all-time closing high. >> plus, it's cybervandalism, not an act of war, president obama downplaying his comments on that sony hack. we'll show you the reaction from the ceo of sony pictures. >> and shares of abbvie getting a big boost in the premarket after the latest salvo in a drug pricing battle. we'll explain all of the twists and turns. a holiday-shortened week on wall street, stocks in the midst of a three-session winning streak. s&p with half percent of its all-time intraday high. yesterday the saudi oil minister said opec will not cut output, regardless how low prices may fall. he blamed nonopec producers for the slide in crude. >> doug saying, yeah, we'll fee it in some ways but called it a giant economic stimulus. >> last week we began to see industrials that reported okay numbers, not great numbers. percolating. and it was almost as if people are beginning to realizing that lower oil prices provided a stop -- provided that they stop plummeting -- provided that they slow down. the tax of opec too high. maybe this the real price, the market price. i know dave cody from honey well, saying you don't understand, $100 a terrible price for the world. terrible april giant headwind. may have been the reason we didn't have a great recovery. when i read stories that say oil done come back. i say, you know what? i see industrials going up, retail's going up. it's hard to find anything that at the end of the week was not going higher, and that started making sense to me. >> yeah. fedex takes its price to 195 from 175. >> went over that conference call. i mean i said at the time i thought it was a good quarter. what happened, people seized on a couple of comments basically about their fleet and fleet maintenance and also about the west coast ports. this west coast port story has been continually downplayed because we can't believe it could be a slowdown. >> right. >> at ports by a handful of workers. but it's clearly impacted. >> this, i think the largest or one of the largest single days for delivery in the country, and a lot of press about that, both fedex, which has hired 50,000 additional workers and u.p.s. which i believe will deliver 34 million packages today. >> they got a lot of different variable rates. so it's like really difficult to try to model what exactly u.p.s. can earn or fedex can earn. but i think that we've all come to realize that black friday kind of meaningless versus this one. you know what else has been meaningless? i've been watching how the papers have portrayed our averages. we had, what, the -- on thursday the 49th day we had -- >> yes, tried for 50th record. >> b-5 of the new yooshew york . this morning giant pictures of packages but nothing about the fact averages are amazing. what happened, what happened to the idea that somehow if you have maybe one of the biggest years ever it would not be about whether the fed was about to tighten or not. >> right. >> what changed discourse in. >> but you want to see that, right? you want to see that wall again of worry. >> i think -- >> or complacency. >> i think the idea that the -- that it doesn't matter, that you're not being brought in. i know we had good volumes today. but it doesn't matter. this within i thought for sure people talking to me about the market. went to the elks -- >> of course the elks. >> no one mentions the market. it's almost as if this -- it doesn't matter. how can that be in. >> people mention oil prices? >> yes. everyone's mentioning gasoline as being something that made them feel better. >> aaa average, 2.45. that's aaa. there are different numbers. 24% down year on year. 24% discount. >> i think i know -- i was doing work on the impact of texas, and everyone wants to play about the impact of texas going badly, if you go over darden call, olive garden in texas, no decline whatsoev whatsoever. what would be an early indicator. >> people do a lot of driving in texas andnary all benefiting from the lower price of gasoline. interesting story in "the journal" which they do detailed recording on saudi arabia's decision not to cut production. >> very -- there it was -- >> us against them. >> in that -- that's the initial story. then denied at multiple levels people say european demand. no, no, if we flood the world with oil, somehow the major companies that are -- that were minor companies a few years ago will stop. i thought it was more based on eog, pioneer. >> the question will be, are they correctly anticipating what will happen in terms of production here or perhaps are they off? you've mentioned many times, depends where the well is. you can say bakken but it doesn't mean this is productive as that or the break even on this well is the same as on that one. but it may be 40 bucks they can still do business. >> they -- 18 months from now, given -- i think we can -- if you study 1999 collapse, you'd be shocked how quickly exxons of the world can shut that. there is a way to be able to just stop production and then that does create a decline in supply. it's 18 months. >> let me ask you this, all of the headlines, it's window dressing, everybody's dressing the tape, they want to show they own it at year end. do you want to chase a market after the second-best week in two years? >> on wednesday i said let it come in a little, market was up, dow was up big, dow dropped 100 points and immediately the short-term guys on twitter becoming less and less valuable, i think, cramer kept us out of a rally. i mean you know? i probably have been the most bullish guy on air. >> some argue too bullish. >> in the country, okay? really, honestly. >> you kept us out of a rally. >> yeah. >> thanks, thanks. >> we wanted a rally. >> i apologize to everybody. i think the answer is you want to be in stocks that haven't kept pace still doing well, why i mentioned industrials. industrials have not kept pace. i love to say the bank but was i think the way the industrials are act, the real investment trust acted the way the utilitied acted -- big week for utilities -- tell me the ten year's going well, too. >> what. >> where did you get to that one? >> looking at utilities, the food companies, everything that yielded 3 had a gigantic move last week. >> it would be nice to go into one year, then two, then go to break. every year for last seven years we've been anticipating -- >> i need you to look at american electric power. >> i will. >> southern. >> i am. >> edison. look, first energy, let's go down -- exelon, these are not great utilities, dominion, duke, the rally last week that took them -- all out of the 4s into the 3s, thigh not because we're generating more power and they -- they pass on the low cost. so what this really said to me was, desperation for 3% has to be coming out of somewhere. and i think it's that people say ten year's going to 1.99. >> finally this will be the year it goes to 3 as everybody's saying it goes to 199. i'll take the other side. we might as well start taking bets on 20 -- >> i think they could be wrong, utilities. that may 2013 scenario changed people's minds. >> wasn't it james carville who said if there is such a thing as reincarnati reincarnation, i want to come back as the bond market because they get to intimidate everybody? >> right now so many people on the wrong side because, look, there's -- the economy's quite strong. >> yes. it does appear to be. >> but in europe the economy's quite weak. >> we'll be talking a lot about the ecb and qe. >> they have to do certain things. and that, i think the ecb and qe is what's going drive things to 2 and utilities are anticipating to below 2. the focus everyone thought -- big money thought we should be at 4 why big money sat out a lot of the rally. >> we hit 2 before we hit 3? >> yeah. >> sony pictures, remember them, they are exploring distribution options for the comedy "the interview." president obama said he would review whether to reclassify north korea as a state sponsor of terror in the wake of the cyberattack on sony. a cnn interview, sony's ceo responded to the president's criticism of the studio's decision to pull the film. >> the movie theaters came to us, one by one, over the course of a very short period of time, we were completely surprised by it, and announced that they would not carry the movie. at that point in time, we had no alternative but to not proceed with the theatrical release on 25th of december. that's all we did. >> so you have not caved, in your view. >> we have not caved. we have not given in. we have persevered. and we have not backed down. we have -- we have always had every desire to have the american public see this movie. >> all right. so he says we wanted everybody to see it the people who would allow them to see it prevend us from allow them to see it. i mean -- >> declaration of war friday. >> yeah. >> the president's press conference? >> in my mine, the broader ramification of this, forgetting first amendment and creative license and the ability of seth rogen to have a movie that he had made seen, i want more information on exactly how long these guys, whomever they were, most likely north korea, in the network. did they just get in that easily over a short amount of time and steal everything there was to steal, or were they sitting in the network for a long period of time or somebody else they were able to access or use that to gain all of this? and, frankly, are we in a position defend these attacks against financial companies? that will be -- that will be even more defining, though this is seminal change. >> speaking to the ceo of red hat on