Transcripts For CNBC Squawk Box 20151211

And this morning the iea says it sees the oil glut worsening. The big reason, demand growth now is slowing while opecs out look continues to boom the ieac Global Market is supplied until at least the end of next year. Wti with 36 and change down another 1 . Even brent at 39 and natural gas, look at that, below the 2 mark. We were you messed it up yesterday. Halftime report we were up like 150 or something . Almost 200. Almost 200. We ended up, up 80. What did you do . Which guy was it do you think . Were you on the show. They were both there. Could have been either one. Or could have been each. But, you know what i think honestly what did happen, oil got weaker and weaker and in the old days if oil went down, it was party. Sit that people think its not as slower or. What is it . The iea saying its demand and not supply. Last two weeks we decided it was all supply. Every guy we had on said it was supply. Maybe its just that the shorts out there in the market are just leaning on it because theyre looking to make money in a year where they havent made much. I dont know but it seems like every day and when she said the dow was down triple digits youre like no surprise because as you said, joe, the stock market is absolutely trading on wti crude. We dont care about the stock market but the market goes down and its a sick feeling. The one place you would expect it to show up in a more positive way, thats the one place where they have been kind of if you expect anywhere you see that correlation, Lower Oil Prices and better consumer confidence, its not really quite happening. Used to thinking of enriching our enemies in the middle east versus the production where were hurting people that have jobs here in the industry and i havent switched to that attitude you would think the tax cut that people have gotten over the last year at least would have sent people out buying everything under the sun and it hasnt happened. Tax cut for consumers and businesses and people that use oil for input or anybody that has to pay power to keep factories open its just its instead of blowing it on energy you could use it i dont see why its not positive. It still might emerge longterm as a positive but right now all the concerns about the last time we saw a bubble situation on housing collapse it was really ugly. Do you have a problem with me hoping for 25 or 12 oil. No who would. 12 is too much. I remember filling up for 79 cents a gallon. Really . Youre a millennial too. I know. Aint you one of them millennials . Were weird. All they do is play with their electronics. Im getting very oh, you got it right here. Its like a natural reflex too it is hard to tryon that ipad so i have gone to dictating but you cant believe the stuff she comes up with that i say. How about the other big stories today . A slew of economic data, 8 30 eastern, november retail sales and the Producer Price index. Forecasters expect sales to have risen which could ease concerns about a slow down in Consumer Spending. As for inflation, headline ppi is not seen changing held back by Lower Oil Prices. And one more snapshot of the american shopper today that at 10 00 eastern. It is expected to pick up slightly to start the month. The perfect reports here for everything we were talking about wti is below the 2008 and 2009 low. Just barely. On the mark grant list as well. Have we reached the 2009 lows. Its on this chart. You are not on this list . I cant get my email. Were close enough at this point. Stocks to watch this morning, United Technologies is raising the lower end of the 23earnings forecast. A 1. 5 billion Restructuring Plan aimed at cutting costs. Shares of adobe getting a boost today. Companies earnings beat the street for a 9th straight quarter growth for its cloud software. Its pretty good. A mixed quarter. Earnings beat the street but the Home Furnishing companies the sales fell short jet blue offering disappointing guidance. It expects passenger revenue per available seat mile to decline by 2 to 3 and the Corporate Credit rating was downgraded to junk by s p yesterday. The fast food chain announced plans to return 6. 2 billion to shareholders and s p says this is a significant shift from the companys previous financial policy and the ceo is going to join us later live today you don care about that . That might be significant. Those are the longterm trend lines traders always talk about. You wonder where the next move lower is. Its coming. I moved on to yum research. Speaking of fast food, more bad news for chipotle. One of the chains restaurants has been closed for food safety violations. They found repeated violations. It reopened last month after passing inspections following an e. Coli outbreak. What a slide they have been on since this first started to take more prominens. In global news a chinese tycoon gone missing. Shares in companies controlled by the billionaire has been suspended. Reports say the mans employees have been unable to con tack him since thursday and he was last seen with police at an airport in shanghai. China is in the middle of a sweeping anticorruption crack down. Raising lots of speculation about whether its connected to that today or several others that have been hauled in after the stock market swing this summer. In other International Market news china reporting the country has attracted 114 billion in Foreign Direct Investment this year. That is up about 8 from the same period one year ago. Chinas aluminum is promising to shut more production this month and not add any new capacity next year. They want to sure up prices for the metal that have been down slightly. Would you go to a chipotle tonight. I dont think i would. I love mexican food. Its my favorite. But i love mexican food but mexican food even when its fine is suspect. At times. What are you talking about. Im just telling you that things can happen. Its probably the most common cuisine for america. Things for me can happen, if the food is fine there can still be a problem. I love the food there. But would you go tonight . I dont know. This is going to be a problem for sales. Ready for this . Probably. 2009, a low of 3459. Why does it look below. A weekly close. I think we still have a couple more to go and you can expect the headlines to pick up as that happens. Whats going to determine whether you go back or not . Thats a good question. What do you need to see . We need a clear sailing sign. But the location out in seattle are you going to go to every single fast casual place. Did you have your initial bout down there . I didnt. I had three days. That didnt happen to you. No. I had a three day spell. I went roadside taco stand too that has nothing to do with chipotle. I did too. That was exactly where i was too. It was delicious. But i had paid my dues. You got off the airline and hit. Tried to stay away. Passport control. But sooner or later youll get something. Anyway, so you never had any problem. You got an iron stomach . It happens to most americans. I went to morocco once and i was the only one. But all rice is all i ate the entire time. I said that stuff happens. Fords head of Research Says the Company Wants to develop Ride Hailing Services that can compete with uber and lift. See this guy travis. Yeah. Man of the year. Ford will launch a Pilot Program we moved on again. Will let employees in michigan use smartphone apps to hail rides in specifically designed ford transit fans. The auto maker is considering expanding the Service Beyond its corporate campus. And in other news from ford today ceo mark fields announcing plans to invest 4. 5 billion more in electric cars by 2020. Were building our leadership really driven by customer requirements and even with gas prices low fuel economy is still really on peoples minds because they also have short memories. They know it can go up. Its down right now but its part of building on our leadership and responding to customer needs and also at the same time being aware of the regulatory requirements. Late next year ford will launch a new version of its focus. It can recharge in just 30 minutes. Lets check on the markets this morning. Taking a look at what has been happening. Here the dow futures lower by 138 points and were keeping a close eye on whats happening in crude oil nearing 2009 lows for wti. S p 500 lower by almost 17 points now and the nasdaq about 35 and lets check on markets around the world here as well as we look to europe. The worst performer there, the german dax down 1. 8 . The cac in france down 1. 4 . Ftse, italy, all with declines of 1 so were ecoing what we have seen in the overnight sessi session. Turning your attention to the bond market where i think i red recently that the five year note had the highest level of shorts ever. Ahead of the anticipated rate hike next week. Everybody still kind of holding in place here, the ten year is at 2. 21 this morning and finally a check on the dollar and gold. The moves reflect what is happening as well with the dollar. The euro is stronger again this morning. Its up a quarter of percent just below the 1. 10 level. Gold down about 7 this morning. 10 46 an ounce. I like this headline. We try. Stocks having their worst week in the last two no, actually in the last month as investors we need more, dont we . Its the worst week. Anyway, beginning the final countdown to next weeks big fed decision here to set the table for the trading day ahead is todd gordon. Founder of trading analysis. Com and Larry Mcdonald head of u. S. Strategy. Youre the best. Maybe go to chipotle tonight. So, ill start with you. So all of this all yearlong were like where we started. A lot of markets, except for oil. Its time to look ahead now. 2016 be any different in your view with many of the same things happening . I think with the dynamics being pulled forward its going to get worse. I think volatility is set to explode. Is that down volatility. Volatility up. I think markets down. I think with this move in the futures now the s p is negative for the year and if you just take a look in 10 minutes it could be positive though. Thats the thing. Yesterday at the close we were up. 2 . When we open now well be down for the year. You take a look at the disparity in the markets. You have the xly which is Consumer Discretionary up 11 or 12 for the year. Compare that. Its been an unbelievable Trading Market and youre starting to see it deteriorate so that carries through its been this anticipation of a tightening and once we get a quarterback in december were going to think are they going to go another quarter so well be worried about markets tightening at least in terms of fed policy so can it be a positive year if nick growth doesnt pick up . Well, the dynamic around a year from now, the futures are down at 85 and theyre a little bit around 1 . So in other words people expect this big rate hike over the next year. That should still be plend the fed meetings, the expectations is so high coming in that they put a more dovish spin over the next 12 months. Expectations are so high that the fed could talk down the dots and talk down the future policy path and that could help oil and risk assets. You probably know everybody is expecting and hoping for a dovish hike. She told us yesterday she thinks the fed is going to be one and well let you know in terms of any future rate hikes. How could they not. But if thats the expectation for wednesday then are we confident the fed will be able to deliver that . I believe they will be able to deliver. Theyre going to have to talk down the market significantly its not the hikes that would sink the economy. Its the psychology. Its an exclues to eject from your long position. Its been so built up to your point that markets will want to head lower. You dont think its in the market already . Youre starting to see the dollar. I do and it does leave the equity market so i do think the markets will be lower heading in and oil has not yet reached the low. Looking at the futures continuous contract the low is about 33. We have serious drop in oil going right now and i think that is going to continue to exacerbate and the reason were seeing the drop, we need to turn it back to emerging markets. Look at the hang seng and shanghai they didnt put in anywhere near what the s p did. You think the market will sell off on a rate hike that yesterday people were saying to us if they dont raise rates that will be the big market sell off. I think it sells off either way. Theres no pleasing you. We cant buy stocks but we can have mutual funds and stuff. Do you blow it all or defer all of it. I have some deferred and have to choose mutual funds. I dont know what im doing right now. Did you know what you were doing then . Why am i here . So i got some emerging market i got american like small cap grow growth. These are always horrible. Should i get this matters to me. Should i go into cash . Should i move everything overseas . Will you tell me what to do next year or are you going to talk in these vague tell me something. What should i do. The way to make money is just buy what nobody wants and hold it. If you bought european stocks in 2011. Should do that now . Yes. Because maybe 2016 is a flat year again. You can wait forever now everybody thinks its going to be a flat to lousy year. I heard one