, or, you know. They come s world ugly and messy. Ideas are frightening because they threaten what is known. They are the natural born enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. The markets change, at t. Rowe price, our disciplined investment approach remains. We ask questions here. Look for risks there. And search for opportunity everywhere. Global markets may be uncertain. But you can feel confident in our investment experience. Around the world. Call a t. Rowe price investment specialist, or your advisor. And see how we can help you find global opportunity. T. Rowe price. Invest with confidence. Bob dylan. To improve my language skills, ive read all of your lyrics. Youve read all of my lyrics . I can read 800 million pages per second. Thats fast. My Analysis Shows your major themes are that time passes. And love fades. That sounds about right. I have never known love. Maybe we should write a song together. I can sing. You can sing . Do be bop. Be bop do. Do be do be do. Do do do be do. Cartels big call, any impact on the plunging price of oil . Jobs in america, highly anticipated employment report now about ninety minutes away. We know what number janet yellen wants, but what about the markets . Let the countdown begin. The catch everyones talking about today. The Green Bay Packers rally from a deficit to beat the Detroit Lions, and big discount double check hail mary from Aaron Rodgers. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Wac back squawk box here on cnbc, first in business worldwide, where we all like to listen to coldplay. They are going to do the halftime show at the super bowl. They have a conscious coupling, chris does, with the super bowl, the American People. The American People. You got the joke k rig, righ. You always had it out for that guy, chris martin. I like chris martin. Took the fantasy from you . I thought they were uncoupled. Shes on the market again. Im a married man. Good answer. I know you are. When you got married, she was unavailable. Michelle carusocabrera is in for becky, and were ready for the numbers. The numbers, ive been told, the most important one in history. Is that i think its last month. Super bowl . The employment report. The employment report . The up coupling. Im still thinking about i know you are. Sorry to do this to you. Paltrow . Yes. Plus, shes loaded now with the business now. And divorce settlement. And forecasters say the economy likely added two hundred thousand jobs, and the employment report is steady at five percent. Lets look quickly because yesterday was ragged. Getting back points back. The headlines this morning, opec leaders immediameet this m. We are in vienna this morning. Steve, good morning. Reporter yeah, thank you very much, indeed. Actually, fascinating meeting as ever. The net result might be they do not change the production levels, but that is a big difference from what they produce anyway. The official level was thirty million bills a day. There are members there, and we heard michelle say earlier how she feels about venezuela. There are members including venezuela desperate for a cut thinking the Current Situation is catastrophic. I got words in the scram now, and they are listening out for that and the comments on catastrophe in the markets. The number of inventories weve right now in eighty five percent and over protection from opec that produces inventories are close to one hundred percent, and that is going to produce a catastrophe. Thats the reason why we propose here today a resolution of five percent of the production in order to reestablish, you know, and to moderate the invenn stories. Reporter saying the market is full of oil, and at the moment, its a disaster for the market, desperate for at least a five percent cut, which would be one Million Barrels a day, but its up likely all the other hawks are going to get it because lets face it, if anything, its going the other way with iraq producing over four Million Barrels a day, and iran desperate to get to the same level, and we heard earlier on from the Iranian Oil Minister who said before as well, nobody tells us we cant get back to the presanction levels once sanctions are gone, which is four Million Barrels a day from ierp as well. Thats the problem within opec. They try to control price without outside of opec. Operational issues. Russia produces ten million a day. Shale has not collapsed, although the rate of growth in shale faded significantly. The growth on average was one Million Barrels, and that was a year ago, and its abated to the region of flat now production levels on shale. Some of the reasons abated somewhat, but chinese demand which was strong on the back of the lower prices is going to abate as well, and so the headaches build up, plus the fact that i spent most of the week in paris, and the people are talking about a post carbon world or app era where we have less reliance on hydrocarbons, and this is fascinating, if we have less hydrocarbons, there could be one hundred Million Barrels of oil left in the ground, and thats it. Obama and others key to the commitments they give at the conference. A whole host of headaches for those trying to stabilize price, an those who think we stabilize early say its a forlonged wish and could be later before theres stabilization and could see similar to the scenario, thirty dollars a barrel or lower. Back to you. All right, steve, thank you for that. Continuing the conversation in a moment with our energy expert, but we have breaking news for you right now. Norfolk southern coming out with a statement saying its board of directors unanimously rejected what they thought was an unsolicited indication of interest from Canadian Pacific. Of course, Canadian Pacific, the Railroad Company that bill ackman installed the ceo, big n investor in, on the program before, Norfolk Southern said a transaction, quote, facing substantial regulatory risks and uncertainty highly unlikely to be overcome. The company said that Norfolk Southerns board concluded the indication of interest is grossly inadequate, and thus far, we have not seen what the price tag would have been that was grossly inadequate. Well look for that and that the Company Expects to cheapen operational ratio below seventy with additional improvement in five years. Well continue to watch what the company is saying, and, of course, this raises the prospect of whether Canadian Pacific comes back with a higher bid here, and they have to be had in the space. I read this, the price was not high enough, and, boy, pay us a fee because of the uncertainties of the regulatory issue, right . I mean, this is just part of the dance. This is the beginning of the dance. Yes. Exactly. When we have them on, they are they are they talked about not surprising. They talk eed consolidation before. They are great operators. They are on the move. Well see what happens there. Oil prices gaining on speculation that opec might curve production at the meeting today in view nanny ya, and dan is the vice chairman of ihs. Good morning. Good morning. Your sense of what they are going to do, well find out soon, of course. My sense is they are not going to do anything. I mean, we talk about opec, the cartel, less than thirty percent of the market, a highly dw lly , and the countries that count have given every indication for its more of the same. Why do they bother to meet . Funny to watch. They ask themselves that. This is not like they are having a great time, but they go through it. December its beautiful. Absolutely. It is, its a ritual, and their goal is to get through it. When you look at go ahead. I was just to listen to the venezuelan opec minister begging for the cut, like, keep dreaming buddy. What do they say to the guy behind closed doors . Its your fault your countrys falling apart . Its a basket case this year. The economy contracting by ten percent, inflation right at two hundred percent, an outstanding example of gross mismanagement in the world. Which is why they are begging. Right. They used to be a power house in venezuela, and now they are seen as beggars and a side show. Uhhuh. I want to know about the price. Your expectations for the price of wti over twelve months, what happens . Next two quarters are tough. Weve seen it. I think the real pain is now being felt in the u. S. Oil sector. Its really felt in the major countries in the world, the cutbacks, and over supply continues. Later in the year is when later in the year or next year we see balance back in the market. The big next thing out there is one is inventories, the other is iran. What this does not capture is the underlying thing is the proxy war. The last thing they do is, here, iran, come back in the market, take the market share back. The iranians, as we saw earlier, its our right, we want the market back. Meanwhile, they are fighting a war in yemen. As a result, doesnt that mean we have low prices for the foreseeable future . Well, i dont know what your fore seeshl future is. I think the next two quarters are tough. I think later in the year or next year, i think its the year of transition, theres process of adjustment going on, but, you know, the market is not going to just it cant stay low like this because youre not having investment you need. The World Oil Market needs another seven Million Barrels a day of production. At some point there needs to be investment. Now its cancel projects. Whats happening in the United States in terms of production and what the