friday, they had a fabulous quarter. i said cybersecurity? yeah, we all have to be focused on. he's a very good executive. used to run delta, too. there's a like, yeah, everything's going to be -- just get oos used to it. >> why hasn't fire eye taken off in the midst like a rocket. >> we don't have anything. although palo alto's doing better than mosting people feel palo alto has something. cyberarc has a -- has a fire wall around that key, the key master, so to speak. you're the ceo you can be in charge of everything. there's a master key, like if you're in a hotel, they do master key work top me, i'm waiting for someone from sony to say, this what happened and we didn't stop it, and i don't think anybody knows. >> no, i'd like to see. i'll learn more, obviously i'm a reporter, i can try to make phone calls and figure it out, but so far it's eluded people in terms of fully understanding it. by the way, i'd like to know what happened to jpmorgan last summer. >> as david carr wrote, it's not like sony went through a bad hacking of the playstation a few years ago under stringer. it's not like they reinvented the wheel in terms of protecting infrastructure. it's amazing. >> everyone's been overrun by this. it's funny because i think the younger people, we were googling this weekend funny things that have come out about sony from tapes, and it's like, you know, 50 million people have googled. sony's become a laughingstock and they're serious people at sony. but there is -- that is most googled thing this weekend like, you know, stupid things that -- of sony that are shocking. >> right. >> of which there was much. george clooney, spending too much time on his tequila? i don't know. >> hope they were practiced in the yard of cyberespionage and sib terrorer will not start wiping out financial records. >> are you going to pull your money? >> not yet. >> where am i going to put it? >> under the bed. >> go kyle bass on us, put nickels under the bed. >> my late father said, david said you're overstretched in the houses. >> last thing, last thing david says you're very overstretched. >> i never said you're overstretched deposit various monies all over the world, in the walls. >> good news for abbvie means bad news for gilead. with holiday shopping season hitting the homestretch, mastercard's president of 0 north america, his take on everything from cybersecurity to apple pay. take another look at the futures, dow begins fewer than 200 points from 18,000. more "squawk on the street" live from post 9 in a minute. ♪ my baby drove up in a brand new cadillac ♪ ♪ ♪ my baby drove up in a brand new cadillac ♪ ♪ ♪ look here daddy, i'm never coming back ♪ ♪ discover the new spirit of cadillac and the best offers of the season. lease this 2015 standard collection srx for around $359 a month. hurry in. offer ends soon. about what happens when you turn sixty-five. but, really, it's what you do before that counts. see, medicare doesn't cover everything. only about eighty percent of part b medical costs. the rest is on you. 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[ male announcer ] go long™. asbbvie getting a lift. express scripts will cover the firm's newly approved hep c drug after lining up a cheaper price. express scripts will no longer cover competing drugs beginning january 1st. gig bigg news over the weekend. >> shocking story. the idea express scripts controls 70% of the market, says gilead you're out or use abbvie. we know on friday abbvie did not be price competitive as people thought but turned out to be the listed price. they discounted, we don't know exactly how much, but express scripts, when meg terrell asked a discount we didn't get that. but the next thing the gauntlet, something my friend is writing about in street.com, gauntlet, express scripts said, you know what? this is the beginning of the pushback. we are not going to let these drug companies continue to charge outrageous prices. this happens to be one of the few examples, it's a me, too, product so they can -- >> they can but it's four times a day, a few pills in the morning, another one as the next one from gilead is once a day. >> right. >> once a day for 12 weeks, you cure the disease. it's $84,000, we've talked a good deal about that. making it $10 billion drug for gilead. enormously important. but this is an important marker here. no doubt about it. the stock down 12 bucks. >> you'll hear people say, you know, drug companies can no longer afford to spend that money to develop. there was a sense this was a windfall profit for gilead and now there's a real competitor. are there other drugs that are -- can you -- celgene's down big. >> j&j out there for hep c. >> you see achillion's got one, that looks interesting. i come back and think, who else can express scripts pit against each other? those of us who take medicines that are generic, a lot of doctors say, that generic formulation is not exactly alike. we don't want to use the generic and you've got to pay yourself. there is somewhat of a precedent for not necessarily taking the exact same medicine that is as good. but it was surprising. this medicine's inferior, in terms terms of regiment. >> leads to likelihood of a suck es s success. >> abbvie after coming up 3 -- my charitable trust owns abbvie -- is coming in because of the pricing structure that we thought existed until the weekend. >> you think gilead responds in some way? you think they have to break price here? >> that express scripts agreement apparently is iron-clad. >> right. >> not able to get in on it anyway at those point. >> people have been asking what do i do with celgene, with gilead. >> you said wait for the data point. >> i said wait, now the data point come out, it's negative for the group. i have loved the group. you have to take a pause. see who could be hurt. celgene, there is -- there's other drugs besides -- there's other drugs for m.s. out there besides biogens, other drugs for the macular degeneration that regendero regeneron's on and people will snapback and realize express scripts is an anomaly. this is a game changer because no one expected a signed, sealed, delivered i'm yours abbvie that they were all set, all set to do it immediately? take your breath away. >> a pause and take a look. >> nice steve ie wonder referen, too. >> take one more look at futures. not only has the dow and s&p recovered its losses for december but the last eight of the past ten decembers have been positive. more squawk on street from the nyse in a minute. ♪ there's confidence... then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts means your peace of mind. it's no wonder last year we sold over three million tires. and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪ ♪ monday, december 22, how did that happen? >> i know. >> we've got a "mad dash" for monday, of course. back on cybersecurity, i guess. >> yes, palo alto, piper says, they take pricing -- the price from 131.50. why is this important? they were r. widely perceived to have the gold standard of being able to protect yourself. if there is a gold standard, why are people constantly being hacked? okay, why at a certain level people say, i'll bring in palo alto and that's the end. we're doing our best. this is a realistic company. they've never said, stop worrying. they have always said -- >> always going to be, we take, they -- it's a back and forth. >> but there are a lot of systems that are behind. what palo alto said, look at revenues, you see how small they are, you realize how many banks have to do stuff, credit card companies and this, because this the gold standard, carl asked me a question, how about fire eye? fire eye is not the gold stand around fire eye's a very good company. there's no doubt about it, they're a good company. but people regard palo alto as the most forward thinking and cya, bring in them, say i did my best. >> it's gotten to the board level, that is cybersecurity. it's not as though board members not sitting around, not asking about it. >> they are. >> not clear that the cto, the ceo have answers, but they should. >> right. this company, they've been helpful behind the scenes, very helpful to me, saying jim, you're too confident. you ought to be checking your bank all the time. that's where i get that stuff. i do check my bank constantly. i want -- another one to talk about, pacific crest lifetime warner, and i -- the thing i find about this interesting, david, here's an -- this is a price. >> right. >> at the time, this seemed expensive. how did this debt to where it got here on its own, is this because when confusion that a pure play time warner is worth a lot more now that time is out? >> listen, you ask a lot of different questions there. i think people believe this number here is, wow, we are back to 8500, overvalue. you've got remember, of course in response to that, and the move down, time warner came out with specific goals. six bucks in 16, eight bucks in 18, in terms of earning. that has helped this show a great deal of value potentially for content and there's also still a little bit of takeover premium in there, though it's a couple of years. >> these guys never fought to take over antitrust. is it not natural to use their security to -- >> we'll miss the bell if we don't go. talk about it after the bell, in addition to everything else we've got moving. 