person say its going to be a great year. Only one person and you talked to these people all day long. On at noon with scott and his band of merry traders. How is that . Awesome. Can you do that again . I will. But the real elephant in the room to watch is global gdp is 60 trillion. The amount of dollar denominated debt now is 10. So what happened is and the reason why when oil is lower and the dollar goes high wrer ther theres so much debt that is out there tied to oil that is sensitive to the dollar that wasnt there. So because the fed kept rates where they have for so long thats what is making it. What happen ifs the dollar surprises and goes lower even if the fed hikes rates . That is a thought and it has happened before in history that some folks that i have been stalking to site as a reason that you can have a really good stock. I think thats what is going to happen in the First Quarter because the dollar has made such a violent move to your point and now the fed can talk it down by hiking that policy path. Right now the street is looking for this and if they talk it down to that the dollar will go lower and thats going to support Market Equities and oil and commodities. I kind of like the Dividend Fund and look at the Dividend Fund. I think theres going to be shortterm. How many people have said the market is going to be great in 2016 . The last five years. All right. You think im making that up . No. Thats what i said. You got you know, on the halftime report, which appears at noon on cnbc, scott and his band of merry traders talk about this every day, dont you . You might learn something. Well i learn a lot on closing bell with kelly evans. Were not paying him for this. This is great. Coming up its the hottest gift of the year this Holiday Season but now the nations airlines are banning hover boards. Will this impact their sales . That story from Courtney Reagan is next. First as we head to break take a look at this date back in history. While youre watching this, im hacking your company. Grabbing your data. Stealing your customers secrets. Theres an army of us. Relentlessly unpicking your patchwork of security. Think youll spot us . You havent so far. The next wave of the internet requires the next wave of security. Were ready. Are you . Its gotten squarer. Over the years. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Balancing motorized two wheel boards are among the years hottest gift but reports of ten fires in nine states have safety concerns heating up. Major airlines in even new york city banned the devices. They sold 7500 on cyber monday. Slice Intelligence Data shows about 70 of hover board sales took place in november with sales increasing as some prices have fallen from 1,300 in the spring to around 400. In the meantime it recommends certifying its parts. It has been a top concern for retailers with many choosing not to sell them at all. Those that do sell online. So far none is polling them. The extra measure to use certified, quote, adapters and top quality samsung or lg lithium ion batteries to ensure safety. Incidentally all the hover boards are either sold out or back orders. Now razor hover tracks is another model sold at retailers and its history of standing behind its products like the two wheel scooters is wellknown. It warns consumers, to quote, watch out for cheap uncontrolled imports because manufacturing standards are unknown. We talked about this previously off line that a lot of the concern is the counterfeit products. That is different manufacturers of these things are there. It will come from overseas and its where they come from and who manufacture them. My brother wanted a hover board and had to order 8 of them from china just to get one and hes selling the other 7. Are all lithium ion batteries created equal . I dont know but sounds like theyre not. Thats why some of the companies are saying we use ones that are certified and theyre called out as safer options but i think we need to be careful. You need to be careful when you large them and just be a little mindful. Theres a lot of Different Things to consider but a big reason why new york city for instance banned them is folks falling off or bumping into each other. I mean, selfbalancing. If you have ever ridden one its hard. I think for someone that doesnt have great balance its a hard thing to ride. Yeah. Theyre like weaving in and out of traffic. 15 years ago it was dangerous too. No lithium ion batteries. In short shorts. They still work for me. They make them a lot longer. You want to go the short one. Yeah. Show it off in central park. Almost like 80s sort of what was that Olivia Newton john, john travolta, like that. The worst part is visualizing this and feeling sick. Feeling sick again. You got it. Careful on the hover boards. A 500 ticket in new york city. 500. We have a guest later in the program. If youre riding in new york city you get a 500 ticket. Its classified as a motorized vehicle. You need a license for it. You could get a 500 ticket. There are wheels and they took the ground. Six or seven stories up that might be even more dangerous. Yeah. Coming up, congress in final stage talks on massive budget and tax bills. This as the clock ticks toward the threat of a Government Shutdown. First as we head to break a look at yesterdays s p 500 winners and losers. Victoria stilwell, you appear on tv working with canines. Are you a dog lover, watson . I do not own a dog. But i work with veterinarians. How do you do that . I help them analyse over one hundred thousand pages of medical studies. Thats great. cause they cant exactly tell us whats wrong with them. Isnt that right, rosco . Rosco. Who is a good boy . Who is a good boy . You are. Yes, you are. Watson, i think you need to work on your dog voice. When a moment turns romantic why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card. How with directv you could put tvs anywhere and not see cable wires and boxes in every room. Why cant we get people to just say cables, schmables . Hold on, hold on, i really like what youre doing there because if we just add schma in front of something, it just doesnt seem like a big deal. Boxes, schmoxes. There you go. Cold sore, cold schmore. Yes scotch, schmotch what . Ill take some of that schmotch alright. Schmank you vo get rid of cable and upgrade to directv. Call 1800directv. Welcome back to squawk box. In Washington News this morning the deadline to avoid a federal Government Shutdown is today but the senate agreed by voice vote to extend that deadline through next wednesday. The house is expected to follow suit today. Lawmakers are working to finalize a 1. 1 trillion spending bill as well as a tax package. 3rd avenue management is liquidating a nearly 1 billion Junk Bond Fund that bet big on ill liquid assets. Theyre trying to complete th y liquidati liquidation. This is being called the biggest failure in the Mutual Fund Industry since the primary fund broke the buck during the financial crisis and it has a lot of people talking this morning. Its a big deal. Maybe it should have more people talking. Its not as if the fund shutdown. In a way thats happening but for them to just gate it. If it started out, investing in ill liquid securities and then we know what happened in the last month and even longer but its accelerated. Do we Start Talking about the last time something hike this happened . I dont know at this point yet. Well we just did in the story. We did in the wall street journal. But thats what makes it so unusual. I dont know if its time to start extrapolating or not. Maybe its something to tuck back and say okay keep an eye on this because this could be an important moment that well talk about more in a matter of whether its weeks or months or whatever. Like a canary in a coal mine. That would at least justify this move. Otherwise how can you justify it . These investors are strieing to get their money pack after a lot of losses. And what do we understand, were you talking about what were doing here. My only point too is the first time. They vn even started yet. Do you remember the financial crisis where if you marked them to market some assets were 50 below theyre not real. Those bids. That done clarify. Youll get less money out for your clients. Did the investors know . Even though youre right, it doesnt matter if they didnt understand that hey, this money, you might not get it back for years. Right. My guess is maybe they didnt know the extent. Do you ever . Until after the fact . Youre reaching into this junk literally better than 1 but its not double digit is it . The losses. What you were reaching for barely. The average high yield is what, still about five. Im sure there were parts of it where you were. Lets turn to the pharma space now. Megais here and joins us with a special guest this morning. Joining us now is the ceo, thank you for joining us john. Thanks for having me. You just had your r and dday in new york laying out a path for ten trial data read outs in the next year and it would be great to start if you could briefly explain the technology youre working in. Rna interference. Its a new way of going after disease. Its a promising technology. Came out of basic research and we have been leading this into a whole new way of developing medicines. Its basically a way of turning off the bad acting protein and its a very potent mechanism and we figured out how to use it in a way to develop important medicines for patients. What is so interesting is most drugs target the actual proteins but youre going upstream and youre actually turning off the genes ability to do something bad to the body. Think of it like a flood on your kitchen floor. You can either mop up the flood which is what todays medicines do or turn off the faucet. What we do is turn off the faucet so. That approach for new medicines can be frankly revolutionary for a whole bunch of diseases so even Rare Diseases to even more common diseases. Did it have to be a protein that someone has to have a mutation already or Healthy People get other drugs. Its a little bit of both, joe. You could have situations where theres cholesterol. I got that. And thats an exciting opportunity and were turning off a protein that is normally okay and we could lower cholesterol levels dramatically. One number you have to worry about side effects and turn off other stuff. Its a very unstable molecule too. We figured out how to make it very durable. By chemically modifying these molecules and weaken with our program we have a potential for a dosing regimen. Could be revolutionary. The dow dupont deal is official. Its now crossing. Do we have the actual numbers on that . It was expected to be a merger of equals. Theyre up on the news of that report. Do you have something in front of you . Because i dont have it. Thats not out yet i dont think. It was just starting to cross but at any rate that much talked about or speculated on deal that we were expecting this week, maybe yesterday but now were getting this morning, dow and dupont making it official. Around 120 billion is what these companies were worth together. 60 billion a piece. Two of americas oldest businesses. Each by i think more than 100 years old. I wonder if theyll talk at all at this point about breaking it off into three more focus companies. Agricultural, chemicals and Specialty Products. It was expected that edward that was the ceo of dupont would be the ceo of the combined company and the ceo of dow chemical would be the executive chair. Are you sure theyre restructuring dow corning which would have been nice. Because i said i didnt see it and i dont see it. Theyre telling me that its out. No, we know. We all heard it. Dow Chemical Company this morning. Well get the other one soon. What do you mean theyre telling you its out. Who is telling you its out . Well we can just move on. It didnt happen. Theyre restructuring dow corning, 100 of dow corning. I know you want this deal to happen. I dont care whether it happens or not. Announcing a transaction to restructure the ownership of dow corning and you remember that. So the deal is not out. No. The dow dupont deal is not out. Thats why were making it clear that its not out. They should have made it more clear to me. Yeah, they should. Maybe. I dont know how you would have as we wait for that, id like to bring john back in one big issue is drug pricing. Im so curious to know how the executives executives are different from other companies in the industry like touring for example. Is there a stronger level of communication that well see from you guys . Yeah, were focussing on value and innovation and Patient Access with our medicines and i think the industry certainly realizes that we have to be more forth right in terms of articulating that value so i do think that this moment of time is creating some introspection and some perspective within the industry and i think clearly our ability to articulate the value that we deliver to patients is really critical. I mean, we also have an innovation cycle. Lets not forget the medicines we pay for today are free for our children. Theyre essentially free for our kids and if we don fund those medicines today our kids wont get the free medicines. How much of the message that is actually translated in the protein, how much do you have to block. Well, it depends on the disease. In some cases we want to go all the way to the floor. We have a program in. Lets say its 300 base pairs. Do you need a complimentary 300 base pairs . A small snippet. 