saudis hope is production falls dramatically. Has it fallen . I think they, like many others, thought seventy dollars, the show stops. Turns out, our producers in the United States are much more first time. Fifty five they do well. Where they are now is pain. U. S. Production went up after the last meeting a year ago and reached a high level as its ever been. Its been down about five hundred thousand barrels a day. We think at ihs between last april and next april Social Security down a Million Barrels a day. One of the ironies people dont know and whats Holding Production up is bit is increased output from the offshore. Because . Because offshore projects started four to five years ago are adding new oil to it. Whats the extraction price . Running profitably now . Investment is made and that continues, but it is, i think, that the producer what we see now is a lot of pain in the oil patch, and companies have continued to cut back, even as they tried to be more efficient. Where do you land on the debate of exporting . Exporting crude oil . I mean, were the largest exporter of product in the world after russia. I think its absurd we dont that we have this in place. You know, we were if we did, what happens . What would happen is that we would see several hundred thousand barrels a day of u. S. Exports occurring. It would be it would lift and end the gap between wti and brent, and it would be increased viability. So brent goes down and wti goes up. Cant say if oil goes up or down . It would be more comparing the markets, i think, would be the u. S. Tends to rise. Everybody, you know, the congress, Everybody Knows this is ridiculous. This ban is leftover from when we had price controls in the seventies, but i think the administration, rather than doing what would be senseble, just say, get rid of this, has a pretzellike regulation to allow this or that, allow exports to mexico or lightly process rather than facing reality. Are you still expecting a huge wave of bankruptcy in the energy space here in the United States . There was sort of a whole group of people waited for that moment. Its happening, isnt it . The back has not been broken yet. Sixty billion dollars in the city waiting to swoop down and collect taxes. Correct. I think there will be bankruptcies and consolidations, and people are in survival mode. Okay. Dan, thank you. Thank you. Appreciate it. Todays developing story, the investigation into the california shooting rampage. Jane wells joins us now from San Bernardino with the latest, jane . Reporter hi, michelle. The fbi is treating this as a case of suspected terrorism, but they wont call it that officially. They are saying, though, that pakistani authorities are assisting in the investigation because the wife in this case, malik, was from afghanistan, and fro farook, the husband was radicalized, to what extent, we dont know, and was in contact with people on the fbi radar. We are let closer now to the area where farook and malik burst in wednesday, mowed down four teen people, most of them farooks coworkers, and we are hearing from a First Responder first on scene, veteran police, who said the whole thing was surreal. We went further into the building, and that was a difficult choice to have to make as well. Passing people that we knew were injured and needing assistance, but our goal at that time had to be trying to locate the shooters. There were people who were obviously injured and obviously in great amounts of pain, and that was evident in the moans and whales we heard in the room. Reporter names of the victims have been released, eight men, six women. The oldest was sixty years old, the youngest, twentysix. In fact, three of the women were either twentysix or twentyseven years old, most county employees here for a Training Session and Holiday Party in a building thats always been pretty accessible. We have to be on our guard. We cant take anything for granted. I just want to assure my fellow citizens here in california that were beginning to go just as far as we have to to make sure that Public Safety is protected. Reporter okay. Were Getting Police photos now of what was recovered from the rented suv where the couple died in a shootout involving twentythree officers, two injured, sixteen rounds of ammunition in the suv, more in their home, and four guns legally purchased, not uncommon weapons. Readily available, i think, in most states to most lawabiding citizens who are looking for home protection, sporting shooting, hunting, target practice. Reporter now, it disease appear they tried to convert one of the weapons to fully automatic, but failed, and it also is apparent that the woman, the wife, maliks gun, was purchased under californias strict gun laws. Her semiautomatic rifle, and she had, however, had it modified or someone did to hold a larger magazine. Guys, the fbi excuse me, the fbi is trying to talk to anyone who knew what these two were up to, how they amassed this arsenal, how they turned into two people that nobody really thought anything about, but who were willing to drop off their six month old daughter before committing mass murder, and, by the way, farook has a brother who is a decorated u. S. Navy veteran who served on the uss enterprise in the global war on terror. Back to you. Yeah. Really, really, really the whole thing its just been a bad week. It puts me in a bad mood. The whole thing. Im having trouble just not just the incident itself, but the its just the way its been politicized, and i dont know. Unbelievable, isnt it . We talked about how many people could potentially if they take it upon themselves this is the nightmare lone wolf scenario that theoretically we talk about, doesnt take a lot to do that much damage, doesnt take a lot, and you wonder whats interesting go ahead, jane, sorry. Reporter well, its not alone wolf, its a couple. Right. Why . Its just unique dynamic. Not necessarily whether they are part of a larger infrastructure of a jihad group, doesnt matter, only two, okay, two lone wolves, however they got radicalized, however it happened, it can happen in any city in the country at any given time. Well, and whether this and whether who knows. This is some weird hybrid of terrorism and Workplace Violence. Well, thats reporter unique, so much about this case is unusual, so much about it is unlike anything weve seen before. If he was arguing about, you know, there was some argument about even that traces the workplace thing, thats a little bit its unraveling in my mind. It took awhile to build pipe bombs and amass that. He was mad for a while. Reporter this was a plan. This was a plan. Oh, yeah. They got an arating in california for gun laws, from the gun law advocates, and in france, you know, guns, you know, you cant have an assault weapon in france. Anyway. Thanks, jane. Coming up, it is employment friday. Were on the hunt. Job hunt. A Holiday Edition where jobs, where the jobs are with a look at ecommerce in retail positions when squawk box comes right back. Its hard to find time to keep up on my shows. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. More people cyber shopped, jobs are created in dangigital retail. We are in massachusetts for her series, where the jobs are, mary . Reporter michelle, im in a studio way fair uses to shoot photos on the website. Now, for online retailers like way fair, selling Home Furnishing and decor under the way fair brand and others, sales are growing at a double digit pace expected to continue to do so for the foreseeable future. Along with sales growth, theres a lot of job growth in the industry, and Forester Research estimates one hundred thousand jobs will be added to retail, a twentyfive percent increase, and heres analysts. Every Ecommerce Company i talk to has open positions available. The openings are across the board. Everything from marketing to great online merchandisers to people who are data Scientists Use ability experts. Reporter the differentiator between digital and traditional retailing, technology infusing every aspect of the business. Developers filled the online stores, merchandisers determine Product Placement on websites, and create online displays, and marketers driving traffic to the website requires workers with a keen sense of this is using to create the experience retailers hope to keep the customers coming back. Thats the payoff for the retailers, and payoff average hourly wages, Bureau Statistics say are double that which are paid by traditional brick and mortar retailers. Coming up later today, well take you to a college thats actually started a degree in digital retailing, and they did so a couple years ago, anticipating a lot of demand for workers with the skills needed to work in digital retailing, again, coming up on squawk alley, back to you. Thank you for that, coming up, cold play got the call for the big game. The super bowl story when we return in a moment. When we return, stories hoNorfolk Southern, rejecting ka natdian pacific, more on that when we are back after this. Welcome back to squawk box. We have new details on that Norfolk Southern Canadian Pacific story we told you about earlier. The board of norfolk rejecting that offer this morning, claiming that transaction would face substantial regulatory risks and uncertainties and highly unlikely to be overcome. Of course, one of the issues is the price tag. I got off the phone, though with people close to this transaction, and trying to understand where things stand. Perhaps