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[ male announcer ] get a 4 week trial plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again. you're watching cnbc "squawk on the street." the opening bell in a few moments, as we kick off a holiday shortened week. closed christmas eve early, clos close christmas day. it's caterpillar celebrating its 85th listing anniversary. over at the nasdaq, u.s. postal service operation santa making holiday wishes come true for needy children. did you try do any shopping over the weekend, jim? >> yeah, i did. i found it wasn't that crowded. >> shopper track thinks that we're going to hit 10 billion versus 9 billion for black friday. we have calls on coach and kors. a neutral on both. wondering how you feel about this name, as we go -- >> i shop all -- i didn't go into the mall. i went to local merchants. if the malls are the -- how are the local guys doing? local guys, ask each one, local guy's doing okay. i think overwhelming lower gasoline prices changed the attitude. just a huge boon for everybody. i would love to see travel numbers because when i look at travel stocks this weekend, the hotel stocks, they're on fire. they're just continuing to go higher. so i mean, it's something that is -- i think -- i think we'll have a big vacation period. i think people are going to spend more on vacation. they have more. they feel like they have more. they feel wealthier. >> we're doing a segment later on this morning about, i think, millennials specifically, they'd rather pay for experiences than products. they'd rather spend money doing things rather than having things, if you know what i mean. >> you know that's interesting because there is a backlash among the younger people i know against the huge present thing. but i just thought that was kind of part and parcel with the anti-materialism of the next generation which i feel, i feel -- >> you feel anti-materialism. >> i do. >> reflected in your own beha behavi behavior. >> no, same old, same old. i fiend people, you know, hey, let's pile on the gifts. maybe we do something better. >> swir winners today, t.j.x., amazon, darden, right? >> t.j.x., when li looked at charts, off the chards good. kohl's did not report good numbers looks terrific. one that stuck out of the retailers i haven't been to in year, dillard's. dillard's doing -- there's one you haven't heard of in a long time. >> yeah. as we spoke about not long before the open, of course, gilead down sharply, 12%. celgene following that with a lot of 5%. but the biotech complex if you call that, including buiobiogen losing a good ability of ground on express scripts news. >> if express scripts is truly going toward an inferior formulation, the idea that we could have a couple of companies saying, you know what? you may like the celgene drug but that's not -- we've got a drug not as great but we'll get you a good price on it. i mean that's -- look, you may want to go to nordstrom's but kmart's got a suit you haven't thought of wearing. >> expenditure for medicare for the hep c, think of that, people are afraid it will bankrupt states and/or -- not bankrupt, that may be too strong a word. >> no, no, but number were so huge if everybody was cured. >> 84,000, 12-week treatment at once. >> gilead, when we saw the pricing, seemed outrageous. but if you have the disease, what's outrageous? nothing. what do you pay for a cure? hey, you're going to die. if you pay 80,000 you live. end of life amounts spent in the country, this was kind of a bargain. when i speak with the orphan drugmakers who charge 340,000 for a pill they say health care companies want them to do that because it costs $800,000, $900,000 for united health. the market's taken care of itself in a way i didn't think the market would do. >> you've been vocal on twitter past couple of months. oppenheimer initiates with a target. >> i told david last week, carl, i said, in the spirit of kind of the christmas future and the christmas carol. >> peace on earth. >> goodwill toward -- >> you know, i'm done with knocking dick c. cso. >> you're being kind again. the kindness continues. >> and then, bob pisani talked about a book that i had read that i like, the dalai lama's book about happiness. my daughters told me, dad, never too late to change. >> nice. that realm, s&p capital today, sam stovall, says don't reduce exposure to tech though it's done so well. leadership has not outstayed its welcome. you agree. >> tech is bifurcated. we have remarkable action in western digital. in seagate, hewlett-packard, but, geez, the cloud names, and the social media names have b n been -- geez, i imagine they're going to be sold between here and year end. >> talking facebooks, links ins. >> facebook holds up better. splunk, a workday. one thing that oracle did in the conference call, listen, guys we're turning off the oxygen. i told them i was going to use it and he'd say go ahead. now i felt guilty, the speirit f kindness. >> beneficial effects of lower oil prices, more than we've talked about the reverse, which is of course certainly on the stock market side, the fact that many stocks, after a big rally last week, down this morning with oil down a bit. i believe it's -- >> chevron, anadarko, these had to give up something. >> anadarko down. >> the slowing down of the decline really gave breathing room for people. i don't think you're going to see a total plummeting of the oil stocks like we had but you'll see a pioneer. anadarko has to get back. humongous gains in three straight days. >> s&p energy up 9% last week. interesting taser, we had a horrible story of nypd officers shot and killed over the weekend. >> horrible. >> back to 2004, as oppenheimer initiates with outperform, $28 target. >> reasonable piece. talking about how, look, you have to document what you're doing and the taser cloud product and the taser ecosystem does make a lot of sense. a cautionary line in the piece says, remember, these are police forces they don't move overnight. but it did basically say, that everybody's going to have to -- the shootings have to be ameliorated, we can't have as many shootings and we can't have deadly force and we also have to have well-documentation so we don't get into the grand jury room and say, hey. tempers are flaring. stories are horrible. execution, you started thinking the way the "times" has good stuff, you don't want it to go back there. i'm no sage but it was pretty brutal. >> with all of that, dow up 68 points. about 125 points from 18k. bob pisani's on the floor. >> a bit of a rally going on but it's selective rally. first off, consumer discretionary leading the market, carl. but seeing weakness in health care names, possibly on the announcement of abbvie. ands in energy stocks. point out the usual names, to the downside. west texas intermediate, down 1.5%. your usual big names here in exploration, drilling, anadarko, devon, national oil well, apache, all down 2%, 3%. i want to point out, we haven't talked a lot about natural gas, what's go on there. look at that number. down 8.7%. this is today. so this is a new 12-month low. in fact, 15-month low, i believe in natural gasp and while natural gas is down 20-some percent this year, maybe 27, 28%, that's not as much as west texas down 42%, it's getting a lot of attention. and attempts to distinguish between gassier plays or oily plays is not playing out very well. we're seeing notable double digit declines in names that are even more associated with natural gas at this point. look at some of the gains. these are more gassy names, you might call them, range resources, encana, chesapeake, southwestern, suffering declines as other companies, exploration more on the oil side. the market is not making that much of a distinction. today look at chesapeake energy, chk that is down as well as we've seen natural gas move to the downside. there you see chesapeake, down 6%. so pay attention here. the warm weather's what's been moving here. we'll have more warm weather this week. if we don't get cold weather in january, we'll have a notable outsupply here. remember the marsalis shale the largest gas field in the united states. we're only scratching the surface. i've seen estimates, nat gas growing 20% a year production in the united states. talk about oil production perhaps slowing down. perhaps look at the whole natural gas end of thing. you have talked about the biotech story this morning with abbvie. and gilead here. you can see the big move up there in -- modest move in abbvie. notable move to the downside in gilead. express scripts just up fractionally. finally, we're at the seasonal time of the year, review the traders' favorite talk, what moves, what doesn't. santa claus rally, last five days of the old year, it will start wednesday. first two of the new year. it's a consistent gain for the s&p 500. since 1950, up 1.7%. it's an old chestnut a laugh at them. it's a very good track record. the problem is people confuse them with other seasonal plays that exist at this time of the year. most obvious one is tendency for stocks to rise in december. it's the number one month for the s&p 500. averaging up 1.5% since 1950. two for the dow jones industrial average. the free lunch, you get tax loss selling of certain stocks in the middle of december that happened big time with energy this year. and they tend to be up in the first part, the first two months of the year, that's called free lunch play. then there's the january effect, that is the tendency of small cap stocks to outperform in the month of january for various reasons, maybe largely related to dividend plays. don't get all effects confused. bottom line, all happening at the same time, and that's why traders are optimistic about the end of the year and beginning of january. right now dow industrials up 59 points. >> as you're getting photo bombed by kids here. >> bond pits, rick santelli at cme in chicago. rick? >> good morning, carl. you know, rates are mostly flat. we see five-year unchanged. we see the two-year virtually unchanged. long end yield's up, most likely some of the curve flatteners coming off. start at short end, two year, we have a two-year auction today. one issue markets getting closer and closer to maybe 70 basis points. if you look at old guy, currently trading, it's hovering around 64, open the chart up to two years, we're in a zone. i mean, friday we turned a whisker higher. but since spring 2011 for the short end. as i said, though yields unchanged, there has been more sticky selling the closer you get to the short end. if we look out to tens, whether it's one day or two day, yes, we've seen yields move a bit but not all that much. best context to look at it in terms of october 1st, with complete acknowledgement that mid month we had what was probably the most important session of the year, some will call it akcapitulation. 