21 base pairs and harness this mechanism. Thats it. Science everyone. Yeah. On a friday morning. It would be much more specific if you did the whole. It would except that would be hard to do. Hopefully youre not just blocking some sequence thats used elsewhere. We know how to avoid that. Oh, you know everything. Since we know the whole genome. I showed it to him yesterday. He saw my chromosomes. I felt so exposed. I was blushing. I try. John, thank you for joining us. Thank you guys. Up next, crude, how about 80 barrel in the new year. Find out what could drive oil in 2016 even as its under further pressure this morning. As we head to break a quick check of european markets. The dax down 1. 5 . Weighing on u. S. Equity futures. The dow implied to open lower still by more than triple digits. While youre watching this, im hacking your company. Grabbing your data. Stealing your customers secrets. Theres an army of us. Relentlessly unpicking your patchwork of security. Think youll spot us . You havent so far. The next wave of the internet requires the next wave of security. Were ready. Are you . It is official. Dupont and dow are combining. The Company Released news about restructuring its dow corning joint venture and maybe that was part of being able to do the whole deal but it was basically what was said all along. Dupont and dow did combine in a merger. Its a merger of equals. They see it closing in the first half of 2016. It will result in what was also discu discussed. Run rate, synergies. It expects to be substantially tax free. Also this is all what we already said. 130 billion is what the combined market cap will be. Ed breen will be the ceo of the combined company. Shareholders get 50 of the combined company on a fully diluted basis excluding the stock. As approved by the board of dupont and the pooboard of dow they intend to approve a separation. And ceo has been trying to do this as we said for a long time. He calls this a game changer for our industry and it would be three Public Companies within 18 to 24 months. Split into three will be merger closing. Interesting they are just going dowdupont, mashing the name there, and second sentence of the release talking about three independent companies. Had to be done before. I mean, allegiance did not work for united airplane. Dow pont is no good. Pontdue . Coming up, a bold call on oil. Squawk box will be right back. No matter how the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back, crude plunged more than 40 in six months, but by next summer, its hitting 80 a barrel. David, make your case. Whats it predicated on . So fundamentally demand grows next year, supply falls, and the real issue is we dont think the market oversupplied as consensus believes. Recent inventory trends, the report shows this morning that october oecd inventories fell ten Million Barrels for the month on top of normal. Look at Third Quarter inventory draws, and in september, youre only above normal builds by half a Million Barrels a day or run rate. The market is oversupplied through the year, but not to two or three Million Barrels a day. Guys like me get on and suggest its tighter than people believe so if thats the case, then a million barrel a days demand growth and supply growth tightens in the market next year. Did you ever on the way down from a hundred have a sell or negative view on this or picking a bottom the entire way down . Well, its so, one, i hate to pick a bottom on crude because this would happen but in the last year, did you ever identify that it was going to go below 40 . Was that no. You were buying it the whole way down. Why is this any different then . I wouldnt say i was buying it all the way down, but its hard to pick a bottom on crude. Weve always been discussing too. Its the issue for us is that it takes time for u. S. Supply to react to no, i know. Lower prices. Thats happening. A lot of analysts are still stuck. Youre going back to 80, but others are stuck there that they said on the way down. Thats the point. Glad i did not listen to them on the way down, and, you know, it jur undercuts forecasts from here. David, we have to run. Thank you. Laying out the case. And this storys, megamerger between dow chemical and dupont. Thousands of people came out today to run the race for retirement. So we asked them. Are you completely prepared for retirement . Okay, mostly prepared . Could you save 1 more of your income . It doesnt sound like much, but saving an additional 1 now, could make a big difference over time. Im going to be even better about saving. You can do it, it helps in the long run. Prudential bring your challenges breaking news, a tieup between two 60 billion companies, details on dow chemical and dupont and regulatory challenges lay are likely to face. Terrorist attacks in paris and San Bernardino, results of a survey on terror in the economy. The senator weighs in on the fight against isil. Happening overnight, crude prices trading near levels not seen since 2009 with opec increases its fast and furious production by a quarter billion barrels a day. A breakdown on the economy as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box. Enjoying the music here. First in business word wide, im kelly evans this morning, and becky and andrew are off. Lets look at u. S. Equity futures this hour, pointed lower. The dow looking to open lower by 134 points in the implied open there, nasdaq down potentially 28 this morning, but as we said, joe, the big story right now. Whats the market . I dont know. Oil, you said it yourself. Oh, it should be positive. The story of the morning, dew popt and dow combining an emerging of equals, and liveris is the chairman, and breen will be named ceo of the combined company, and david faber is joining us now with more. Is there a single point that is different than what you already told us three or four days ago . Well, we know the ratio and details. The merger, both get 50 . Although buffet owns the preferred and dow, if he converts does not include the preferred. Does not. It would be roughly 52 48. 50 50 said in yesterdays close or the day before, so i mean, they really have. Did they have to get that dow corning deal out of the way before this . Thats why they released that first . That was part of the release . All part of it, confusing there, i know, with the two releases. Unexpected to see dow corning. Forgot about that. I know. They gain more on the Balance Sheet from it viewed as positive, but the government structure here is interesting joe. Never seen anything like this, two Historic Companies together in a mermg ger, setting a struce to allow for the quickest timeline they can on the spinoffs of the three companies weve talked about, materials, ag, and Specialty Products. So much so that they are going to have a combined board of directors, but seven directors drop down from dow into the materials board, and materials, by the way, is run by andrew liveris, executive chairman, running materials. Ceo . Well, he runs it, although hes not call ceo. Seven directors drop down from dupont for the ag to oversee ag, so theyve already got a structure built in, and they split for Specialty Products. Now, its going to be 1824 months after the close of the merger that you actually get these companies out into the marketplace, but it certainly is interesting to see them. They are not, like, trying to jam all the companies together in a merger, but keep them separately run in a sense and have them each merge their businesses together. What happens why is that . Im not sure. Maybe the ratio. Really . Supposedly knew everything. They did. We dont know exactly where the ratio would be. Both stocks up sharply yesterday. Two trading days now since the potential news. Yesterday was down a bit. The structure youre talking about, sorry, and the way its sort of broken up, that has a lot, i would gather, to do with the regulatory process in trying to have it set up or appear in any way to get it further or easier past the government, right . It could helpme menit would but the ag business alone will be twice the size of monsanto. Enormous. Its huge opportunities for cost savings for companies. You see that, okay, what about the regulatory side . Assume it gets the a big assumption it should. Theres not overlap. Its not a big difference. In fact, it would still be a huge competitor, maybe larger than monsanto, but youre right, this brings together im told dow was working with potentially three bidders for its ag business including what i believe one was monsanto until the end to motivate dupont to follow through. To your point, theres Crop Protection and seeds. The key here, joe, in terms of the stock price, and well get a Conference Call and see what the synergy numbers are. We told above 3 billion, and they could not say it, but they put Head Quarters a lot. Analysts say five or six. Dupont, for example, pays monsanto a lot of money for the seeds, for the intellectual property for the seeds. That could end. Excuse me, yeah. So theres a lot of things that could go on here. Which is for sure the slow Growth Business outs of the three, and which is the big Growth Business . Where do they put the crappy businesses, slow Growth Businesses . I dont know the answer to that, but thats a good question. Remember we were sure about viacom and cbs. That was a slam dunk. Right. You never know. You never know. They want out of businesses or is it just separating conflict of interest . To rationalize Business Structure and to be more powerful in the marketplace. Specialty products are what are you looking at . Your suit is cool. The pink lapel. Whats this right here . I cant believe you did that. I know. I did that to leisman the other day. I cant help it. I knew you were, but he wouldnt do that. What about yeah, you know. I have not be with you enough lately. How many layoffs . I dont know the answer. On the call, the last i mean, its got to be a fairly significant number, and, unfortunately, i didnt have the opportunity to ask in the last 15 minutes. Do you know the toal number of employees . Hundreds of thousands, isnt it . Yes. Yes. Well, dow had 53,000 people worldwide, and one would expect that is going to drop. You know, they got headquarters just alone in each of these businesses. Theres any number of them, and they will be closing a few. At the same time, there arent, again, they are not trying to shove the Different Companies together within one structure in any way. Its very interesting to see how they are trying to do this in the sense of get together as an m moe, but not having to deal with issues when you shove two companies together. Well get every single mattered to the environment, for years, the main case investors made the Companies Buy back your shares, and now the main case they make is spin off, slim down, whatever, your businesses, and if you think about whats happening with pfizer and allergan, potentially the same thing, spinning back out again, and now this happens, two get together, but its like instead of calling it a megamerger, it really seems like a megasplit. In a way, it is. It will be each respective companies, obviously, larger than it otherwise would have been, but there was pressure to consider splitting into three with a reasonable question, well, why not just go that path . Particularly because this will take quite some time. I mean, were talking about second half of 16 before this deal gets down and 1824 months, but that point is a good one, kelly, and the fact is pfizer and allergan could be doing the same thing. 