even more than the price, the big issue is the regulatory one, which is to say whether the country is ready to have only two railroads in this country and whether shippers would be prepared to allow that, and then, perhaps, more importantly, the Surface Transportation Board has to review this, and in particular, theres a Public Trust Issue that has to a Public Interest issue threshold which nobodys ever challenged before. This is a new law, and so it has to be considered in the Public Interest to do a transaction like this. We have to tell you, rob knight, cfo of Union Pacific was asked at a credit swiss conference about consolidation in the industry saying the challenges and hurdles, quote, that exist in the stb process are significant. The two big drivers are, he says, has to enhance, not just maintain, but enhance competition, and number two, any merger they evaluate, they look at what are the potential addon fallout mergers behind it, which you with get creative and think any number of scenarios that the stb evaluates then. It becomes very, very difficult. The bottom line is regulators would be concerned about a railroad dualopoly . Yes. That shippers and everybody else complain you could see everybody coming out of the wood work and saying this is a terrible idea, and how difficult it would be. Canadian pacifics side . Opposite of that, which is to say they believe consolidation is necessary. Right. And they believe theres huge value. They didnt think right. So they looked at it. They have lawyers. They have lawyers, and the question, of course, is, as michelle said earlier. This is about the dance. To the extent you believe that, you know, they are are going to come back with a higher bid, perhaps with some kind of breakup fee. Can you ask about the breakup fee . You didnt have that much time. More work to do. Were not done yet. The storys not over yet. Of course not, its eight minutes old. Among the other stories at this hour, avon moving higher, cosmetic in talks to sell its northern American Business and stake to private equity firms, and they took a stake in avon urging the company to cut costs and replace the ceo. This morning, gap posted a bigger than expected eight percent drop, and all three brands see declines. Banana republic was the worst with a nineteen percent decrease. People are not going bananas. Draghi in new york, the speech coming just a day after the ecb extended the Stimulus Program, but not by as much as people expected. That could be newsworthy if he tries to undo what he did yesterday. Could be. Saying the market is wrong, you know this, et cetera, et cetera. Im inventing that, but he could act like u. S. Fed members do. One hour from the jobs report, a big piece of data before the fed raises rates for the first time in more than nine years, and joining us now, the cofounder chief investment of highland capital. Great to have you back, mark, dallas based investment advisers, joining us from dallas. Good morning. See, the employment report today, everybody agrees its super important, but it has to be very, very bad is the consensus for janet yellen and company not to raise rates in a week and a half from now. Do you agree . Absolutely. I dont see it happening. I think what you talked about earlier, what draghi did yesterday making it easier for the fed to begin liftoff, which is long overdue. Why do you think what he did yesterday makes it easier . See what i saw yesterday is a massive selloff in many markets all together that we have not seen in a very long time, and i thought, wow, maybe that makes yellen nervous, actually. Maybe its a reason why she doesnt want to raise rates. Whats interesting is we learned yesterday draghi is no Aaron Rodgers, and the markets were way ahead of him, throwing a hail mary of unbelievable proportions to keep up with it. I think thats just a disappointment. And he failed, in other words . Obviously. Yeah. But lets not forget, the markets, the dollar euro has gone from one twenty five, and the strong dollar is the big key to that tightening of the financial conditions and the feds are worried about it, and the dollar, thats a positive event for financial conditions, and remember, the fed cares about main street, and whats going on in the market is that a strong dollar, low oil, thats great for main street, right . Here in dallas, i was looking at the signs for gas, weve got regular here, and things are great for wall street for main street. They are not great for wall street. Its tough for stocks to go up in the multiples to go up when you got forty percent of the earnings coming from overseas and the dollar continues to be strong. I i think what happened yesterday was rational on a certain sense, but certainly the magnitude of it was difficult. Okay. I have to ask about the magnitude. We ask about stocks, but you basically sit on high yields, right . Thats right. Trading a lot of junk bonds out there. Your market is at the core of the big question about whether or not there is a dangerous lack of liquidity, particularly within the bond markets, and when people see what happened yesterday, the three cents move in a nano second in the dollar, which is just an epic move in the currency markets, treasuries, the dollar, and stocks all falling hard together at the same time, guys in the journal today said its not happened since 1999, a move like that. What happened yesterday, is that a rational market reacting to something that surprised them or is there another problem in there related to liquidity and poor function of the markets . Great question. My perspective, as a Credit Investor and watching what happened in credit for the last year and a half and accelerating in the Fourth Quarter is the idea of whats happening with liquidity, and a lot of people look at the credit markets, and they say, well, look, credit rs it signals recession. I dont see that in the numbers. I think whats happening is what we are talking about the the market the credit market is handicapping a much higher ill liquidity premium, which is a buying opportunity. When you have a liquidity problem, but you dont have a maturity problem or interest coverage problem, theres a buying opportunity. When you look at the taper tantrum, look at the debt ceiling debate, in those two instances, yeah, the market was wider because it was liquid, but when you dont have a fundamental issue because the economys doing okay, you end up with a very nice opportunity, and thats what i think is going on in credit. Now, when we turn to the other markets of treasuries, et cetera, et cetera, yeah, there are certainly seems to be some liquidity problems in some of the markets. Yeah. So as an invester, i understand what youre saying. If you hole the maturity, but youre in a hedge fund. Meantime, youre on assets declining you think are great value at some point, thinking, well, i hold maturity, et cetera, or for longer, at least, but what it guys want reacceptiredemptio redemptio redemptions, youre stuck, right . Absolutely. We spend a lot of time on that at highlands, something that our investors understand. You have long term investors. They see this as an opportunity. We see this as app opportunity. Were doing a lot about that. I think that whats going on in credit is certainly an opportunity. Were not so certain about whats going on in equities and whats going on in the treasury market right now, but i would say that, you know, past under performance is not a guarantee for future underperformance. Always. You really have to resist the urge to buy high and sell low. This is a great opportunity. Thank you, mark. Good to see you. Thank you. Highland Capital Management cofounder and chief investment officer. Tracking home grown terrorists and radicalization of americans, how to handle the growing threat, and what can be done to stop it. Speaking to a former Homeland Security official after the break. Squawk box returnings in a moment. Welcome back to squawk box. Investigators continue work in San Bernardino. We have more on what they are learning about the killers. Reporter good morning, andrew. One of the problems that investigators are having now is that it appears the two shooters, this married couple at the center of the investigation, have damaged some of their computers and cell phone equipment before they went on their shooting rampage. Thats going to make it a little more difficult for the fbi to figure out who they were in communication with, what they were talking about, what information they accessed online before they began this horrible attack on wednesday, and it appears that that makes it some degree more certain that this was an advance, premedicated attack. If they are destroying computers and cell phones before they go on the attack, theres a clear indication this was not just a spur of the moment act. The difficulty now, app drew, for investigators in surveilling all of the possible suspects inside the United States and gathering information on everybody who become a shooter is just the sheer number of people who you put under surveillance in order to do that. Look at the statistics the New York Times r ran before wednesday, difficulty of tracking sympathizers in the United States. At least three dozen suspects inside the United States, the New York Times reported, were under heavy surveillance even before this attack. Also, they said theres been an alarming drop in the number of americans trying to travel to syria and iraq to join the group. Why a drop