214 close continues to be, most likely will be, something focal to the market as we get close to year-end and the final settlement of 2014. bunds overseas, shadowbox with the 60 basis points. even though it's up a little bit for the most part, it's hovering at the lowest yields of all time. and everybody's talking about what the swiss are doing, give us your money. we're going to charge you for it. the dynamic is in place. many paying attention to it in europe with negative short-end rates. dollar/yen, i see looking up at the board, coming back a bit to retesting this 120 area. huge psychological area. chart goes back to summer '07. so you can see how it comps and how significant 120 dollar/yen level is. back to you. >> thank you very much. rick santelli. when we come back, what to expect from the financial sector in the new year. we'll talk to the ceo of firm kbw. early gains fading. s&p roughly flat, after the strongest four-day win streak for the s&p? over three years. we're back in a moment. 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eyeball move from traditional tv to streaming, advertise willing shift to digital. marketers look to grow roi from ad investments by take 30-second spots across platforms while native advertising, subtle branded content, will become more prevalent, making it harder to tell when marketers sponsor videos. third, get ready for more m&a. as media giants buy start-ups to bolster digital presence. following in the footsteps of disney's acquisition of maker studio to compete. consolidation of cable channels, everyone looks for more leverage to negotiate with distributors. >> speaking of which, comcast, our parent, up a percent today, trying for $58. that is going to be a new all-time high. >> the papers fill with how people aren't taking cable. >> right. >> i, you know, it can't -- the stories have to be an exaggeration. >> still 101 million households take the cable package. you're talking about a large amount. >> like the high speed. >> for comcast, of course, when and if they'll be able to complete the acquisition, time warner cable, waiting for some time. title ii reclassification, seems it a reality, but take sort of the tact that is least offensive but still likely will happen. we'll see title ii in terms of net neutrality. >> disney's above 93. i won't make a pick your favorite media stock but you said night things about igor. >> i pitched disney hard. i do my gift appeal, you buy your kids one share of disney, get them involved. people say why disney? why not regeneron? the idea is there's financial education going on here. if you get them involved by buying a stock that they may actually -- you may take them to, they may understand the concept of owning a stock. i'm a throwback, i want people to own stocks. give them one share of etf that covers utilities, you know, it's one etf that xs out the euro. give them a future. give them -- >> give them an algorithm, why not? >> i had the guy who runs a dating service, okay, e harmony i said you have an algorithm. he says, yeah, we have an algorithm, i want them to fall in love. i know what there's not an algorithm for. for having desean jackson play for -- >> ouch! not that you're bitter. >> that algorithm did not work. >> some of them don't. >> right. >> cardinals' quarterback algorithm did not work. we can go into a lot of algorithms. >> faulty assumptions undermine algorithms. >> is that what it is? algorithms can never be wrong, it's the input. >> we'll get stop trading with jim in a moment. dow's up 85. don't go away. 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(shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here; you better be on the right cloud. today there's a new way to work. and it's made with ibm. >> time for cramer and stop trading. >> one of the stock's i've held off on is rite aid, the reimbursement issues are behind them and the strongest group out there is the drugs -- well, dental group is strong and the drugstore group is strong. walgreen reports tomorrow, they are -- it's going international. cvs has done a remarkable job, even post-cigarette. rite aid remodeled stores, keep track of the fact that stock can go much higher. >> what's on "mad" tonight? >> ever since adam silver did that -- penned that piece in the new york times about how maybe it's time to have gambling, i've been following these -- you did an excellent piece on hbo about this whole notion of fantasy. >> daily fantasy. >> hot rosters daily fantasy. why do you watch the bill's game. you have sammy watkins. there's such -- one of the reasons why espn has done well, i've been saying about my friend adam, fantasy has made it so games you didn't care about it fourth quarters you didn't care about do matter and it's helped ratings of all football, it's why football does well. i want to talk about gambling, the idea this has changed. disney has 90 million names in its espn fantasy. this is a game changer. i want to know whether legalized gambling is coming. will that be one more competition to what we do for a living. >> will it stick this time, unlike poker. fascinating story. 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breaking news, hampton pierceson with that. >> carl, in november, existing home sales fell 6.1% to 4.93 million units, the lowest monthly tote until six months for existing home sales. decline was nationwide in all four regions, the northeast down 4.2%, the midwest down 8.9%, the south, 3.2, and the west, 9.6%. we did have a slight revision downward in the october figure to 5.25 million. that is the high of the monthly total for the year. year-over-year, we're up 2.1%, even despite the big decline in existing home sales in november, value, median home price val use continue to rise. 205,300, that's a 5% gain from a year ago. inventories continue to fall, 2.9 million units available for sale, down 7% from october. as 5.1% overall supply of housing on the market as we speak. now the chief economist of the national association of realtors characterizes the november decline as, quote, puzzling. he says he believes overall it may end up being aberration but does say that there is an overall factor in why we're not seeing stronger home sales overall. he calls it the lock-in effect. a lot of homeowners very comfortable with existing low mortgages that they have right now and that's in one less incentive to dive into the market and buy an existing home. carl, back to you. >> makes sense. thanks for the breaking news. with that data, check on how the markets are reacting. off session highs but remaining higher. with the dow up 64.5 points. s&p 500 flat but seeing green rare res. also want to take a quick check on nat gas right now because it is under pressure, as you can see. weighed down heavily 3.13. joining us discuss the market action, tom lee and brian relling of wells fargo adviser. you're getting your santa claus rally you're pecking. the existing home numbers not high. worried about the data turning especially in housing here? >> i think we need to give housing more time. one of the things we talked about outlook for 2015 there's been some difficulty for households getting credit because of the number of foreclosures in short sales that tainted people's credit histories. takes seven years to get those taken off the record. first wave of clearing the personal credit history starting this year and at the end of the year 20 million households. >> not surprised to see data on that. brian, you've seen the market, stunning rally that we saw last week, the bounceback from the seven days of declines. too late to chase the rally or does history guarantee us that the seven day, last seven days of the trading year going to be positive for the bulls, that's how to works? >> i don't think it guarantees us anything. but i do think that market has further room to go here. low interest rates, low inflation, low unemployment, all good signs that should point further upside for the market. >> i know you pay close attention to fixed income what happen message are you getting from the bond market? is it different from the stock market after janet yellen and the new, patient federal reserve? there well, no. we see the biggest em paimpact bond market high yield. we saw a good sell-off on falling oil prices and that's a illiquid market this timing of year. we've told investors to be patient, work through this illiquidity and ynext year migh good