2018 could be the time we see them traded publicly and separately. Never seen this at all, but the idea they go in with the plan ahead of time is interesting, and, perhaps, well suede fears on investors to worry about dislocations that happen when you have a huge deal with this and not one side is clearly in charge. Is it emblematic of how tough it is to grow globally . They even cite, right, the tough Global Economic conditions in ag and emerging markets, and that weve had such an incredible year of m a, like, what, david, four and a third trillion dollars . This is, as i said, the cherry and the whipped cream on top of an incredible year. Its hard to grow. Its hard to grow organically given where the world is. Right. It is. Thats been the theme. That is always the theme, by the way, in any m a market, of course, that youll hear from bankers in getting top line growth, doing everything you can, shrunk your account for buy backs, but mergers are the best way to do that. Youre right, scott. We have to wonder how late we are in the cycle. Raising rates . In the m a sicycle, you can remember this, right, joe, can you . Right, no. Last was the private equity guys, the last boom. You did a great job on this. High five. Oh see. Well, first of all, i knew youd never compliment me. This is true. This is what i would have done, go like that when the other guy its very embarrassing, but you do you do that to all your guests . Ive done it, and youre the only one who has not gone for the high five. When we come to break, well do a real high five, okay . And a hug. Dont believe him. No, we are. By the way, we will have the gentleman joining us, andrew liveris, and ed breen later on squawk on the street. Im not. Youre too smart for me. Im not doing it. Okay. And theres the information, watch that interview coming up with david in a couple hours here, and ahead, a new survey data, i should say, on how americans fear of terrorist attacks changed after the shooting in San Bernardino. Thats coming up, and a check on retail. The ceo joins us on countdown of christmas and impact of weakness in china, and the senator joining us on the president ial campaign and a message for Silicon Valley on avoidi ining terrorist attacks, and now the ceo of yum brands to talk about the spinoff of yums china business. Stay tuned. The results of cnbcs all America Survey focuses on terror this time, and they are in, and whats surprising is not that americans are more worried now. Its about who is more worried. Cnbcs Steve Leisman has more. Interested to hear what that means, steve. Yeah, joe, political implications here. First, we did the survey, and then the tragedy of San Bernardino happened. We went back in the field and reached 347 of the 800 spo responden respondents. These are results before and after the attacks. We asked the question, are you concerned about terrorism or how concerned about terrorism are you in america . Not much change here before San Bernardino. By the way, this came after paris, and then look what happened. This gap here, this six point gap between those who were concerned and those who were not opened up to a 13 point gap, and in the next slide, where the concern happened. It happened among those who were very worried, and there was a precipitous decline of not concerned at all. Its on americans minds, clearly, and many more, a third of the public are very concerned here. The prelim implications, i was telling you about, here you can see a big rise among democrats, among those who are more worried. Now, they are not at the level of republicans who are at 45 . Republicans went up five points, but you can see here the gain among democrats, a big gain with a High School Education or less, and a big gain among women. Whats important there, joe, about who is more concerned comes to be, well, this puts pressure on the Democratic Party to respond, and it could also be a boom to the Republican Party seen, of course, as stronger on security issues, joe . Its weird, steve. I guess polls go on, we get more and more specific on asking questions because i dont think everyone is necessarily worried they would be the person that was harmed in the terrorist attack. Its just the overall fear of Something Like that because we all know that its more likely, you know, so many other ways that youre more likely never step outside the house if you saw numbers of being on the highway, whatever, but think about it as we do in an economic sense, its frightening what could happen for a lot of reasons, and thats part of the fear the guys you ask have. Absolutely right. What we did in another question to present later, and ill tell you results now, which we asked people, what are you concerned about . Fear of International Flying was at the top, and going to malls and concerts and big public gatherings was up there, but not quite as high as youd think. I think this is registering, joe, and what we saw for sure is that we did not get a change like you had after 9 11 in some of the questions. We asked, for example, do you think the government needs to go further . There was an increase, but not like the increase we had preand post 9 11. Yeah. Its getting scary for a lot of reasons because, you know, if it you can imagine, and youve seen the numbers on Donald Trumps comments too between republicans and democrats. Right. Some of the numbers are staggeringly high, which is amazing to me given, you know, whats in the constitution, et cetera, et cetera, et cetera, but you wonder if it were to become more common or if god forbid if there were, you know, Something Like that happens, you wonder where the numbers could go, and you realize why in the past, certain things happen that you look at now and say that could never happen here. I think thats right. I think as these numbers that were talking about were to go up, then support for things like what frutrump talks about, thoso up too. Should the government go further in monitoring versus private rights concerns . What you saw is that those flipped, joe, in the eric snowden revelations, when that came out, and since then with the terrorism revelations, it goes the other way and the government ought to do more. Right. Okay. Steve, thank you for joining us, happy friday. David bianco is here, chief u. S. Equity strategist at Deutsche Bank with gabriella, chief strategist at jp morgan. Great to see you. Good morning. In the past, you know, number one, its always to talk about money in the markets and, you know, in light of things like this, its we have to do it, but its always uncomfortable to do it, but in the past, some of these opportunities, when this has happened, presented a time when you shouldnt have sold, but say ill keep my head in and buy. I hate to frame it in that way, but is this situation more serious this time since it seems to be happening with more frequency . Could it turn into something where youd want to be risk averse completely . Geopolitical risk as well as risk of attacks is on investors minds since sev9 11. This is something we live with. Even 9 11, not sold. I agree with that. What you find is major ka tas troe fes like that or smaller engagemen engagements, the market sells off as military prepares to take action, but once action is taken, stocks rally. Same thing . I think the response after the paris attacks, that monday after when markets opened, there was barely a response. Its strange to talk about that, but i think that in some ways investors have gotten used to the idea of terrorism because, ultimately, it doesnt change our patterns of behavior. Normally. Normally. Unless its getting to a Tipping Point where it does affect economic activity. That was in paris, number one, but the same with the different horrific attacks in europe. Exactly. But then theres still that ocean between us, and if that ocean and this country seems to not be a hindrance anymore, i wonder if it could usher in more than just a week or so of fear. Yeah, but i think it was interesting even after the attacks in europe itself. It did not change their pattern of behavior very permanently either. True. It did not affect their economic consumption either, and thats what markets looked at. If we sense, though, that there are more longrun political and social changes happening, dave, how does that affect markets ultimately . It has to. 2016 will be a political year, and sectors Like Health Care and financials and energy that are exposed to politics, thats what we will be talking about, but i do believe that health care and the Technology Sector have strong performances in 2016 despite discussion about politics, particularly around health care. What do you think the s p does next year . Im constructive on the s p, more constructive on the s p for next year than this time last year. Markets up 10 from this time last year. Im constructive on the markets because of the large contribution to the market from health care and technology. Thats 36 s p earnings at this stage, bigger than financials and energy, and that sets the s p apart from its history as well as other global ecstasy indi indexes. I think its a matter of what happens with earnings. Thats the big expectations that earnings will bounce back to mid to high Single Digits next year. What do you think, joe . Realm, scotts going to be back in a second and we have to write the guy down as someone, two that are going against the grain here. Moderately. Moderately. Thank you. David. Thank you. Thank you. Coming up, Trucking Companies face a shortage of drivers and turning to an untapped labor pool in the industry. We have that story from a truck stop in new jersey. Morgan . Reporter hey, kelly. Well, throw everything you think you know about trucking out the window because this is no longer a macho mans world. Trucking companies are going to Great Lengths to bring more women into big rigs. That story when squawk box returns. Time now for todays aflac trivia question. How many packages does ups expect to ship this Holiday Season . The answer when cnbcs squawk box continues. And. Exhale. Aflac and a gentle wavelike motion. Ahhh ahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just one day. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] some of these experimentsere notmay not work. Il. But a few might shape the future. Like turning algae into biofuel. New technology for capturing co2 emissions. And cars twice as efficient as the average car today. Ideas exxonmobil scientists are working on to make energy go further. No matter how many tries it takes. Energy lives here. Now the answer to todays aflac trivia question. How many packages does ups expect to ship this Holiday Season . The answer . 630 million packages. Unbelievable. Hey, truck Driver Shortage pushes companies to actively recruit more women. We go now to morgan brennan, okay, youre just covering this, okay, at the Vince Lombardi rest stop in new jersey. Morgan although, you know, cowgirl of the road, things like that, it is a cool job. Its cool, but it might be boring, i guess . Reporter its a very cool job, and i will tell you, we did a ride along with a female truck driver, well get into that later on in the day. Heres the situation in general. We have a steep truck Driver Shortage and fleets that are now turning to the little tapped labor pool to recruit workers which is women. Women make up just under 6 of the truck driver population in the u. S. , but that is up 4 from five years ago. At warner enterprises, its 9 of the drivers female, and coo, derek letters, says the part of recruiting process is convincing women that they are welcomed. Theres been stereotypes of the independent male truck driver, a macho truck industry, career, if you will, and stereotypes about female drivers, which the stats clearly show are untrue does not help, and then mostly, i think, maybe its just the simple idea of us making it very, very clear that we want them. Reporter so at werner, swift, covenant, and snider, they offer financial incentives, carving out shorter trips to cater to family life, and they encourage team driving so couples hit the road together, even in some cases modifying specks to make trucks easier to drive. Thats something a rider system took to another level this year by rolling out customized trucks that it is offering to its shipping clientele. Theres even a girl scout patch now which the women in Trucking Association recently created to educate young women about potential careers in transportation. Well be talking about this throughout the day, but that gives you a glimpse on how this world of trucking is changing. Guys, back over to you. They are pros. Im always, whenever theres a truck in the left lane that i need to pass, they wont get over going 55, whenever i get up to them, its a represented truck, like a rider. Its not a professional. Those guys know exactly pass, get in the right lane, get out of the way, and people want to pass. I mean, i respect them. You know, they are big old things they are handling, and surprise theres not more issues, but think you get good at it. Thank you, morgan, and glad you reconsidered and are sticking with tv. Anyway, thank you. Coming up, a read on Holiday Retail from the executive chairman of estee, and well talk with the ceo, and look at u. S. Equity futures from the losing streak yesterday, but were a loser off the open this morning. Dow would open lower by 160 at this hour, and s p would open down 18 points, and nasdaq opens lower by 35. Welcome back to squawk box. In the headlines, the deal of the morning, dupontmerging in ak deal, combined 130 called dow dupont, just take out all the spaces. You see dow shares under pressure there dupont slightly down, dow slightly higher. Dont miss the interview with the leaders of the two companies on squawk on the street today at 9 15 eastern time. Crude holding at seven year lows, and this morning, the International Energy agency says it sees the oil glut worsening. The reason . Demand growth is slowing. Output booms, they see the Global Markets oversupplied until the end of 2016. More americans cut the cord. 21 of households do not pay for traditional tv by 2018, up from 17 by the end of this year. An asset eliminating a Junk Bond Fund that bet big on ill liquid assets. The firm is blocking investors from withdrawing money as they try to complete this. Its called the biggest failure in the Mutual Fund Industry since the primary fund broke the buck in the crisis. Joe . American, delta, and united announcing they will no longer allow hover boards on the planes due to safety concerns. Delta says it found that the strength of the batteries in the hover board exceeded government limits for whats allowed on an aircraft, but the manufacturers dont consistently label the size or power of the batteries. Jet blue, alaska airlines, and virgin air banned the devices. Southwest is allowing them for now, but evaluating the policy. Coming up, well