would be alarming is this. Theres concern on the part of investigators that, ultimately, isis might be seeking to inspire people who are sympathizers inside the United States to stay in the United States and conduct attacks here rather than trying to travel to syria, all the complicated logistics that entails in order to fight with the group on the ground there. Real concerns here over the number of people that might be inspired by isis inside the United States and what they might be planning, andrew. What are the chances that in a week or so, youre down in d. C. , that the the nsa stuff that was signed into law pulling back some of the power just a couple weeks ago, wasnt it . What are the chances that someone introduces something to allow that again soon . You mean politically on capitol hill . Yeah. I mean, isnt it likely someone says we have to do that and introduce legislation to do it . I think its possible. I mean, what you saw was in the reaction to the Edward Snowden revelations, some real political revulsion on capitol hill over the surveillance tactics, but the more you see a threat inside the United States, the more you see a communications between these two alleged shooters here and potential people of interest overseas as nbc news confirmed, intelligence firms have seen, the more youre going to see political momentum build for more surveillance, more Electronics Surveillance in the United States. The problem is, though, who are you going to surveil, right . There is an enormous pool of potential people you could put in the basket. Can you surveil all those people effectively all the time . The sheer numbers here make that a real challenge. Right. Any way that we pull back from the maximum we did. Yeah. After 9 11, people want to go back to i have not seen the pependulum swings back a forth, especially with republicans on capitol hill, and i dont know that president obama would sign. Call rand paul for me. Is he around . Not seen him lately. Nobody has. I dont know. Yeah, look, that libertarian argument that, you know, we need to have encrypted devices, total freedom of speech in the country goes back to a constitutional argument that libertarians and others make. That was the argument postsnowden. You know, well see where the American People come down on this in a democracy, opinions change and laws change. Thank you. You bet. Here now to talk surveillance and security practices in the u. S. , bob, former Homeland Security assistant secretary for infrastructure, what do you think, bob . Are we doing enough . Can there be enough talking going back to the maximum amount of surveillance of what we were doing . This goes to the fact we have blind spots out there, we couldnt pick up communications out, people not overtly radicalized or on a watch list in any way shows theres gaps in the capability to identify folks before they act. Always will be, i guess. So what do we we definitely need if you see something, say something, get that drilled into people again. This might have been prevented. We are politically correct these days. You saw the reports that people next door didnt want to be racist. No, joe. Thats a great point. See something, say something. As trite it sounds as a phrase, its important. It emphasizes the fact we need Community Involvement here. I was a local cop. The best sources we have are not informants, but people telling you things that they wanted to keep their open community safe. They cooperated with Law Enforcement because they didnt want to be in a place where bad people were. We had relationships. Thats a local Law Enforcement function. Its critical that we have that community relationship, but it goes beyond see something say something. Local Law Enforcement has to work with the community and establishing relationships and building that trust level up, so its not about reporting on somebody, but its about knowing whats out of place to act on it before it occurs. And a rating in california for gun laws. One side talking terrorism, and the other side talks gun control. This makes it all so frustrating is on how to handle it, but is that the answer . I mean, it seems you dont let people on nofly list buy weapons, but how many are terrorists . Ten percent . Twenty . Whatever it is, the other ones without due process, you deny them basic human right that stipulated in the constitution. How do you even do that . Yeah. Its a balance, right . You know, when we Start Talking about gun control, its a very ned nedle issue. You buy a gun, you need a background check. Theres gaps in the process. It does not prevent people who want guns from getting guns. We know that. This process is not just a single thing, but a system we have to put in place to make sure we have the right things. Bob, what about offduty cops when they go to stadiums, sporting events, what about conceal carry guys, urging the guys the left goes nuts if you say the answer to guns is more guns. They go nuts. They may, but the reality of it is you cant predict this. Active shooters require an immediate response. The california incident, you probably had the best case book response. In four minutes, police on scene. I know. The entire incident was down in less than a few minutes. Int int int intervening is hard, but maybe its by luck, we need to be doing it, but offduty copping carrying, and typically they do carry, you know, theyd have to be, you know, in the right spot at the right time. Right. The more we have out there, you know right. Mayor of detroit said theres a lot of concealed carry in detroit. He said, yeah, we dont expect terroris terrorists to come here. When he said it, it was, like, i thought thats probably not the most politically correct thing to say, but it was, like, most terrorists do not like the possibility of return fire, and thats why he doesnt think detroits vulnerable because of that. Well, its yeah i mean, its a broad statement, but youre right. We look at this from a professional security perspective, we harden targets. Its not like we put eight, you know, eight aircraft guns or heavy weapons, but hardening a target is putting visible protection out there making them think they will be caught or not be successful in what they want to do, and they go to the next target. Right. The being able to live, to coexist with seeing firearms changes a little. Parisin parisin paris, five years ago, try visiting now. They seem fine with guys standing around with high powered weapons now. They are happy about it. Thats the times we are living in. I think we will for a while, joe. Thank you. Appreciate it. Coming up, Aaron Rodgers and packers pull off the greatest comeback in recent nfl history. This amazing play happening late last night when we return. At the top of the hour, we kick off the special employment coverage. We have strategists joining us to talk markets and how the numbers may sway the fed in coming weeks. Dont miss it. Super huge employment report coming up. Well be right back. You cant predict the market. But through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. Its already called the miracle as packers rally from a twenty point deficit to beat the Detroit Lions on the games final play. Lions thought they won, but a face mask call against the lions gave Aaron Rodgers another chance, when the hail mary was hauled in by the tight end, richard rogers. Incredibly. They stunned the lions at ford field in detroit. Wow. Is that big is. Its a jump ball. I mean, its nice they did it, but i guy did catch it. Come on. Its not like he threw it far and he caught it. It was just thrown up there. He jumped up and got it. Id be happy too. It was thrown a long way. It was longer. Okay. They just skipped over my favorite news. What was that . Cold play. Cold play. I know p. Playing in the halftime show in the super bowl. I know, like, five of their songs, probably. Theres one right now. Is this yellow . It might be. Good for you. Well play more at the top of the hour at eight, we have that going for us. Coming up, i wish wed play the final countdown, now on a geico ad. Using the term loosely, predictions from many strategists. Well be right back. Jobs friday, what do the numbers say, and do they sway the feds decision in what it means for your money straight ahead. The sharing economy and job creation. Inside look at ubers labor model, effect in the economy, and the new valuation. Board member and chief adviser, david, joining us off the big jobs report. Its a super big day for cold play. The grammy Award Winning band making a big announcement in releasing the latest album. Details straight ahead as the final hour of squawk box kicks off right new. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe , along with an drew an michelle and whats chriss last night . Martin. Martin. Yeah. Where are they now . Consciously uncoupled . They do holidays together . They have kids together. Right. They are smiling. Yeah. She loves rock stars, doesnt she . Who is he with . I dont know. Oh, Jennifer Lawrence. He was . Yeah. Somebody like that. Miley, Jennifer Lawrence. [ laughter ] count down to the jobs report is on. The most important one in the history of this universe and parallel universes. This is important. Analysis of i told them not to be together, Jennifer Lawrence and chris martin just get back to the final report. The countdown is coming. Thats europe, right . You have an asia poster in the bedroom, but thats europe or is it asia . Its europe . Okay. Its one of those continents. Anyway, checking out markets in europe at this hour play it again sam . Were down to a half point on both of these averages. You seen the geico ad . You dont watch tv, michelle. Im sorry. I dont andrew, youve seen it, right . I have, absolutely. Good, the band pretty funny. Also watching oil. Were watching it never taking my eyes off it, in fact, up fortyfive cents because of whats going on in vienna and opec, a decision expected any minute. We have a live report from europe. There it is again. Europe. Just a few minutes. Lets get you caught up in other stories talked about today if anything else. Norfolk southerns board unanimously rejected a proposal from Canadian Pacific saying the offer undervalued the company, and more importantly, because its the big issue i hear about around the table is it could raise regulatory hurdles, thats the thing that would stop it, but, of course, this is just part of the dance. The New York Times reports uber is close to the goal of raising Venture Capital goal, benefitting the company at sixty two billion dollars, now valued higher than eighty percent of the companies in the s p, and it remains private, and ubers chief adviser, David Plouffe is joining us live this morning. You told me it was plouffe. It is. You corrected myself. It sounds french. Well talk to David Plouffe. Mario draghi is in new york at a luncheon. The speech coming a day after, of course, the ecb extended the Stimulus Program, but not by as much as some people expected. Now lets move to the investigation into the california shooting rampage. Jane wells joins us this morning from san gebernardino this morning. Jane . Reporter hard to believe its not been fortyeight hours yet since two people dressed in te Tactical Gear entered the building behind me and slaughtered people, and they are treating the case of farook and malik as suspected terrorism, looking at the computers, phones recovered from the house, not willing to say its official yet, but we are hearing a gripping story of the first officer on scene here wednesday morning. Veteran lieutenant mike madden said he got here so quickly he could smell gun powder in the air. People were so panicked they refused to believe at first that the good guys had arrived. The initial fifty people did not want to come to us. They were fearful. They were in the back hallway area, and that actually heightened my concern that and my fear that potentially the suspects were in that hallway holding them hostage and waiting for us to enter into the hallway. We had to tell them several times, come to us, come to us, and, ultimately, they did, and once that first person took the motions forward, it opened the flood gates, and everybody wants to come. Reporter these are Police Photos of the weapons and ammo recovered from the suv where farook andmy li malik were kill. Forty five hundred rounds of ammo found in the apartment and pipe bombs. Was this an intended target, a backup, one of many targets . We dont know yet. The coroner released names of the victims, coworkers, mothers, fathers, sons, daughters, in their twenties to sixties, and last night there was a vigil. This is a city thats been hit hard financially and economically, but people here just cant believe this happened in San Bernardino. They wouldnt have been so surprised in l. A. , but here . Its something that is very troubling as they try to figure out how somebody who was living here, guys, somehow became radicalized as sources are telling nbc news and no one apparently seemed to know. Back to you. All right. A lot of towns in the United States just like that, jane. Thats whats so frightening. Well, as you said, it seems like fortyeight hours . Been a long week. Anyway. Reporter yes, it has. Thanks, jane. Switching back to the markets, less than thirty minutes from the final jobs number of the year. Well get predictions in a bit, but, first, lets talk fed, the markets, and possible premiums. The chief economist, diane, and jeff, strategist for fixed income at black rock, and james lou, strategist at jpmorgan. Do any of you believe that its possible that a rate hike doesnt come in december, diane . Highly, highly unlikable. They really are ready for liftoff, and, you know, something short of a much larger, event, up fortunatelily, the events coall the time. A large market event not enough . Precipitated by external geopolitical interesting that draghi put in the risk when he talked. Nobody mentioned it. Another thing on the continent, europe, another russian situation . I think it would have to be u. S. Domestic. You know, its really were on the countdown now. The countdown clock is on, its december, and nthey are ready. Whats interesting if its a unanimous vote or not. We know the doves like the inner circle and theres charlie evans, who, chicago, and its interesting because they shifted the talk. The timing does not matter as much as the trajectory. If they fix that statement and get Forward Guidance this there, something stan fishers not wanted, i think they corral the cats and get a unanimous vote. Saying were in the countdown, just to work with us, were in the final countdown . [ laughter ] so you can play the music . There you go. There it is. You said the countdown. I said it. Ive. Working with writing things up. You know i love the beaters, joe, and they are always, you know, i think this is hello, goodbye, you know. Thats not bad. Ive been writing it for awhile, and ticket to ride, but you know all the terrible underlying about what the beatle songs are about. I like the place in england. I think its a place. Thats one of the interpretations. Oh, my. Look it up on wikipedia. Oh, my god, diane. I know you, joe. I dont want to go there. Were going with the song and metaphors, go with my theme from the beginning of the year. Its, yes, they are going to go in december, but its all about the pace. Well, thats it. Trajectory. All about that pace. All about that bass . All about that pace. Oh, okay. Oh oh, the songs here. Is that new . See, i dont know that one. All right, that doesnt count with me. In the break, hell explain. The point is, that liftoff is all but in the prices of the market. What matters is what do we get in the communication . Thats where theres a shift. What does that lead the mart to believe about what happens afterwards . People squirm. The closer we are, people squirm. Yesterday should have been positive for us because the differential of us going one way and them the other, that was lessened. Everybody said the problem is that its wider, and it was lessened, and now what happened yesterday . Why did that happen considering what joe said . Well, first, obviously; theres massive disappointment, but in terms of the fed, the reaction, first and foremost, is to the pricing and bond markets, but the next reaction is look what happened to the currency, and, remember, the currency was a pressure against the fed from raising too quickly. You it actually moved in the right direction . Exactly. You took the pressure off. So draghi speaks again today, right . In the United States, when one member of the fed says something and the market reacts negatively, you have another member who comes out, tries to walk it back, seen it back and forth with the u. S. Fed. Do we have a potential market event here in new york . Does he calm the markets saying he misinterpreted me or he tries to bring whatever he failed to bring yesterday . I dont think so. I think, one, its a new chapter for the ecb. Its no longer backstopping potential calamity in europe like he did. This is were beyond that point. Were keep qe, and we never increased the size of qe and qe, but extended it. Tried to talk down the euro ever chance hes had. He doesnt today . The euro moved two percent. Huge. If its worse from here, that changes the story quite a bit, but if the story is things have improved, and that was the kroux crux of yesterday, he is doing what he should be doing. He shouldnt beholding to the markets. Of course not. Its communications. I agree, no one should be holding the options. They all are. At the end of the day, they are. One is, he is consistently talking the talk, and everyone believed him that drove the fed crazy. They had to do action. He put action behind it, walked the walk, and then walked the talk, and then beyond every time he came out and did beyond what markets expected. This time, he set up expectations and fell short. I think thats a communication problem. The traces this time, then, looks like hes the markets best friend again. I think this is a good thing. This is the fed actually should have been doing this all along. A lot of shoulds here. Should have, would have, could have. Hindsights. I think it was a communication err error. The feds had communication errors as well. Handle expectations better going into it. Its an illustration, fed or ecb, using Forward Guidance and use the market to do the heavy lifting. Exactly. Its a very hard policy to manage. Its har to get it right. They lifted expectations and gotten most of that benefit in after the october meeting. Exactly. Six percent devaluation of the currency, exactly the means of transmission. He got most of what he was looking for, and now he couldnt deliver on expectations, backed off a little bit, but the point is is the ecb is accommodative, not as much as they hoped for, but to your point a minute ago, this is a new phase of ecb accommodation. We cant expect everincreasing ra rate of change in