buying opportunities once we find a base in oil. >> i miss the currency crisis and the collapse in the russian ruble but it's a lingering concern. russia's finance minister coming out just this morning saying that russia could face a full-blown economic crisis as a result of what is happening. how do you protect yourself in u.s. equities? >> investors have to watch this carefully. it's linked to oil, linked to sanctions. i think a lot of investors are worried it's '98 again. one difference the debt situation, especially for government, it's not as bad. so i think we should keep an eye on it. the stock market was worried about it a couple of week ago. i'm encouraged we've been able to rally from that. i think it tells that is fundamentals are better than we expect. >> tom, you've got a couple of lists of stocks you think will do well. boeing, at the top of one. overall, technology, health care, financials. everybody saying the same thing, technology, health kashg financials. you're adding in consumer cyclicals? >> yeah, i think that is consensus to be long tech, health care, financials. tension is in a rerate cycle. tech could be a big group for the next five years. >> because? >> well i think it's about pent-up demand and the need for capital spending which, you know, 40% of it is tech. so tech is a group that's d-rated because people don't think it's grothe. i think it's going to see nice growth. consensus long consumer cyclicals and energy stocks. >> brian what happens next year with yields on the ten-year, though the european central bank is going to attempt qe? i don't know whether people will sell that fact when it comes through. i mean do you think the rates here can stay low for long even if you've got this lrecovery, even if the fed moves on the short end? >> yeah, no, i think the ten-year rates can stay low for quite a while. i think they're going to tend to move a little bit higher but i'm not anticipating any big moves especially with inflation staying as low as it is. i think they move next year as the current flattening. i see the fed moving, current flattening and that has impact for a lot of income-type investments. that leverage doesn't work as well in a flat interest rate curve. >> tom in terms of the short-term action, the russell close to some of the levels that it's topped at twice this year. >> yeah. >> are you worried about that? also on top of that, potential for a higher cost to capital with rising rates or dislocation in energy markets? >> small caps have been disappointing this year. i think we're going to see reversal. i think small caps should do well. it's a planned u.s. acceleration, it's a nondollar play. i think valuations have gotten attractive in small caps. >> you made your name in part of focusing on money managers behind the s&p playing catch-up the journal devotes the front page story. what are expectations next year in terms of managers lagging broader markets. >> it's three tough years for active managers. this year, actually almost records. worst since '98. we're optimistic that next year's going to see a sea change. we haven't made that prediction before. i think two things that play, one, low dispersion, low intersect ter volatility. second, small caps have bond worse than large caps. we think next year will be good. >> brian, you're looking for a flatter yield curve, stronger u.s. dollar. is it going to work out? >> yeah, we think it continues. again, we think that u.s. large caps lead the way next year. so what's been working continues to work. >> all right. brian and tom, good to see you both on this monday morning. >> thanks. dominic chu, quick market flash here. >> watching shares of financial. embattled mortgage service companying, the stock market moving toward session lows on news that its executive chairman will step down as part of a settlement with new york's top financial regulator after the probe of the treatment of homeowners. the company will pay $150 million fine as a result, shares down by 17% on the morning trapd the stock lost 65%. simon, year to date. >> next on the program, north korea is threatening to attack this country if the government retaliates over the sony hack. we have the latest on how the obama administration might well respond. plus, the founder and coo of ustream tells what happens hen his business was attacked by the russians a couple of years ago. sony is his client. would he stream "the interview"? "squawk on the street" will be right back. hey matt, what's up? i'm just looking over the company bills. is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. north korea issuing a new threat against the u.s. in response to accusations it was involved in the sony hack, warning of strikes against what it calls all citadels. live in d.c. with the details on that. >> carl, this attack on sony has been disruptive for the company and the industry, but in an interview that aired over the weekend, president obama stopped short of saying that it was an act of war. take a listen. >> i don't think it was an act of war. i think it was an act of cybervandalism very costly, very expensive. we take it seriously. wlee respond proportionally, as i said. >> as you say, the north koreans issued their own statement, denying they were responsible for the attack and saying the u.s. should bear in mind it will face serious consequences in case it rejects our proposal for a joint investigation and presses for what it calls countermeasures. guys what the north koreans are talking about in that statement is a proposal that they made that the united states and north korea should engage in a joint task force of some kind to investigate and find out who was really behind this sony hack. as you can imagine, the chances of that happening are somewhat near zero here in washington. simonen? >> someone streaming site, ustream, familiar with what it's like to face an attack. two years ago attacked multiple times by russian sympathizers. ustream has sony has a client. leading to the inevitable question, whether they might be asked to distribute the film "the interview" given their lawyer said on "meet the press" they were intent on doing than joining us, coo brad hunstable. welcome to the program. what happened to you and the russians, then? >> in 2012, ustream was attacked really over a period of months by russian hackers specifically targeting citizen journalists on ustream broadcasting anti-putin protests. similar to the sony hack, as i said at the time, these attacks really were an attempt to limit transparency and really free speech of these broadcaster broadcasting from russia it was highly organized, highly adaptive. what they did is called a denial of service attack which overruns our servers and put us down for many, many hours. >> what did you do? i mean that's obvious, then, i guess, that you've been attacked when you see that, you know where you are, you know you have a problem. which authorities did you contact in this country, and to what extent were they able to help you? >> we contacted nefrn freveryon the state department department of homeland security. while i classify the u.s. government response, very sympathetic, i think part of the problem, the challenge was, at the time, and even still today, there wasn't a clear way that they could help. i think which speaks to the big question or the big answer, which is what's the solution? do we need a turnkey system in place to conspiracy companies like mine? it's one thing when sony gets attacked, they're a large, public, global company. but what happens to other start-ups that outnumber large companies? what happens when they get attacked? it speaks to we need some clear protocol and cross communication whi between public and private sectors how to handle these. >> having lived through the horror movie yourself, do you agree with president obama, that it's an act of cybervandalism and not cyberwarfare? >> yeah. i mean i think -- i think it probably is, as he classifies it, and certainly what they're doing is a step in the right direction. i mean, this, you know, communication across the internet is something that is fundamental to what companies like mine are doing, protecting communications and channels is important. today's companies are the bridges that in a lot of ways maintain democracy or such a part of democracy. so we need a strategy and front line support. i think what they're doing is a step in the right direction. >> but how do we get there? what is this clear protocol? what does it look like, brad? how do we get -- how does the nsa cooperate with people like you? what would the forum for that be? the glaring hole for me is the fact you have powerful defense companies in the private sector that are really probably more capable of dealing with this than we're giving them for and they're not part of the debate and i don't understand why that is. >> first off, we need a clear process on what to do. very similar to the same way everyone knows when we have a fire, you stop, drop and roll. every ceo, every business, needs to understand this is -- the world has changed. these are real problems and real challenges. is what the process to let the government know? the second piece is, once you know how to let the government know, we need to understand in reverse what's the government response and how to protect our assets? when this happened to us in 2012 with the russians, we are -- the best advice we got, me reaching out to other tech executives, the largest and public tech companies in the world, and internet companies, you