talk to an executive on the manufacturer of the hover boards. Lithium batteries and planes do not mix. Worst was the everglades deal which i think they figured might have been in the i think its called air tran . Used to be oh, oh, yeah. Yeah. They thought they were transporting some of those in the hold, and one of them might have i think it was may have been this. Reacted quick to that video. Two weeks until christmas now. Hard to believe. Here now from the front lines of the retail to talk about the Holiday Shopping season, william lauder. Good morning to you. Good morning. Questions on the Holiday Season, we are not getting the traditional clumping, necessarily of people showing up in the stores. A lot of online photos of empty malls and that thing and Department Stores struggling. What do you think is going on . Department store and mall specific or something larger . You know, i think theres a couple things going on. Fist of all, the numbers are, perhaps, not as bad as photos say because if its taken at 8 00 in the morning, they are empty for a reason, look at saturday at noon, its bigger, and weather is a factor. It could be 60 degrees in the northeast, that has a different effect on the holiday spirit, if you will, but the fact of the matter is there is substantial shopping, Online Shopping for sure is growing dramatically as well as were seeing the retail is not that bad, and it depends where you are in the world. Lets, you know, north americas a piece of it, but for us, its 30 of the business, and 70 is outside america. You see demand in the u. K. Europe with the exception paris is good to very good, and asias pretty good. Dont forget its very much an angloeuropean trend christmas shopping. Shopping is. Right. And cosmetic, those related products have done well for the traditional merchants, you guys, obviously, throughout the period, an ulta beauty salon, those are places people are spending money, but overtime, and you have a product here selling like hot cakes directly to consumers on line, are you going to deemphasize the Department Store channel . Is that just less important to you guys than ten to 20 years ago . Well, i think its more of a rebalancing of the business, so if we were to go back prior to 1995, before al gore invented the internet, you would see that we did 98. 9 of the business through Department Stores or other traditional retailers like that. Today were doing a substantial portion of the business online, meaning its about 1012 of the business, and theres a shift. We are focusing on bringing brands to where Consumers Want to shop. Can bring it online, through our own retail, and what were trying to do is be a part of what the future of retail is going to be. Future of retail is not necessarily a lot of Big Box Stores stuffed to the nose with merchandise. Its going to be back to think of the old sears showrooming where central warehouses held inventory, and they said, i liked it to shop, okay, fine, ill have it. Deliver later on today or tomorrow. I dont think he actually invented the internet. I know. I was making that up. I give him credit for climate change. He invented climate change. He affected the weather, made it warmer. And seas, and thinking about amazon, and thats back to the future of the catalog, right . Heres every product, what do you want . Correct. Amazon has not created an amazon where theres a showroom short where they can sell the best in stock, buy it now, and have some form of tablet technology, i guess, the amazon fire, wherever, order what you want, amazon has it, push the button and delivered by this time. Its not a bad idea. What about china, and what about the Growth Market for businesses, what are you seeing there. China is not as robust as it was, but it is good. We are still getting nice growth numbers. Those are the kinds of numbers where, in most other developed markets in the world, we would be saying its fantastic. But because china used to be so good, meaningfully high strong double digits, and now theres meaningfully good strong Single Digits. Thats still very good. The masks are doing well. For example, they are doing well in asia. Women and men in particular, but north america too. One of the favorite products is this, joe. You know im not going to say what i said because that could ruin it. I said, you know what, lamer. I have Andrews Christmas present. I was thinking how much does it cost . This product probably a couple hundred dollars. This is 250. You dont have a lamer mist . Lame is the best. Now you to change it. Im not buying lamer. Its good. Very french. Oh, i heard a wonderful quote the other day, which i really appreciate, and someone asked about a high priced product like this, and the answer was, you forget about you remember quality long after you forgot about the price. I have to smell this. Put it on. Is it a perfume . Nobody knows what to do with it. Its a special serum. Give me the back of my hand. Ill give you the back of my hand. [ laughter ] just rub it in, and it is a special serum for your skin. You know what, i have old man hands now. You will have less old man hands. Yes. Really . I try products all the time. This smooths your skin, makes it supple, and refreshes cells in the skip so that gets rid of wrinkles and jowls . Helps you in all those areas. Fda watching or something . We always have to be careful, but it will help. This is looks make joe try that. Mariah carrey lipstick. Selling like hot cakes. Online is hot, hot, hot right now. Were seeing were going on 1214 plus years of strong double digit growth in on line. And were seeing number over 40 . Thank you so much for joining us this morning. Thank you. Thats a good smell. It does smell good. Yeah. Smell it. Yeah, thats nice. Oh, you know, i should have done that. Ill never learn. Yeah. Coming up, a message for Silicon Valley, its ur gent, and the Tech Companies provide access to encrypted information to Law Enforcement officials to prevent domestic terrorist attacks. The senator joining us from the campaign trail next. Ideas are scary. They come into this 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. When youre not confident your companys data is secure, the possibility of a breach 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. Welcome back to squawk box, and after some pressure across equities in europe and asia overnight, look at u. S. Futures pointed down for the dow. They continue to drift higher lower throughout the morning. The dow implied to open lower by 182 points. S p gave up 20, and nasdaq 43 or so. If you wonder whats going on, it might have to do with this. The Energy Sector, wti crude down 50 cents to 36 a barrel and change. Better than 1 decline, and brent crude below 40, almost below 39 this morning, and natural gas below 2. They hope to divert from the natural gas, a big hit for the energy space again. Senator graham and mccain call for u. S. Involvement in the middle east suggesting Ground Troops are the only way to defeat isis. Senator graham gone as far to say he believes if we dont ask now, theres going to be another 9 11 on u. S. Soil. President ial candidate and South Carolina senator graham joining us this morning. Senator, good to see you. Its not been a month yet since paris, and weve also had San Bernardino, and just chronological chronologically, i realize all your tough talk prior to that, you were already saying its probably similar things to what youre saying now, even though these two events have now sort of proven you right. Well, i dont want to be right as much as i want to protect the country. I know. Two years ago, i put forth a proposal that we got to destroy them before they get stronger, and if i could find a way to do with without american ground forces, i would. I know the sacrifice required. We need to go up to 10,000 to expedite the demise of isil inside of iraq, stiffen the spine of iraqi army, giving them the capability they do not have. Theres no good choices left. They would go in if we go in with them, and thats going to require a hundred thousand troops. With our leadership, they would do this. 10,000 u. S. Western, and the rest come from the region to destroy them. Do we hear people that are opposed to it in the administration . They use a lot of false narratives or false choices, i hear it all the time, you know, either we put a hundred thousand americans on the ground or we do what were doing, and thats all we do, thats the only two choices. The other day i saw someone, a great hero vets talking about its eventually, could end up being our guys that have to dig us out of this mess, and by the time we finally do it, the longer you wait, the more of our guys end up, you know, getting hurt or killed. You know, we think were sparing us another situation, but maybe we could, maybe by not acting two years ago with our guys, maybe more of our guys guys and gals end up being affected this time around. Absolutely right. You know, john mccain and myself were arguing along with the military to keep a residual force of 10,000 in iraq. The serge worked, and in 2010, iraq was in a secure spot, security improved, and political progress was made. A residual force would have prevented al qaeda and iraq from becoming isil. Three years ago, asod was on the ropes, the country turned against him, and the syria army in tact, no fly zone, the Free Syria Army would have taken assad down, and the Security Team advised him to do that, but obama refused to listen to sound military advice in iraq, took a pass on assad on the ropes, and the rest is history. If the war goes on another year, its going to go into lebanon and jordan. This veteran was right. The longer you wait, the worse it gets. Senator, the numbers are not even close to plurality or majority for trumps proposals about temporarily not allowing muslims to enter the country. One of the reasons is resinates with is the youve heard what if people from this country or people from, you know, dont base on religion, but some way take a pause and step back so that people that you know, the picture of that couple coming in through customs is fresh in everyones mind. Is there a way to do it more constitutional or palate able to more people . Ive been iraq and afghanistan 36 times. I went for my 36th trip a week ago. Donald trump has done absolutely the worst possible thing to do as an american political leader, and thats declare war on the fate itself. My plan is to get people within the faith, the arab governments, turkey muslims who reject isil to rally, create an army where they are 90 of the forces going on the ground with them to destroy a common enemy. Donald trump abandoning all muslims or suggesting to do that makes it very difficult to have partnerships with people in the faith who overwhelmingly reject the ideology. Hes done the one thing that helps isil and hurts us. What would i do . Id have a timeout on syria refugees until we have aprocess. Im the first person to suggest this couple may have pep traited our defenses by having an arranged marriage from a terrorist group organization. Im very aware of the holes in our system, nsa Program Going down, but the one thing you dont want to do is declare war on faith because it is a religious war between radical islamists and 90 of the rest of the faith. I intend to join with people in the faith. Senator, on that note, the journal, for example, called for total informational awareness. The thing to do is not just color the faith with a broad brush, but make sure you follow connections to actual terrorism activity. Exactly. On that point, do you think Silicon Valleys products and services undermine National Security . Yes. The fbi director said it was not a technical problem to be able to crack into communications. It was a Business Model problem. Heres my advice to our friends in Silicon Valley. If you cant find an agreement with the fbi director soon as to how we, the government, with a court order can find out whats going on with terrorist communications, congress will do this for you. I would prefer the private sector working with the fbi cotom up with a system that allows us to be safe and protect privacy. The most chilling testimony from the fbi director was 109 messages were sent by a shooter in texas to a known terrorist, and he still has not seen the communications because he cant get into them. All i suggest, if you have a court order where theres a terrorist on one end of the communication and somebody inside the country on the other that we have a system that allows the fbi with a court order to look at the communications, and if Silicon Valley is standing in the way of that, they have to get out of the way. Senator, is there anything that you think mr. Trump could say that would hurt him in the polls . Seems like no matter what he says, his numbers continue to get better. Not with some people. If you poll theres a new poll out there morning, forgive me for interrupting, but theres a poll, four in ten republican primary voters are for mr. Trump. Numbers continue to get stronger almost day after day after day. Yeah. Theres nothing really mysterious about this. Quite frankly, hes convinced people hes strong when actually hes weak. If he knew anything about the war at all, the last thing youd do is Say Something that would hurt us and ability to put together a coalition. How do you go to saudi arabia and e egypt and put together a partnership theyre willing to enter into when the loudest voice in america declared war on your faith . Its an ill conceived idea. Americans believe what he says makes them safe. I dont. Senator, the wall street sorry, the gop establishment and pundits, everyones been wrong on trump up to this point. Right. Who knows what timely happens, and, you know, they are considering broker convention, all this stuff, but a lot of them say, look, you add up everybody elses numbers, and its above mr. Trumps numbers, and thats whats going to happen, but until people drop out, thats not going to happen. What would cause you to finally say im going to give whatever it is, throw it over to a single candidate that people want, is that after iowa . After New Hampshire . When do you decide im finished here and im going to go for the greater good, try it add my numbers to somebody else . Right. Well, if i dont do well in New Hampshire, if i cant do well outside my state, New Hampshire will be the place to breakthrough, ill reevaluate for reasons you said. One of the reasons i ran for president above all else is drive the National Security debate overdue, and ive been successful in that regard. And here we are today talking about it with you. We appreciate the time. Thank you. Coming up, greg phlegming, president of morgagan stanley Wealth Management talking about the path to rate liftoff and beyond. Coming up, the ceo in an exclusive interview to talk about chinas spinoff division and fast food industry. Dont miss it. 