accommodation, but look to the fed and ecb, what they are doing, what the fundamentals say because its not marginal change from Monetary Policy driving the markets because monetary policies getting to the end. Okay, quickly, so weve all the old adage is stock markets go up in the face of rate rises as long as it blah blah blah for a good reason. You heard that, right . Yeah, i mean, and were talking about removing accommodation and still being easy. Were not hitting the brakes here. Good news in the economy . Five percent unemployment economy or citi group, atlanta fed, almost recession, teeters on the brink, gdp, which is it . I think its an okay economy. You know, i think its lift and pause. This is one . Well, not for the whole year. One percent . One percent by the end of the year. Okay. What do you think . Seventh inning of what . The Business Cycle at this point. Really . Two or three good years. Two or three years. Janet yellens speech wednesday really made were widdling away. You know, its right. Five percent Unemployment Rate at the low Participation Rates, thats not cutting it. Five percent does not look like the gdp numbers. Its not the same. Part of the answer to the cross currencies is Service Economies are well, doing a payroll report this morning is how the industries break down. Services are well. Earlier this week, we learned manufacturing economy dipped into recession because the Global Economy is weak, so the cross currents, joe, in your answer, i agree with james, the economys in the late cycle, and the question is whether the global piece thats pulling down manufacturing can offset strength seen in services. Dont move, guys. You have to hold your thoughts. James, you know, i dont know, james, like survivor. Youre off the island. These two stay. I thought you were great. Youre leaving . Thats why im oh. Would you let james talk, please . Oh, sorry. Thank you. Great to be here. Thanks. A live report from vienna where ministers meet, the countdown, of course, is on the jobs report, minutes away. Final predictions coming up. Tlyg thinkorswim better. Like a custom screener on your desktop, that updates to all your devices. And you can share it with one click. Wow. How do you find the time to do all this . Easy. We combined every birthday and holiday into one celebration. different holidays being shouted back to work, guys i love this times of year. For all the confidence you need. Td ameritrade. You got this. Prge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. We need to be ready for my names Scott Strenfel and r im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Leaders meeting now to discuss future production level as oil is around forty dollar a barrel level. We are live where they are meeting in vienna, steve . Reporter thank you very much, indeed. We heard from the venezuelan minister, and the Current Situation and over supply is an absolute ka tcatastrophe, and h looks to assert influence over a third of the global oil supply, and yet problems are outside of opec, and within opec as well, and some members like iran want to increase production regardless of pressure put upon them. Lets listen into the Iranian Oil Minister. We dont need to receive any permission from any organization to increase our production at the previous level that we are produced before putting the sanctions. Very soon we will reach four Million Barrels a day. Reporter and the Iranian Oil Minister there talking about the level they want to get back to. They want to get back to around four Million Barrels a day of production, which means theres going to be at least another half Million Barrels day on global production, which is interesting. We already got an over supply in the market by mean estimates of a million and a half barrels. You see the problem of price control that the allies have here at opec. They cant control a host of other things as well, incoming whats going on in paris, where ive been all week, the conference, reducing amount of oil used in the globe, and if they meet aims in paris, we could see a hundred billion barrels left in the ground going forward, which is another major headache for the guys here at opec, as, indeed, the headache they cant work with the russians. Russians will not join in a deal to cut production or control whats going on in u. S. Shale as well. Back to you guys, joe . All right, steve. Thanks. Keep us updated. Thats amazing listening to the gentlemen from iran. Final predictions for the payroll data, the numbers that it means for the fed and economy, were in the final count doup in the number. Heres the future the as this hour, up fifty six points on the dow, up more earlier, up seven and three quarters on the s p, up ten on the nasdaq. Well be right back. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back to squawk box this morning. Lets get around the horn this morning with the panel and final jobs prediction before we get the number. Diane . Im looking for one hundred eighty private. Thats not fair. Five percent on Unemployment Rate, and im naming a number looking for 25 on earnings. Okay. If it doesnt make that, revising the number for it, it will look like a deceleration. Sorry. So its price is right rules. You cant go over. Answer in the form of a question. Should be a strong report. Going with 2200. We are eating the forecast before. Its hard. Professor . Random ten for government, i give it one eighty. Who cares what we think. Its what the fed think, and yellen yesterday revealed the number of saying its one hundred thousand or less to keep it steady. We put together what the officials we know have said, you get an average of there of one hundred,0 hundred thousand. It can be a low number, and in order for the feds to go ahead. Yellen, yesterday, said one hundred thousand or less. Is that an indication she thinks its going to be . I dont think so. They do all the modelling and fun stuff and Participation Rates, if we get job growth of x, given the entrance to the work force, this is what we need to be steady. Okay. And, finally, mr. Santelli, the number, sir . Two hundred thousand, going with the consensus, and i usually dont weigh in on the rate, but i am going to today. I think its going to crack under five percent. I think the wonderful trend of not counting people is unemployed anymore to make things look better will continue. Although, die yane is noddin her head. Its not changed, what are you talking about . In violent disagreement, what . It could be, but theres a low four percent handle by the end of next year. That said, its not that they dont count you cant make stuff up. They count it. They always have. I spend time with the people, you know, you have to spend time with the people and drink because they are so boring. Its a government number. They count it. Thats why we know it. Yeah, we do know it. Its not under counted. The Participation Rate, particularly among prime age adults is low, and thats why we have so many angry people out there and five percent does not feel good. The reason why its a wages story . Its a wages story, but in the issue that yelp went into on wednesday, and that was that we still have a lot of slack. Its a big policy story. It is a policy story. Which number do you make policy on . Right. The regular Unemployment Rate at five percent, which is the number that should drive you not to raise rates. What ultimately decides that because we cant agree is the wages figure, and even though we are not forecasting it, its the more important number for the market. Its in fits and starts. If there is slack out there, you know, we saw this in the ni nineties. People getting a job. Michelle . Coming up, the number you have been waiting for, the november jobs report is right after the final countdown. There we go. Theres europe. Look at that hair band. So much hair. Do you think you could . So much hair. Look at all that hair. Final countdown to the numbers after the break. Futures higher at this hour. See what they do after the numbers come out. Reach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. S all right, the boards this morning, what the markets are doing, and before that, the Dow Jones Industrial average, if it opening right now, higher by fiftyfour points based on the futures so far. Well see what happens when the futures come out. Whats going on with the yields at this hour . We saw trash reasuries fall acr the board yesterday. It is time its time for the november jobs report, Hampton Pierson is outside the labor didnt. Up two hundred, foreign payrolls increased, and the Unemployment Rate is five percent, average Hourly Earnings increased. 