know, they were telling us and giving us advice how to handle this which was significantly more effective than what we were getting from the u.s. government. >> if i look at banking, for example, the argument has been made over the years the brightest and the best end up in the private sector in banking and arguably not with the regulators because, for years and years they were so incentive advised to be there financially. what is the landscape behind closed doors the split between private and public? who has the know-how? who is it that you really need to get information and support from? clearly the fbi would be active in this. i mean what about the nsa? are they helpful? do they have incredible talent there that would not be found in the private sector? >> well, i'm certainly not an expert on that. but i do clearly think today that the expertise exists inside the u.s. government to be able to support, to be able to analyze and draft, you know, effective responses to these situations. so i don't know it's a talent issue. i think what is the fundamental issue is, we just need a much more clear relationship between public and private doing so we're not siloed in these sort of situations. >> brad, i want to ask about your relationship with sony. sony is a client of yours. have you had any conversations with them about releasing the movie "the interview" on your streaming platform? we've heard they still want to do that, it just a problem with the theaters. >> sony's, you know we work with them a lot oven past and they're a great company. i don't know that we're -- we're probably not best suited -- we don't stream movies. we're more focused on helping businesses with their corporate streaming. but in any way, certainly we can help, you know, the point is, you know, we would do that, but the point wise all need to come together and realize that this is a much bigger issue. as i said back in 2012, it hasn't changed today. >> brad, if they were to stream it, they wouldn't stream it in the normal environment. would be a specific stream along the lines of free speech, basically. how would you feel about that, that you could become, therefore, the target of the north koreans or whoever is helping the north koreans? does that new york it out knock park or do you suggest you might be willing? >> we don't stream movies. i don't know that ustream would do it, it's not the business model we're? whoever streams it, you are going to need to ensure you have all of the appropriate measures from a technology solution, from a scale solution in place. there are many companies out there that are large enough and can do this, can certainly handle it with ease. i don't think sony will have trouble finding anyone who will ultimately do it. but what is important is that we all, as ceos, all as business owners realize that, in a lot of ways it's much bigger than just our individual companies. this is freedom of speech. this is freedom of the internet. and that is something that is with our democracy and we want to operate over the next 20 year, we need to come together and work together to solve this. >> good to meet you, sir. brad hunstable, ceo of ustream. >> thank you. want to take a look at facebook this morning. briefly hit all-time high, 81.88, believe it or not. a stock that opened at 54 and change. it's up 9% in one week. market cap now closing in on 223 billion. what a monster move for facebook. >> that note that city said intake gram could be worth $35 billion, has to help after it paid $1 billion. good bet. bank stocks seeing steady gains over the past few months. the ceo of kbw with his take on the major themes that will move financials in 2015. we'll be right back. you can bring back a lot of things from a trip around the world. but you can't always bring back customer data. because many customers don't like it when their data moves around. can i go now? if you're going to do business globally, you need a cloud that can keep your data where it needs to be. today, there's a new way to work and it's made with ibm. dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. in 2015, kbw saying the sector will benefit from increased volatility. thomas michaud joins us. >> deal flow, whether it rolls into the new year. >> we think it's going to happen. bank mergers up 18% last year. we think that consolidation is picking up and we also think that some of the bigger banks will get involved as we get into the new year and looking out on the horizon. >> what about is the fear that the cost of capital's going up? what is the impetus for doing a deal now. >> comes down to earnings per share growth and some of the smaller banks don't have the models that are built for what you'll need in the future. i think there are ways that they can assist shareholders and shareholder return, make better banking companies, by possibly merging with other companies and getting some of the synergies and access to the new skills. it been happening for a long time in the banking industry. we had a time-out during the crisis. now it's back. >> you think the federal reserve and other regulators are going to let the big banks get involved? >> they'll change that and say biggest, no. >> okay. >> bigger than what we've been seeing, yep we think it's happening in the middle tier of regional banks. we don't expect eight banks in the united states to do any acquisitions. bank of america's at the deposit cap, they legally couldn't do it. it's going to be regional champions that are evolving, which reminds me of the 1980s when it happened. >> to cut costs, close branchs? >> cut costs, close branches and hopefully serve customers better as well. >> i read total fines so far, fining of banks one of the major themes around the world. $180 billion the figure that i saw. behind closed doors, is that changing attitudes? are they as bombastic as ever? >> if you look at the number of banks that paid $184 billion -- we wrote a report out, too -- that's a global number, with names of foreign banks, those fees are in the biggest banks. one of the things i've talked about in the past on the show how vibrant regional banking industry is below the global siffies. smaller banks have had smaller challenges but nothing like the biggest bank. >> what is your knowledge of what is happening in the bigger banks? vom too big, is that is not the case. >> if someone wanted holiday reading, read the fed governor's speeches. they are doing what they're saying, bigs are too big, too complex, too interconnected and nothing will stop until that can be -- >> next year, regulations go into effect, basil liquidity rules. >> we're recommending mid and small cap banks over big banks because of that partly because of that reason. headwind is there for the biggest banks. it easier on the smaller banks but still there for the biggest banks. >> generate fees advising on divestitures? >> i sure hope so. >> you think it's a possibility? is it a matter of the spaces. >> i'm going to give you the tom michaud view, this is something we've written a big report on, but i believe there's this capital arbitrage that works against you for the biggest global siffies. the boards over time are going think how to make the best decisions for shareholders and i believe it's what you just said, david. reading recently, i don't know how recently, but citi bank selling a division in peru. they'll sell things many of us didn't know they had it's part of the financial arbitrage because they're trying to drive what's right for the shareholders and i think that's what's going to happen in the global siffies, the biggest banks. >> big year, no matter what. please come back. >> i'd like to. >> tom michaud, kbw. >> former sony employees suing the company, claiming sony failed to protect their personal information. one of the lawyers for those former employees will be joining us live, after the break. ♪ music ...the getaway vehicle! for all the confidence you need. td ameritrade. you got this. gentlemen, meet our new cloud expert. [speaking indecipherable irish] my name's mccloud. get your totty business onto the cloud. it's like hee haw. you can't even beat em. i didn't understand a word he said. yes, the cloud is difficult to understand. mccloud. but we already have a cloud expert, cdw. they provide comprehensive multi-vendor cloud solutions that reduce it costs and enable innovation. mccloud just said that. ♪ about an hour into trading. some of stories we're watching, 7:31 on the west coast, sales of existing homes down 6.1 in november to 4.93 million unites, the low of the since may. gilead, biggest loser on the s&p-t, down 12%. express scripts will no longer cover gilead's hep c drugs. new milestones, lock heed north of grumman, hitting record highs. sony pictures entertainment facing three class-action lawsuits from former employees who claim the company failed to protect date tap the latest alleging that the studio went on a public relations campaign rather than giving employees proper notice of the scope of the breach what happen sony pictures' ceo michael lynton talked about strength of the cybersecurity. >> we had absolutely sufficient cybersecurity. i mean, both the fbi and the experts brought in said that the malware was so sophisticated that 90% of american businesses would have fallen prey to what happened to us. so, no, i don't think we were inadequate at all if our cybersecurity. >> joining us now is the plaintiffs' attorney, matthew george, partner with the firm gerard gibbs. ws welcome to the program. how would you respond on