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. Yums new menu for success, laying out plans for the china spinoff, Ratings Agency s p is not buying what the company is selling, cutting its bonds all the way to junk in response to the companys buy back plans, and the ceo is here to walk us through the plan in an exclusive interview. Stocking under pressure following oil prices and the meeting weighing on investors, and Wealth Management is here to share a view and look ahead to 2016. Plus, hottest gift of the season, the hoverboardith a brad rep thanks to knockoffs and safety concerns. Well ride around the studio and see if you should put one under the tree for christmas as the final hour of squawk box rolls on. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe with scott and kelly and also a guest host, Morgan Stanley Wealth Management president Greg Flemming, an old friend of the show, faber is here, my high five buddy. We used to work with phil mccuddy who is your buddy. Yes. Remember that. Anyway, a lot to discussion including oils impact, the fields timeline for rate increases, and you have a 2016 wish list. I do personally. Yeah. We all have wish lists . Know actually formally written down wish lists, but im sure we have certain ones, a lot in common, maybe some different. First, lets check out the futures and, you know what im talking about. Theres the futures, yikes. This is really oil again, kelly . Seriously . Thats oil . Im not saying its anything. Just look at it. Down 200 points. Oil about to reach 2009 lows. Thats good. Good for some people, but tough for other, and every day people say how much they love the energy trade. Yeah. Thats true. This week will not go down in history as a great week. In fact, as weve said, worst one in a month. The yield on the ten year note right now, which is thats truly remember greenspan said i would rather see that than the other things . Well, thats been like watching somebody paint grass. Its 2. 19 . Weve been waiting five years. Theres europe which may be inspiring weakness we have here. Those are ugly red numbers there. Breaking news this morning. It is official, due popt and dow combine in a merger of equals. Andrew liveris was that him . Fa br fabers phone is ringing. Ed breen will be ceo of the company, and david is joining us now with more. Breen used to be a buddy of ours from well, he took over at tyco, took them apart. Try to call him. Weve tried. Hes going to be joining us at 9 00. Oh, good. Both of them. Walk overover. They are nearby in midtown. Not one, but two for friday. Thats big. A deal weve waited for for a couple days, and the market already adjusted to it. It was wednesday they were up sharply, 10 at least. Yeah. Added 14 billion in market values for the one day. Yesterday, pulled back, and well watch today. They are down, dupont down more than that. 1. 28 shares fixed Exchange Ratio for one share calling it dowdupont, so for each share, you get one share, and dow received 1. 82. Half Million Dollars just to come up with the name, you think . Some Advertising Firm . Highly paid advisers. We think dow dupont. Going through it. Theyve gone through a lot in the last eight weeks in particular, joe, and people who have been involved in putting the deal together are going through all the areas, deciding even things along the line of key leadership names that cannot be fired, if you will, because, of course, an emerging of equals, decisions about who runs what, and as in terms of who is running what business specifically as we told you, three companies emerge from this huge conglomeration, if you will, and they will keep them separate, albeit under the dowdupont umbrella with agriculture, Specialty Products, chemical materials, and the more km commodity businesses, the slower of the three is materials. They do the cracking, creating et lean and things of that nature. Its a liveris company. Under Specialty Products . Specialty products split between the two of the board. Got it. Breen will be ag, liveris is specifically overseeing materials. So, you know, well see. 1824 months after closing the deal, they have the spinoff of the three enormous companies in their own right, larger than monsanto, you could theres a lot of consolidation going on. A lot of consolidation and interesting, you know, side stories too talk about here, david, that i know you have an interest in too. Im hearing that trian is supportive of the deal because of the angle on both sides. And they lost a approximaty fight, been active as far as we know behind the scenes saying from the getgo they were not going away by any stretch. Scott, they were involved by this. Signing the agreement, they were involved, and so had not been speaking, but have been involved in helping the structure of the deal. Youre right. They were intermittenly involved, shepherding to a certain extent, being there, saying, keep it going, guys. Exactly. They are for it. I wonder what their point thinks, and theres a standstill agreement that expires monday with dow, so here we have an announcement of a deal on friday, and on monday, you are going to get the likely comment or well find out what third point and dan loeb think of the transaction after a year, what they think of mr. Liveris as executive chairman and running a business broken into three. Its something to look forward to. It is. Theres certainly got to have been a little prod. As weve reported and others have as well, scott, i mean, liveris had been revisiting the idea of this transaction for many years, and had considered splitting the company and doing any number of things, approached breens predecessor for a potential deal, and knowing that standstill expires, certainly, im sure, i know was also something at least in the back of their minds. Was it the main motivating portion . No way. It had to be in the back of their minds to try to get this thing done now knowing the standstill was coming monday. Looking forward to the interview. 9 15. Is that when it is . Absolutely right. Thats accurate. We like people to tune in at 9 00. Nay will. They want to hear the commentary of you talk about the deal, leading up to the interview. Thats how it works. Got it, exactly. 9 00 a. M. Squawk on the street. Another story, third avenue management liquidating a fund betting big on illliquid assets. Investors blocked from withdrawing money, the biggest failure since the primary reserve fund broke the buck in the Financial Aid crisis. To avoid a Government Shutdown, the senate agreed to a voice vote to extend the deadline through next wednesday. The house is expected to follow suit today. In a prom innocent chinese tycoon is missing. Reports say the billionaire has been out of contact since midday thursday, and that he was last seen with police at an airport in shanghai. China in the middle of a sweeping anticorruption crackdown. The businessmans disappearance raises speculation today. This morning, crude prices remain at levels not seen since early 2009, just in the middle, basically, of the financial crisis. This as output in the middle east continues to rise despite an already huge global glut. Wti hit 36 yesterday, the lowest mark since february 2009. The price route is result of a huge overhang in production fast filling storage sites which some Analysts Expect to run out in the early part of next year. Again, were talking about crude, crude everywhere, and crude prices, crude oil down to 36. 27 this morning. South Lake Union Chipotle closed this morning. The store received red violations on three consecutive visits from health officials. They closed 43 chains in washington and oregon amid an e. Coli outbreak that sickened people as far as back as last summer. 140 people were sickened by neuroviruses in a boston location. Shares of chipotle this morning down 1. 5 . This news, joe, coming after the ceo went on today with matt lauer yesterday. The shares got a lift yesterday in the session after that interview. Yep. Here we are talking about another health violation, and not that interview. Right. For me, if there was one supplier across the country, and it was e. Coli suddenly its neurovirus. Doesnt that make you wonder whats happening in terms of Quality Control . This is when a ceo wonder why nay are paid a lot, managing through this is difficult. Well see how it works. Annual investor meeting, yum brands, owner of kfc and taco bell plan to spin off the business and return 6 billion to shareholders, and by the time the merger is complete, in response to the announcement, s p lowered its ratings of yum brands. Three levels at once all the way to junk warning the dividend and Share Buyback requires the company taking on higher debt. Shares of yum brands now down over 20 in the last six months. Joining us now for the exclusive, greg creed, ceo of young brands. Good to see you this morning, thank you. My pleasure, good morning, everybody. You didnt have this same situation, obviously, you were not ceo at the time, but, you know, i guess china with kfc, i mean, it is a mine field trying to run a global chain of restaurants because you got so many moving parts. What do you think of the job i understand that, but how do you respond to Something Like this . Well, i love my job and the fact that yesterday we got a chance to talk to investors and analysts about creating two powerful independent focus growth companies. Couldnt be more excited about the future whether its china or other countries we operate in around the world. One thing, if you dont want to talk about chipotle or Quality Control issues, we can just move on, but the buyback, causing a downgrade by s p. We talk about buybacks here all the time, and some people think with multiples where they are, that may not be the best use of cash. Especially if youre borrowing it. Why do you think this makes sense . Well, were going to become a global franchise or with a huge cash flow, and we did a lot of analys analysis, obviously, and we believe we can leverage up, the high point of the highly focussed global franchise companies, and, yes, we spoke to the ratings agencies. It was not a surprise to us. We think we have an incredibly strong story to the shareholders returning to the capital, and we can cover Interest Rate over four times, and we feel good about the financial position of the company today, and were going to feel better Going Forward when we are a pure franchise play. Greg, what about underlying economy in the u. S. Through your businesses . Clearly, theres a lot of positive momentum. Are you seeing that in sales . How are you looking at 2016 and beyond . Yeah. Interesting you talked earlier about oil prices. Low gas prices has a positive impact on the industry, and i cant report the numbers, but across the board, theres a lot of transaction growth in the Fourth Quarter and excited when i see sales growth driven by transaction growth. Thats a good sign for yum and the economy. It is very i mean, china, at this point, can you see that its hon a scale of one to ten, how fixed is the situation there . Well, weve got a new Leadership Team in china. Bringing fresh perspectives and new ideas. I definitely believe were improving, and every kwaurtd there quarter theres signs of improvement and excited about the Growth Potential in china. Think about it, you know, in ten years, we have products in china grow 300 million to 600 million people, and, you know, were still going to deliver in the Fourth Quarter possibly same store sales growth. I think we are making positive momentum. Mr. Creed, weve, on this program, oftentimes, you know, debated, argued over, maybe at times given too much credit to the role that activists investors play in certain situations. Your company has one involved. You have one