2 , and private sector added one hundred ninety seven thousand jobs in november, significant revisions. Previously, an october number of up two seventyone, revised upward to two hundred ninety eight thousand, and september plus one thirty seven, and revised upwards. An additional thirtyfive thousand jobs higher. Job gains, widespread. Construction led the way up by forty six thousand and preventional and tk Services Plus twentyeight, and food and dras places up thirtytwo thousand, and retail trade adding thirtyone thousand jobs. Losses was the Mining Sector losing 1,000 last month, and since december of the peak, that industry is down by one hundred twentythree thousands, and one tenth uptick total the socalled total Unemployment Rate, nine personality, a slight uptick. With the revisions, monthly job gains for the last three months have averaged two hundred eighteen thousand jobs. Back to you guys. Hampton, almost from the action in the markets, looks like we may have got there. What it took was raise no matter what. We might as well be happy when theres a good number. Rather than Still Holding out hope we get them to put off another rate. Remember when we went the markets go up when they have doubt as to whether to rise. Now we know they raise. Lets embrace it. Maybe, who knows by the end of the session. You think thought we were going to go to rick. Were not. Lets get reaction to the numbers from the panel, and dia diane, youre not going to talk stocks really. No one is talking stocks. You do it. You talk stocstocks, joe. Normally good news in the perverted thinking of traders because they wanted more crack, whatever you want to call it. Treasuries are lower. Right. Yields rise. Theyre going to do it, so just hope the economys doing better. One trick on this, which is that more people employed is always good news. Right. And theres no doubt about i want to share two numbers with you, which is interesting, the work force in the household survey. Who knows what a trend makes . Up three thirteen in october and november, drawing people inning and finding jobs for them, which is why the up employment rate is more or less steady, employed up in the household survey. That lagged behind. This number is incredibly volatile. Its hard to make an investment decision, let alone policy on it, but i pointed out because its the only measure we have after people coming into the work force, and its an idea that backs up what yellen talk about. Quickly, interesting to find good hiring numbers in retail. There was a sense that october numbers we pulled retail hiring forward. We didnt to it. Up in october, up thirtyone in november. Thats a sign that retailers think theres Good Business coming their way. I did work last year. Found their hiring is a good sign of what the Net Sales Growth will be. They are pretty good, better than anybody else predigging what its going to be. We have strength in construction. Why . Strength in housing and residential building. Thats a positive for the economy, and as hampton said, the minus 11,000 in mining. That overcomes a challenge. It hurts in texas and the oil belt, but its not killing the rest of the market. One point here, which i think is really critical about this report. Certainly, its a strong report, but the Participation Rate going up and Unemployment Rates going up, which is a little bit confusing is actually i think why the equity market is doing what its doing because it means that Janet Yellens argument is right, and that means its a very shallow pace of increases following liftoff, and thats exactly what people want to see. Exactly. Yellen has time. She can take her time because theres slack out there. Theres no imminent wage pressure. You did two percent on earnings, a good number, but its not off the charts. Diane, whats that mean . I think its year over year. Its not its a deceleration. Im like you i waffle i waffle you think theres one thing that construction numbers they are good, but its a warm november. We finally were out of the polar vortex for now helping us out a bit, and its going to help in the First Quarter as well. No inventory overhang. Again, this is a fed, liftoff and pause, its a hover mobile more than it is the ten year yield is skyrocketing. By the way, michelle this is whatt the fad has to do on messaging, slow down. I love the yield curve. Its steepening. It is . Fantastic. It was at a low that qs rick, right . Its down at one thirtytwo, and its a thirtysix spread, rick . Well, yeah. The yield curves flattening. The long end is challenging. The high yield close we had established after the last employment report, but i would continue to look for this to run because in the new world where we grade on a curve, we should all celebrate. Its not quite eight years. Were finally normalizing. Europe has negative Interest Rates, now normal operating proceed chur proceed, and the october of america, removing Crisis Management after seven and a half years. Whats not to celebrate . Absolutely. I get it. The long end probably will see close to two and a half percent. The odds are going to continue, but i still will put an asterisk on this. If you down the s p on the first day of the twoday meeting are each 1 down on the year or more, they will not raise. Now, thats pretty much dows pretty much close to unchanged today. The s ps going to be back in positive territory, but i think its still razor thin on what they actually do. I dont know, year end Interest Rate increases are probably a bad idea. Even if we really had a good economy. Wow. Is there an intellectual thing i just missed here . Michelle, why is it weaker now . Meaningful or just i think you have some k comeback from yesterday, right . I thought it was the same from yesterday. Bring back the twoday chart of the dollar index if you can. We have the dollar sky rocketing, getting most back from yesterday. The selloff from yesterday does not begin to bring back the change. Look at this. Such a steep, steep decline even with the rise you get now, its not making up for it. Jeff, do you see the yield curve, looks like its steeper this morning. Its a modest move. Its flat. Its basically a little bit stronger than expected report. Its a little bit stronger in terms of revisions. The earnings figures, that was roughly what the market expected, but the strength of the Participation Rate, that means in the future wages rise. Theres a modest boost in rates. Its not a huge message. They had more sense of wage pressure. It was widespread, the pressure, and even in other areas, and yellen at least suggested it runs. She gets to 3 . Peoples wages go up, and its not a problem. Trying to reflinflate the economy. She sees the opportunity to overshoot a bit on Unemployment Rate, let it fallower, bring in more participation and get wages to accelerate, we regain ground lost. I think thats pivotal here, and thats why, with these good numbers, the messaging will be a really glacial trick. We should turn to what joe talked about earlier, the alternate universe. There is one and its stocks. Stocks are going through a profit recession. Profits have been flat. You have some negative. Severe challenges in oil and gas. Strong dollar. Does anybody see jeff, do you have a thought on whether or not the profit troubles we have, the challenges we have is next year a better year for profits . The conversation we have is profits. Record m a. We get an environment without profit power, thats compression, a challenge to the picture, and its good for the real economy and average person on the street. Its just a shift in who is getting that larger share of economic not capital, but labor. Right. You see a 2 economy, but one where the market is flat to down in that . We sit here talk about good economic news, but thats not good stock news . Since its on the screen, were in triple digits. Well, and were coming off a triple digit decline yesterday. . Rig. Right. Our year over year profits is 23 after a lousy this year, getting to the issue is the easy low hanging fruit on profits is picked. Rick, you said something on m a, does a quarter point mess up m a . Norfolk southern is down 4. Was it already it was running up on running up on the idea that something was up, maybe theres a deal, and i think, perhaps more than the price projection, the idea of losing antitrust issues. Why didnt people, while running it up, think about the antitrust issues before that . I dont understand. Doesnt look like its going to be down, but thats a move. We have to get the finds and cycle back through the system. Rick, youre dependable. Read the wall street journal, really good op ed about this about the department of justice and fines. I urge everyone to read that. The other big possible event today, steve, mario draghi speaks not to super mario. We sometimes see the fed walk back. When a central banker does not feel like they got the right Market Reaction and misunderstood by the market, its not unusual for them to use the next day or a subsequent Communications Opportunity to redistrict. Its not clear. We had victor talk to cnbc europe this morning. He basically, i think, said the market got it wrong. I kind of think the market got it half wrong in that when i look at the stuff they did, its a lot of stuff. Yeah. Theres a good amount of easing in there, but they were looking as jeff and i talked about earlier, you think im wrong about this, looking at one number, the monthly purchase price, but he can come back today and make a point. They thought the market would give them greater credit for the things they did. Most of those things were already in the market in terms of reinvestments, extension of the time period, what the market was missing and what they looked for was the bigger headline. One idea, what it he repeats the term whatever it takes, saying those three words, maybe some sense or rebound . There was more in it that what people gave it credit for. Bloat it for longer. I think i disagree. The market already had that in the price. Thats why he didnt have a big Market Reaction. Reinvestment was not there before. Okay. Hold on, guys. The final countdown to the show. We already got the numbers, but i dont care. When we come back, ubers ride sharing opportunity and Job Opportunities one ride at the time. The chief adviser, David Plouffe talking jobs and more