behalf of your clients to that assertion from the ceo of sony pictures? >> well i think there's a number of facts that have yet remain to be seen and one of the comments he made yesterday that was particularly concerning was that as far back as june, the company had notice that perhaps there was going to be a cyberattack or cyberthreats related to the release of this picture. so the entity behind that attack, if it was north korea, had used similar methods and prior attacks against south korea and its banks. so why didn't sony implement specific measures into six months before the breach in response to that? >> you're obviously more emphatic than that. you believe the priorities, so far, have been wrong in management's response? >> correct. i think, as we saw yesterday, too, in an article in "fortune" from a current employee saying they had trouble getting access to information from top brass at the company about the type of information that had been released about them, about typical measures they could take to reduce and mitigate the harm caused by the breach and particularly former employees that we've been in touch with have expressed a lot of concern about getting information from the company how to respond to this. >> i mean, you're very clear, you say california law is unequivocal, that the information must be appropriately safeguarded on behalf of employees. the question for a lot of people, whether an attack can be so big and so sophisticated and beyond the normal realms of what you might expect, that it is an extraordinary event for which the business can't really plan. this is what david boies, you'll be award, employed as a company said on "meet the press" yesterday. take a listen. >> this is not a sony security problem. this is a national security problem. and the government has got to lead. the fbi has just been terrific in this. they have been diligent, unbelievably competent in helping analyze and understand what the source of this attack was. now, the rest of the government has got to get behind it and has got to figure out a way that we can protect our national security. because this is a national security threat. i think the president is beginning to recognize that. >> you see mr. george, when you frame it like that, that sort of scale, clearly sony perhaps potentially couldn't stand up to that with all of the normal safeguards, all of the appropriate safeguards required under california law. >> well i think that, again, remains to be seen. there's so many levels at which it takes a hacker to conduct a breach of this depth and scope. i mean, there's the level of intrusion at which it could have been prevented or detected. what types of systems did sony have in place to froek aprotect malware on its estimates. how much data got ex-filtrated without alerts going off to the company. a number of cybersecurity protocols and agencies that can help set up those systems to detect that. and then i think, at the lowest level, you have a large amount of data that wasn't encrypted that was very sensitive to people, health insurance information, medical information, social security numbers that were in spreadsheets that weren't password protected fully or had weak password protection standards. so many levels which a cybersecurity program has to operate effectively. i think we'll have to examine all of the levels to see whether sony's claims that the program was top notch is true. >> do you have any other examples of other companies? can you prove that do a better job safeguarding employees' information as you'd like see here? can you cite any examples, or are you you planning to? >> we probably will try to throughout the course of the case, once we get a chance to examine what their protocols were. i can't point to a specific company now and say they're the top of the line in the industry. i think that ultimately we'll consult with security experts, there's a number of them out there that have special programs and services for companies out there to design these very folsom cybersecurity protocols and we can compare to other industry actors. ultimately it's relative to the type of data that's at issue and how it's stored and how it's protected sony had warning this was going to happen. what did they do in the interim to prevent the ultimate breach? >> one legal question, i don't know if you can help with this, last week some argued that they -- the reason they pulled the film was they figured, 40 million in production costs, 40 million to market, take the insurance write-off instead. can they do that? can they argue if it was in fact their decision to pull it? >> you know, i probably can't speak to that issue. i don't have enough information. >> certainly a curious wrinkle in that, don't you think? >> yep a little bit. >> okay. >> matthew, we'll leave it there. i assume the case will take years unless you settle. are you minded to settle? >> hopefully we reach a resolution where sonyisments better security measures forward that competent says employees that are affected and the sooner we get there, the better. >> matthew george joining us san francisco. we did reach out to sony for comment but as yet we've not heard back. the president of mastercard north america joins "squawk alley" live. he'll weigh on cybersecurity and protecting personal data. details of partnership with apple pay. dow's up 90. can it make a dentist when my teeth are ready? can it track my crew's performance, and protect their heads? can it tell the flight attendant to please not wake me this time? at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim? like, right now? can it download a track while i'm sampling it? can my keys find me? with the power of digital, analytics and automation, now every little "thing" can provide even greater value. ok, so can it tell the doctor how long i have to wear this thing? the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? if every u.s. household with here's aa computerfor you: used sleep mode when they weren't using it, how much could we save on electricity each year? up to $1 billion? $3 billion? $4.5 billion? the answer is... up to $4.5 billion. using your computer's built-in energy-saving features can generate real household savings. take the energy quiz -- round 2. energy lives here. take a look at energy sector, weighing down the broader s&p today again. dom chu with more on that. >> down by 2%, the weakest sector in the s&p 500, as oil prices move lower. oil field services company neighbors one of the biggest laggards in the s&p. in an s.e.c. filing friday, it's cutting the annual base salary of the ceo to 1.5 million from 1.7 million prior. chesapeake energy, newfield exploration, range resources among the laggards in the energy trade. tough morning for energy stocks. you get the sense it's going to be this way up and down for energy until year-end. over to the cme group. monday morning, rick santelli with the santelli exchange. >> good morning. thank you. monday morning guest, john brady. thanks for taking the time. here when you think short end, your dollars, not currency, 90-day forward rate you think of john brady. one of the big sessions where many traders on the floor saying things like my god 250 large traded in the eurodollars and the options, 250 large is how ma many contracts. >> 250,000 a contract, the notion is well over 1 million, not closer to a billion. these are large numbers that get traded here. >> what was the dynamic on that day, the reason i wanted to have you done. >> the employment friday we saw coming out of november payroll report. liquidity and there was very large trades here, and there was a shift in market expectations from the feds. >> put market expectation off to the side. we'll get to that in a minute. on a pure and simple, we saw selling which implies higher rates, which implies potentialle lay more aggressive fed, sooner rather than later, based on strong data. what's happened subsequent? >> subsequently a rethink. janet yellen and her press conference was balanced in terms of her outlook, gave the market a sense of calm, as she suggested that interest rate hikes are at least two meetings away, could be longer. euro dollar futures, the mid-june 2015 meeting's plying 55% of the chance -- >> would you bet your house and car on the date. >> june i would not. >> let me stop you there. many, many look at the predicting value of things like fed funds and the eurodollar curve, and it's more correct when on an established site -- cycle of tinting reason. >> correct. >> in '94 when we started the tight. ing circle if you look at eurodollar curve as a predictor, how well would you have done. >> not very well. >> you're a smart guy and smart people trade the term structure of rates and it does have movement based on data, because of the fed. but in some point, what i'm trying to get at, these adjustments can come out of left field and really be aggressive. >> well i think the argument there is perhaps the fed targets market volatility as a standalone asset clasp one thing the fed does not want to do this time around -- i believe they want to get away from the zero bound number of different reasons why -- one thing they don't want is an outsized mark reaction like in 1994. >> i want a red ferrari for christmas, i don't think it's going to be under the tree exactly. when we say things what the fed wantize start to get nervous. how much control will the fed have over discontinuous volatility, should it obvious to all that a tightening is here, or right before a first tightening? i