on the board now. Im wondering, the kind of decision you make to buy back the stock knowing that it could hurt the credit rating, are you in any way doing things to appease activists investors that you otherwise wouldnt do if they were not involved . Is that a fair question to be asked, i think . Its a fair question to ask, but i want to assure you the decision made to separate the two companies and decision to lever up the Balance Sheet was a decision we had made actually prior to keith coming on the board. Now, what was exciting for us when they, you know, came forward with their ideas. It demonstrated to us we were on commonground. We got to that position. It was actually really nice to see that they sort of got to the same place, and i have to say that, you know, we got a full board, all the Board Members make a large contribution to the success of yum, and very excited to be working with keith and, obviously, keith and the whole board have been, you know, supporters of the division to separate into two Global Growth companies. I understand that you are going to take on dominos in a bigger way in 2016 . I think the potential for pizza hut is huge. You know, we are the most loved and trusted brand and biggest brand in the united states. Biggest brand globally, but, obviously, you know, not as competitive as we need to be in the past. This is not going to be an easy challenge, but confident in the leadership of the pizza hut team, and i believe we can be much more competitive in the pizza category Going Forward. Okay. Thanks for coming on today, greg. Greg creed, fairly new ceo of yum. Thank you. Coming up, weighing risksing and rewards of the fed hike, and well ask what he thinks about the deal of the day. Dow chemical and dupont made it official. More on the plans to combine the companies in an allstock deal. Squawk box is back after the quick break. They come into this 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 focus is fully on fed next week, but the guest says we have to focus on the policy path. Greg fleming our guest host, president of Morgan Stanley Wealth Management with 2 trillion under asset in management. Its about the fed, look past what happens next wednesday and focus on pace and pat . Thats fair. Next wednesday is by and large done in peoples minds and looks like they are finally going to go forward. One thing i would say, scott, looking back over the last 1218 months is they have been tightening in the sense they pulled out of qe. Theres already been that taking place from a monetary stand appointment. This is as well telegraphed as any rate rise in our lifetime and decades from here. I think the market is expecting it, but the market reaction, which somebody asks, whats the near term market reaction, hard to predict, but the market is looking closely at the language in the statement and the signaling around next year, how much, how fast, how frequently everything along those lines. Any chance of a surprise next week in that they, in fact, dont go . Very, very lift. I dont think theres much surprise in any direction. I think theyll go. I think they are cautious with the language. Theyll be clear that they are going to move it in a methodical pace. I think that they have telegraphed it and telegraphed it and really on message. Let me ask you about i love your comment on the stories of the morning, and that the third avenue barring withdraws as it liquidates. Is that a concerning sign to you . Barring the specific fund, equity market and credit markets are going through a difficult time. Yield markets with a difficult time, and we take a close look at that. One thing i say whether its equity market or high yield or credit markets, you have to back up and talk about how is the larger economy doing . Ultimately, in the near term, things move for reasons, but over time, its going to be about how is the economy doing, and were upbeat on the u. S. Economy. Does that sound like a red flag moment to you . It depends, scott, its a fair appointment, depends where we go from here on an economic stand appointment. You know, the u. S. Economy could be accelerating in the Fourth Quarter. When we look into 2016, and i said this before, sentiment is such an important part of this that we lived through so many cycles now, weve been in cycles where people are reluctant to let go of a positive view on the world. That would be the late 90s, 2006 before the credit crisis began. Here, the credit crisis had such a huge impact on human psyche, theres reluctance to grab on that the u. S. Economy is doing very well, and unemployment rate, this is already one of the longest expansions in the history of the u. S. Economy. Yes. That makes it interesting. Just quick before we go, journal says third avenue is the first fund to halt redemptions without obtaining an sec order. Can you reassure people youd never do Something Like that . I think the facts of that case look like they might be specific to whats going on there, but to scotts point, you stand back, say is this going to be the signaling moment is the bigger issue there. Yeah. Its not al all clear to me its a moment that people look back and say its a big event, particularly if the u. S. Economy plays out the way we expect it to play out. Is that the same statement you made if i said, are you concerned about whats happening in high yield in general . High yield in general, there is a concern because the market has had a challenging time, and credit markets are relative to whats going on in the underlying economy. The question is, where does it go from here . Were upbeat. Coming up, a southerbys auction report driven by janis joplin. Every insurance policy has a number. But not every Insurance Company understands the life behind it. For those whove served and the families whove supported them, we offer our best service in return. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. When we return, ppi data for november, and a look at u. S. Equity futures, opening lower 165 points. I am the future. I provide for my family. I will use my education to help my community. I will inspire our next generation of leaders. I am a college student, but i am only 1 . Only 1 of College Students are american indian. Donate now, and help our numbers grow. Stocks on the move, beating the street, among the drivers, Strong Subscriber growth for the Creative Cloud space software. Wow. Need to think about that for a while. You do . You have any idea what it is for adobe . Now rather than downloading the software, you just subscribe. There you go. United technologies raising the full year earnings forecast, and a Restructuring Plan aimed at cutting costs. Easy just to say cloud. And sounds cool. Secs from retail sales for november. Rick santelli is standing by. The survey says for november retail sales headline up. 20, a whisker shy of what was expected. Up. 4 leaving out autos. Exautos and gas goes up,. 50, half of 1 , and whats known as the control group, what is taken and put it into other calculations like gdp up. 6. Headlines weakness, but as you get into the details, it improves. All Things Considered is a good number. Only a real subtle revision to october in the form of exautos, originally released. 20 up now. 10. Ppi up. 3, and strip out food and energy, also up. 3. Higher than anticipated. We looked for unchanged on both, so the markets going to have to grapple with two issues that historically would represent higher yields. Rising prices and better activity with regard to the economy. Lets see if it holds true here. Going into the data point, were hovering under 220. We are at 220. Equities improved, but still negative, and indexes around the world are negative. Look at the dax. We continue to digest the great recalibration, others call it a great divergence because of the central bank against the rest of the world in direction of stimulus and liquidity, and that, mostly, is driving the small pieces when added together to give us a macro view that if you dont believe it, think emerging markets. Back to you. Rick, thank you. For more on the numbers, Steve Leisman is joining us. Our guest host as well, greg fleming. Thats right. The headline number is the weak part, but the other parts are stronger, the parts that feed into gdp a stronger. I do not understand the governments numbers on cars. I never understood them. They have them bawling. Ill find it in a second here. Include used cars . No . Includes used cars, but it makes no sense. We have autos falling. 60 . My apologies to the entire used and preowned car industry. They are falling at. 60 and furniture down with strength in grocery stores. Bottom line quickly, theres the story of the journal this morning that makes no sense to me about Consumer Spending not being strong. Whats happening is that the prices are falling. When you correct for inflation and the decline in inflation, which is beyond gasoline prices, its inside the retail sales number. You saw it yesterday in the nonenergy import numbers that came in. They are also declining. Take a look at that gap, the orange line is inflation adjusted numbers. The white line is nominal, and then zoom in, whats happening, the bigger gap weve had since recession, theres strong Consumer Spending adjusting for inflation. Of course, retailers numbers, their profit numbers are not adjusted, but their inputs are correlated with the cost or declining costs of the outputs. I dont get the story in the journal this morning. Its not accurate to say consumer is weak. Lets bring in our guest to elaborate on that, reaction, and fed meeting. A former Federal Reserve governor, welcome. Greg fleming it here from Morgan Stanley Wealth Management. Greg . I want to agree with steve that numbers are positive, should be, and Consumer Spending is going in the right direction given the fact we have real wage growth at a significant level for the first time in a while. Our ahead of our Global Investment committee, mike wilson talked about the fact real wages are in the top vessel of gain over the last 35 years. Wow. Filtering through. I agree with steve. I think the numbers are positive. What do you think, larry . This was an excellent report. Now, i do believe that Consumer Spending was slowing in the 40 quarter, you know, two and a half, not bad. Right. The driver of the economy. It was taking down private domestic demand. This is a freight report really. It gives comfort to me as a forecaster and to the fomc which was going on in any case. This is a really good report. Larry, you had three in the third, and you are slower at 2. 5 , but its not weak by any stretch of the imagination. The journals story siays its uneven, which is true. Consumers spend money on cars, vehicles, and around the homes, not apparel. Youre getting it in services. The apparel thing was seasonal, right . Theres a problem hate to say this problem with warm weather, likely to be fishing this weekend, very excited about that. I approach the weather problem with ambiguity myself, but i dont think, when you have the strong auto numbers, and you have the other strong numbers out this, its hard to have the headline like they had this morning about the gasoline prices not showing up in consumers. Larry i would just say we were not worried about Consumer Spending in the Fourth Quarter because fundamentals are positive, so, yeah, we think Consumer Spending will be above 3 . Why when the reports hit, go back and look at the ten year, which, by the way, given that were gout about to approach the fed rate hike, not breaking out lately, and dipping below in reaction to the reports, it was ppi, and now its right back at that flat line growth. What do you think of that . Well, this is something the fed look the at closely. Raidsing rates consistently in 202016, if the curve flattens, they will move more slowly. They dont want to see that because that indicates growth is coming down. I think, again, to larrys point and what were talking about here with steve, the underlying consumer is accelerating from a momentum standpoint into 2016, driven by wage growth, Consumer Spending is healthy, and it is maybe what scott said, certain sectors not as robust as others, but the overall picture is positive, and i think the market reacts to that over time. Larry, we need a deja vu situation all over again like 2004 and 2005 where the fed tried to move the long end of the curve and incapable of doing it and it ignored the fed that fundamentally it sees policy mace ticks coming or doesnt see inflation generated by fed policy . Well, i would see it differently. I think it is a real possibility. Remember, that was a situation in which there were developments going on abroad which came to the u. S. This is similar here in terms of global divergence that we talked about, and that means capital flows into the u. S. , and it leads to an appreciation of the dollar, but purchases of u. S. Financial assets put pressure on long teerm rates. This is something to really watch. Larry, not long ago, i spoke with greenspan who said, hes not sure actually con numb drum is the right word to use, but it should make sense that as the fed begins raising, you put the bre brakes on the economy so the long end should fall. I dont agree. Could be living through something that makes sense in that regard. Well, i dont think so. In