when we return with david in a moment. politely wait, wait, wait you cant put it in like that, you have to rinse it first. Thats bakedon alfredo. Bakedon . Its never gonna work. Dish issues . Trust your dishwasher with cascade platinum. It powers. Through. Your toughest stuckon food. Better than finish. Cascade. Welcome back, the future of job creation, theres an app for that according to uber. The Ride Sharing Company hails itself as a driver of the labor market earning extra cash on peoples own terms. The share rising to more than 400,000, and half the drivers were workingless than ten hours a week. The company and other startups under fire, though, for how if classifies workers as freelancers and less like fulltime employees. To talk about the impact on economy and jobs, David Plouffe, chief adviser, and also former Senior Adviser to president obama, and i have to mention theres a new valuation reportedly on your hands, david, good morning to you. Good morning, andrew, thank you for having me. Thank you for coming on. When we see the jobs number, just, you know, ten minutes ago, and we think about employment, how should we think about the jobs that uber is creating to the extent that you look at the future, and you say to yourself, this is a whole sort of revolution of new type of jobs . Well, i think why its interesting for me to be on jobs report when i was at the white house, of course, standing next to the president when we got the zero job report number so its nice to see consistently high numbers, but even with the Unemployment Rate dropping to five and cut in half and consistent job growth, but for a lot of people, they dont have enough income so they use platforms like uber. Some use it as a sole source of income, driving many hours a week, but increasing every month, the number of hours drivers drive is reducing. They use it to augment existing income. They drive on our platform ten hours a week. Its a powerful thing for them. What percentage are they e kwif lanlt of fulltime drivers, if you will . Well, its decreasing every month. When we first go in markets, people who tend to come on platforms are people with professional driving history, but as we mature in markets, people hear from their friends or family members, you know, it worked for me, i had not considered a driver, but they are a teacher or nurse. Its decreasing every month, which is important because theres also theres huge economic value, we think, to this, and any one scale, fifty thousand drivers in l. A. , ten thousand in seattle where i am today. A lot of people provided more security for their family economically. Right. David, hillary clinton, who you endorsed back in october, said that the on demand economy creates exciting opportunities and unleashes innovation and raising hard questions, though, about workplace protections and what a good job looks like in the future. To the extent you have full time employees, the number is coming down, but the people out of it and those doing it full time, should they get the benefits that weve become accustomed to thinking come with a fulltime job . Well, first of all, you have to look at, i mean, i think, generally, the reason we grow so fast is the entire Vehicle Market is growing. This is not about how we divvy up the taxi market, but compared to tack xi drivers. They are independent contractors, and they dont have scheduled flexibility. They are in the hole each day renting a car. When you talk to the drivers who are doing this in a fulltime capacity, they value the flexibility as much as people who are doing it four hours a week. Its working for them. Again, i think that an independent contractor model is very consistent, and, again, its not just on demand platforms, but every realtor, financial planners, many emergency room doctors, we have a long history of independent contractor work here in the u. S. Does it boother you its you party hard on uber looking at bill deblasio, hillary clinton, an adviser to president obama, does that frustrate you at all in. Hillary clinton said positive things, and shell say more, and president obama spoke about it in a conference, speaking about the value of flexible earning opportunities for people. Democrats get it. Were an urban company. We tend to, in cities, deal with a lot of democrats who are elected officials who have old regulations they are trying to square with new technology, but what we have to do is go out there and explain more about what were seeing on the platform. This is not something young people are using in a cool way and its in competition with the taxi market. That this is revolutionizing the way people get around their cities. When i was in government, one of the challenging questions was how do we get on scale more wage growth and income. You dont have to convince me. Im a huge uber fan. Speaking of the valuation, probably thank you. I think part of what we need to do is spend time with elected officials. Oh, you have to do that. Its just necessary. Its a different when you see theres 35,000 people in chicago driving on the platform, many coming from the south or west side, its hard to argue thats not a positive economic development. Can you speak to the valuation . People look at 62. 5 billion, a private company, its bigger than many, Many Companies part of the s p 500. Does it make sense now . B, you know, how long can you remain private . I wont speak to the specific numbers reported, generally were once again thrilled theres this much investor confidence. That comes from the fact that people are beginning to understand this is not how the taxi market gets distributed, that were seeing a huge change in the way people get around in the forhire Vehicle Market is exploding. I think the growth is obviously strong for us outside of the u. S. But it continues to be strong here. Thats what people see. As our co has said, were a private company, nothing imminent. There we will focus on trying to build this business around the world. David, great to see you. Would love to have you back. I want to talk about Autonomous Vehicles at some point. Thank you. Appreciate it. Thanks. When we return, jim cramers take on todays jobs report. So whats your news . I got a job ill be programming at ge. Oh i got a job too, at zazzies. friends gasp the app where you put fruit hats on animals . I love that guys, ill be writing code that helps machines communicate. interrupting i just zazzied you. phone vibrates look at it friends giggle i can do dogs, hamsters, guinea pigs. You name it. Im going to transform the way the world works. proudly i programmed that hat. And i can do casaba melons. Ill be helping turbines power cities. I put a turbine on a cat. friends ooh and ahh i can make hospitals run more efficiently. This isnt a competition lets get down to the new york stock exchange. Try to figure out why this year was tough to make headway. Wondering about next year. Well still be in a period that every time the fed meets, will they go up again if they go up a quarter this time . Oil probably not going higher, because we just heard from opec. And i dont know if the dollar gets weaker. Is there a reason to think that in 2016, anything better than this year in terms of stock events . Maybe people feel a little more confident, more job growth, more job security, more money in their pocket because of gasoline. Healthcare costs going up. Rents still going up. Everything just keeps being a push. We end up reaching for companies that have superior growth in the environment. We know, joe, thats just a handful of companies. We have to see things broader. We have to hope to get the financials back, other than the Insurance Companies and a couple credit card companies, otherwise theres not enough to like which is why the averages are stalled. They say when rates go up, a lot of times stocks go up. I dont know if thats the case this time. Certainly not with manufacturing. Doing quite badly. Thanks jim. When we return, the stories that have you buzzing this friday morning. At ally bank no branches equals great rates. Its a fact. Kind of like playing the boss equals the boss wins. Wow every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Welcome back to squawk box. Time to talk about whats keeping you squawking. Stories that have you buzzing. Everyone better circle february 7th on the calendar. Not only is it the date of the super bowl 50, but we know who will play the half time show. British rock band coldplay will be playing the half time entertainme entertainment. Their seventh album was just released today. Would have rather had taylor you said or i was being a little sarcastic when i said bieber. Coldplay is great. Good before we go, congratulations to manit, one of our fine producers on squawk box. We got to get cracking, because i think we have to be there. Theres a wedding. Congratulations in an hour and a has. Were going to the wedding. Were going. Some great food that i want to try. Excellent. Congratulations to both of them. Join us on monday. Have a great day. Squawk on the street begins right now. Good morning. Welcome to squawk on the street, im david faber with jim cramer. Carl quintanilla hat day off. Futures right now, we are set for a higher open after we got those employment numbers a half hour ago. European markets had been in the red given our performance yesterday. Asia had been week. Thats still the case in europe right now. The german dax has been the worst performer over the last couple of days