can't believe if they're going to do it they won't make it somewhat clear. >> the fed does have some challenges. first, painted it several into a corner by allowing rate policy, short-term rate policy to stay at zero for longer than it should have secondly, international capital flows are a much bigger -- >> that's huge. >> -- part of the equation back in the '90s. >> that's right. >> two things that will weigh on the fed as we go into next year. >> john brady, you're the short-end guy, we want to have you back. do you think the fed will tighten in 2015? >> i do. >> you do, i don't. back to you. >> we know what to get you for christmas. thanks, rick santelli. two shopping days left until christmas. co-owner of century 21 live here at post 9 to give us his take on holiday shopping and how they're capitalizing on the last-minute shoppers. dow's up 85. "squawk on the street" will be right back. ♪ there's confidence... then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts means your peace of mind. it's no wonder last year we sold over three million tires. and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪ as 2014 draws to a close, cnbc is breaking out the 2015 play book, looking at ways to make money in the coming year. this hour it's sports. here's dom chu. from a-rod to donald sterling to ray rice, scandals plagued the sports world in 2014. there are three, bold predictions for 20157 nfl crosses the pond. after sell-out crowds for three games in 2014 at wembley stadium the national football league will announce it's first ever international franchise in london. not talking about nfl europe, par ii. with more than 8 million casual nfl fans in the uk, there is demand and passion. student athletes cash in. as ncaa revenues grow, so will the bank accounts of student athletes. 2015 the ncaa will continue to loosen rules to allow college athletes the opportunity to get paid. and not just scholarships but also a cut of the money they help bring into each school. this could be a game changer. two words -- triple crown. the year, 1978. the horse, affirmed. the last one to win the most coveted distinction in horse races. 12 horses have had a shot but fell short at the belmont stakes and itser to tur russ mile and a half track. in 2015 the triple crown drought ends. >> thank you to dominic chu for that. turning now to holiday retail, with two days left for last-minute shopping how are retailers getting sflds eddie is the co-owner and executive vice president of family-owned century 21. good to see you. >> you too. great to see you. happy holidays. >> the last weekend before christmas. >> yep. >> how did it look? >> it looked okay. it was according to our projections this year not gangbusters, not crazy. we predicted 3 to 4% increase over last year and that's pretty much what it's going to be. >> century 21 is discounts on designers. do you have to discount even further along with everybody else this year, promotions are the name of the game? >> promotions are the name of the game. for us every day we offer tremendous value so we don't have to go above and beyond what we normally do and we don't get into that rat race, that other retailers need to do, because that's what we do every single day every day is a great value. you can walk in any time and get gre great deals. >> 3 to 4% growth what is you're seeing this year. >> yes. >> what's different about the holiday shopping period this year? >> the differences are very small than they were last year. the hot sellers this year are pretty much what are like for kids, it would be anything "frozen" or superheroes, anything cashmere, they like luxury fabrics. >> you guys get in on the "frozen" merchandise. >> we do. we have toys, t-shirts, backpackses. not many know that but we do. we have full range department. those are the things that are hot this year. there's no must have item, though, this year that they're sometimes there are, that you have to get. >> mostly an urban retailer is that fair to say? >> pretty much. >> do you think gas prices coming down, something you're not going to feel as much as neighborhoods where they have to drive quite a bit. >> we do have branch stores where you to drive to. gas prices being lower is significant, but i feel like shoppers now are not spending their discretionary money on apparel, not as much as it was. they'll spend it on things like home improvement or health care or cars. things that we don't really sell. it's a fine line of where they will spend their money. >> will you go into the new year with more or less inventory, more or less sku snz. >> we are on top of our inventory. we're very careful of how much we buy, you know, from experience we know what we need and i think we'll be okay as far as inventory is concerned. >> you just opened a new store in philly, 95,000 square feet, which is a big expansion for you. >> yes. >> it's more of the same. i'm more interested in this concept space you've got. c 21 addition with her mess, chloe and cm. >> yeah. >> it's -- has macy's changed the name of the game in big cities like manhattan, because they've got this huge half a billion dollar investment in harold square to do the same thing. are you being forced into lux troy attract the -- luxury to attract the tourists like before. >> what we're doing with the addition, what's going on downtown here, there's so much retail explosion happening with the westfield and brookfield opening up these malls and every a-brand retailer is coming downtown and we need to keep up with that, but we have to do it in the dna of what century 21 is. we're offering things luxury environment and we're offering vintage currated accessories and handbags and watches and things like that in a very beautiful luxurious environment and that's what century 21 -- >> we should explain. these are not the pictures. it's much more boutiquboutique. you don't see it as a contradiction? >> i don't. i think it's in line with what he are as a company. >> a lot of people think century 21, they think loehmann's which was a business that had to bankrupt and liquidate it stosers. are you not feeling that pressure? >> we're not. we learned from every other offpriced retailer. we look at everybody and see what they had. >> what did they do wrong that you're not doing? >> there's so many reasons of what could have happened and for us, it's like opening up c it 21 addition. we think out of the box. we know that we have to evolve or we're going to die and we have to offer, you know, we have to be aware of our competition, we have to know what's happening on the market and we got to bring in new selections. >> the interesting thing is, of course, that barney's is going into the loehmann's site which speaks to what you're doing. >> 100%. >> and off fifth is coming downtown. is that going to be stiff competition? >> for me i welcome that competition. it makes us sharper, keeps us on our toes and we will not be going the path of all the other offbrand retailers. >> good luck with the remaining few days to shop. the co-owner and executive vice president of century 21. >> a pleasure. >> five minutes until "squawk alley" takes to the air. let's find out what's on deck with jon fortt. >> we're going to have the latest afall sis on the fallout from the sony hack. what will sony do on now that pressure is on from the president. former c fo on hacking and whats next in payment technology. apple watch around the corner. coming up early next year. do people want it even though they don't know that much about it? we'll find out coming up in "squawk alley." goodnight. goodnight. for those kept awake by pain... the night is anything but good. introducing new aleve pm. the first to combine a safe sleep aid. plus the 12 hour strength of aleve. for pain relief that can last until the am. now you can have a good night and a... good morning! new aleve pm. for a better am. welcome back. we're watching shares of caesars entertainment after it agreed to buy affiliate caesars acquisition in an $8.96 per share deal. it's a stock merger that will better position the $18.5 billion debt load of its largest unit which plans to file for a possible bankruptcy and the stock is currently trading you can see up by about 17%. for caesars acquisition trading up by about 7%. simon, sara, on the day's trade, back to you guys. >> thank you. >> looks like we are building on last week's rally with the dow up 90 points. all day today on cnbc we are looking at the next 25 years in the consumer industry. i will be doing stories throughout the day starting in "squawk alley" looking at the future of the consumer in food and whether 3d printed food is going to be a reality. >> in addition to your predictions. >> this is not predictions. this is cnbc's 25. we've done deep reporting on the future of food, beverages, who is the consumer in this country in 25 years. really interesting stuff. >> sara eisen, she's back and up for it. let's get to "squawk alley" with the team. >> all right. thanks. good morning. it is 8:00 a.m. at sony pictures in cull ver city, california, 11:00 a.m. on wall street. "squawk alley" is live. welcome to "squawk alley" for a monday. let's get to breaking news. eamon javers in washington. >> the justice department holding a news conference at the top of the hour and we're expecting what they're going to announce is a settlement with l alstom. what wires are reporting is that alstom is going to plead guilty and pay a fine if bribery charges with the united states.

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