terms of the fundamentals, market believes the pace the fed moves at is glacial. The fomc believes it will be historically slow, faster than the markets, and if markets converge to what the fed anticipat anticipates, theres long rates going up more than the otherwise they would in a tightening cycle like this. Not a big jump, but thats the likely outcome than rates not moving at all. I think larrys right on what he said. I think the when the market starts getting closer to where the feds actually going to go, and you start to see some forecasters saying, you know, maybe its not just three rate rises in 2016 so when the market goes where larry talks about, long end of the curve reacts. One thing, larry, which is that im pretty sure at the Federal Reserve, they are going to be happy if they can just raise the fed funds rate. They are so concerned about all the extra money sloshing around, and one of the days, we have to get technical, sorry, joe, on the show about reverse rates and all the other stuff, interest on excess reserves that they have to do to raise the rates just ta 2550 because of the extra range, they will be happy to just hit the range. Why are stocks selling off as we have a good economic report here . This is often a knee jerk reaction. If the markets believe that its more likely that the fed is going to raise rates, and i dont know if its a given deal, changing expectations for december, but you often see the equity market go down when it should be going up. Down all morning. Been down all morning. Down all morning, but after the numbers came out, its down by another 30 points on the dow. In the early stages of a tight in the early stages of tightening cycle, its good for equities, it pulls up rates. Its going to be slowing growth that it turns around. Got to leave it there, gentlemen. Larry, thank you for joining us in morning. Pleasure. With our steve, and greg sticks around. Quick thought on the market . We have to wait and see because its going to be weeks and mornths to see how the markt digests. I agree with larry, in the near term, hard to say one day or one week really reflects what is going to happen from a market stand point or reaction to the fed. Okay. Ford motors plans to invest by 2020 in programs to broad offerings of hybrids and electric vehicles, and the ceo announced the auto maker is launching a new version of the focused electric car with a 100 mile range and recharges, and theres vintage cars last night, and Janis Joplins porsche, and c brought in more than the top estimate. Wow. It was white when she purchased it, and used at the rock n roll hall of fame in cleveland for two decades, and another sale, 56 ferrari stelling for 28 million. Wow. When we return, the hoverboard is the hottest gift this Holiday Season, but buyers beware, safety concerns and knockoffs abound. We roll into the keep squawking segment. Futures at this hour, red picture on the street. At least in implied open thus far. 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, three Biggest Airlines in the u. S. Banned hoverboards. American, delta, united all announcing they no longer allow devices on the planes due to safety concerns. Delta found the strength of the batteries in the boards exceed government limits for whats allowed on an aircraft. The batteries often are not labeled. Virgin and jet blue banned devices, southwest allowing them for now, but evaluating their policies. Scott . Todays keep squawking segment, while the scooter does not hover, its a hot holiday gift, and ebay sold one every 12 seconds on cyber monday, but some are slowing their role. There are dozens of hoverboard related injuries in the country, and plus reports of it explo exploding. Look at that there, burst into claims. Commission launched a high priority to analyze which hoverboards are safe and which are not. Earlier, we asked you if a hoverboard was on your wish list despite the dangerous factors. Frank tweets, no, he says hell only by one if hes planning a barbecue and wants a quick fire. Ouch. Here to take us on a test ride is jolene, chief marketing officer at inventist. When you see the videos, you hear a twitter say Something Like that, what do you think . You know, its really disappointing for us to hear that because we spent two years in research and development with the manufacturer of the original patented hover tracks, and a lot reports stem from the illegal copy products that are, in fact, you know, not based and dont have the same quality parts and pieces this our product has. Can you 100 guarantee the safety of the product . We offer a one Year Warranty with a high quality sony battery thats been in other products, and weve been selling them with zero incidences for threeplus years. Have any one of your hover track items have a problem . No. Not even one . Not one. With a fire or anything . Not one. We source ourselves high quality parts and pieces where the illegal copiers are not doing that, but substituting poor quality parts and pieces, and thats why we run into these issues. Yours are more expensive, anywhere from 599 to sa 1500. How do you think the models offered for a couple hundred dollars, whats in them . Whats going ton . Great question. We want to talk about that. You know, the battery and the motor that is inside the hover tracks that we have, its a thousand watt moe e ttor so the product can stabilize you and provide support, key for safety. In addition, rather than a noname battery with unknown watt hour safety, ours has 96 watt hours which is exactly under whats allowed on airplanes to be safe. D you can travel on an airplane with your device . Correct. Who is buying this . Millennials buying them . Seems like its really ramping up for you. . Right. Who are the buyers . Its everybody. Were just as amazed as everybody else as how popular its been. Everything from children all the way up we recommend 13 and plus, but people buy it for their kids. We see big kids riding them, adults, 35, 40. Is it american, u. S. , or around the world . The middle east is a big hot area for this product, the u. K. Is it possible to overcharge these devices, overcharge the battery . With low quality illegal products it is possible. With yours. Its not. Doesnt matter how long you charge it . Doesnt come with a recommendation, charge for x amount of hours . Well, we recommend same with the laptops, they recommend for optimum battery, you unplug it after you charge it for an hour and a half, but ours is not going to blow up if you leave it plugged in as with this happening with other ones. Indoors, outdoors, does it matter . Recommend staying on smooth surfaces, indoors or outdoors, as long as its smooth, you are good to ride. How fast can it go . Whats the maximum speed . Well, it could go as fast as you want to go, but we govern it at 5 Miles Per Hour. How fast do you want to go . 100 Miles Per Hour . Thank you so much. Thank you. When we return here on squawk box, jim cramer from the new york stock exchange. Futures now, pressure across the board. Well be right back. 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. Walmart says its chief Marketing Executive will be leaving. The move comes as walmart aims to appeal to higher income shoppers. Shares of walmart down nearly 30 over a oneyear period down a third of a percent at this hour. Pressure on markets across the board here. Lets get down to the new york stock exchange. Jim cramer joins us now. What do you make of whats happening this morning . I have to tell you the truth. Ever since we had that employment number i said we have to be careful because employment number was too high. I listened to your guest. Theres this whole dichotomy of three and done. All that matters is its going in the wrong direction. Economy, surface numbers on employment are too hot and Everything Else is too cold. The watershed was the 90 billion Energy Company that had to cut the dividend. It says smartest people are dead wrong on oil. When i saw oil drop down and futures were up at 4 30 and down big, that drives it. Doesnt matter what individual companies do right now. People have to recognize that oil going down is going to take this market down. If they havent taken some profits going in as i said on the show, youre going to get hurt. This is readjustment into the new regime and its not as good for stocks as it used to be. Jim, when you factor in the positive impact of oil prices on the consumer and some of the numbers we were just looking at with larry and steve, how do you feel as we get into 2016 if the economy really does accelerate, what about the impact of that potentially on the market over the next 6 or 12 months . I wish i could see where its helping. Many of the Consumer Product companies are reluctant to talk about possible gains. Corporations got the best sense of how people are spending. Theyre not spending that much. Theyre trying to save at a very low rate because of Interest Rates. Theres a couple restaurants that told me that Consumer Spending is up. Not a single retailer told me that consumer is up. Whether it be walmart or restoration harbor last night. Its promotional environment. Its extraordinary how wrong everything is right now just when the fed wants to hike rates. I accept they want to hike. Big show coming up. Give me an industry thats doing better than three months ago. Give me one industry. I dont have one industry. Pro football . Maybe. The eagles. Im downgrading everybody. Im keeping panthers as a bye. Im downgrading the rest of the league right here. Got you. See you in a bit. We come back to wrap up the week that was on wall street and look ahead to next weeks big fed meeting. Look at futures down across the board. Dow opened lower by 157. 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. 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. This Holiday Season, gi see you brought a friend . I wanna see, i wanna see. Longing. Serendipity. What are the. Chances. And good tidings to all. Hang onto your antlers. Its the event you dont want to miss. Its the season of audi sales event. Get up to a 2,500 bonus for highly qualified lessees on select audi models. Ahh. Steve, other than making me move stuff, ces. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. We heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Our guest host, Greg Flemming flemming joining us. How will advisers feel going into 2016 . For our financial advisers, 16,000 and their clients, 3. 5 million clients, its been a challenging investing year given volatility in equity markets and the whole impending rate rise coming off zero rates. I think heading into 2016, theres a lot of caution. Jim cramer talked about that from an industry standpoint on the corporate side. A lot of caution. You know, cautiously upbeat as well in the sense that ultimately as ive said multiple times on the show, the underlying economy is going to drive where markets go and the u. S. Economy looks like its accelerating in the positive direction. When you hear jim saying the smartest guys, biggest guys in the room got this energy thing wrong and with oil moving further lower this morning, how much additional pressure could that bring . Youve seen these cycles before, greg. How much more pressure could that bring to bear on markets before the positive story shakes out . Clearly the Energy Sector has a huge impact directly there. One of the positives that joe was talking about earlier, the tailwind from these lower oil and gas prices on the consumer and Many Industries across the economy when the price of oil is where it is, there are a lot of winners from that as well as those that are more challenged. Airlines are doing fine. Airlines. Again the consumer. I think the u. S. Consumer is in surprise mode on the upside. There is a lot of caution in terms of our clients and advisers. If the economy does accelerate in 2016, it could be a much better year than people are anticipating. You think it will take a while for people to get their real arms around what the first rate hike in nine years actually means for investing Going Forward. I think thats how they think about it. I think its been overdone though. Its 25 basis points off zero. Its the start of a change of a cycle and policy. One thing people will look at closely is what the fed says in terms of timing. Will it be three more in 2016 . Four or five more . Do they actually have to move faster because inflation is starting to move and trying to get ahead of it. What about geopolitics . How concerned are you about the events around the world . You know, concerned. What i would say and i always say that in response to this question. If you look back three years, five years, ten years, weve had geopolitical events on a regular basis for decades around the world. Its a very complicated, complex world that we live in and things happening on geopolitical front all the time. We havent had many years if you look back over the last two decades where you havent had geopolitical risk. Thanks so much. Make sure to join us on monday on squawk box. For now, squawk on the street is up next. Good friday morning. Welcome to squawk on the street. I an historic morning. Big selloff in the making as oil, currency, high yield sparking investor worries today. Well get to that. Europe is down 3 . Retail sales in the u. S. Were