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Becky will be back tomorrow. Traders returning from the holiday. Weekly jobless claims are set to hit the tape at 8 30 eastern time. Economist expect first time filing to decline. Many International Markets are closing to do boxing day holiday. Its boxing like the presence of boxing. Anyway, just in case you didnt know. U. S. Equity futures taking a look, setting itself up on this post christmas day. Nasdaq, up about 5 points, the s p 500 up 3 points. Also, a lot of obviously great news for investors to be happy about this Holiday Season. Data showing its been the best year for stocks since 2009. The average u. S. Equity mutual fund gained nearly 32 through december 20th. That edges oat the s ps 30 gains during the same period. Also, Small Company stocks eating their larger counterparts growth top value and returns of u. S. Funds. The day after christmas has become a huge opportunity for the neighs retailers. Some began sales online yesterday. Stores are looking to capitalize on people redeeming those gift cards. Targets Spokesman Says today is the single most popular day to redeem the retailers gift cards. You are you like Sugar Ray Leonard or something, you thought it was a day dedicated to years ago you saw boxers, boxing day. You know how there are certain words that you have these revelations about what they are sky scrapers was a word that i remember about 15 years ago it was actually scraping the sky. Up until then, it was a worse. Boxing day, for some reason, i thought look what they do for a living. They hit each other. They beat up their mind. They get terrible diseases early in life. But i dont think they deserve a full on more than any other sport. How about a day off from work . You know b the gift that keeps on giving, its not only the jelly of the month club, but the sweater of the month club. Sweater of the month club is something that is good year roend aus clark no, what what youre accused of today is there is a stain on the tie. Yeah. I had a sweater in my bag. We dont need to show the theres a stain on the tie. Its not that bad. How do you know its not a water stain or a drool stain and it drys up and identities its gone . I dont know. Theres also something else. We can talk about it later. But this is a big story. It is. They were buying presents on, like, monday. Are you blaming the victims . Yes. Buying on monday presents they expected to give people on wednesday . There are corporations in america just to find dloifr. I was a victim. Did you not get a gift to give or you did not give a gift . I had a plan to give a gift on tuesday to somebody before christmas. And i had ordered it on saturday. And it said expect delivery on monday. And continued to see on amazon expect delivery on monday until 8 00 p. M. On monday. So i waited and waited and waited. I went downstairs to figure out if it was really coming. And even at 9 00 or 10 00 at night fedex . U. P. S. This was not a family member. It was somebody we were going to see it was early. This isnt me you were going to because i got diddley from you. Is that why, because it was tuesday it didnt come. It did come on tuesday, but too late. You see . Where the hell is it . Lets go. Its your fault, not the delivery persons fault. The person already knows about it and was very sympathetic to my plight. Should we tell people what were talking about . No. I just think youre usually early, to in this case its appropriate that you were late. U. P. S. , right . Excuses all the time. This squad ward moment has been brought to you by joe kernen. U. P. S. Says it was overwhelmed. Did you use fedex or u. P. S. . It was amazon, and in this case it was u. P. S. I kind of feel for u. P. S. They were overwhelmed by high ive had a lot of weather, canceled this, this meant that some didnt arrive before christmas. The shipping company, there were patches of bad weather. Angry customers vented on social media, amazon. Com responded with an email to effective customers they were going to use drones, but theyre not ready yesterday. Meanwhile, a supervisor told nbc news that there were extraordinary delays that deliver giant. I think this will be one of those moments where we mark the shift to online, this is the year, Critical Mass and. Next year theyll add. But something happened this year that somehow the shift was monumental. You also realize that every retailer, their new bottle next at the shipper. It used to be that they are cared about the people who were just shipping to the stores. Or the instore service. And its not even your own people. That peoples very complicated. Theres basically two people, maybe three companies that you can use. There is the Postal Service. Right. Fed ix, u. P. S. , then maybe the Postal Service. Reuters hoping that those who attack markets, we had talk about this earlier. A Senior Executive who says a major bank could be able to crash did encryption code and make fraud ewe lint withdraws from peoples accounts. A spokesman for target says there is no evidence that pin data has been compromised. So that is kovconflicting. I didnt think the retailers were allowed or even able to use when you type in your four digit pin number, i thought that that never went in i thought that was never saved by the retailer. We do not have this whole story. Theres something very fish injury here. 40 Million People in that short amount of time shopped at target. Youre telling me more than 10 of the shopping population was affected but this and theres something that i dont know whats going on, but we do not have the whole thing. They should have an obama care signup. They should. They should have a desk at target. Thats actually, by the way, if walmart and target and a couple others had the desks that would be the administration relying on the private sector. Tease something they dont do. This latest extension did you see it yesterday . Basically theres an extra day. And i dont know, there was it was an open ended extension, wasnt it . They have dismantled so many parts of this mandate. Its crazy. You can claim hardship now, that the premiums are too high, so its a hardship and you dont have to buy it and youre exempted. Did you see that . You have to buy catastrophic, dont you . No. Theres always been an exemption, that if you had some kind of hardship, you the didnt have to buy the then they buy it for you, dont they, with a subsidy . You can be exempted through some kind of hardship. But the whole point was that it was mandatory. We were going to cover. Bingo. Happy holidays. Googles anyway, whose turn in it . Its turkey. To a number of international comments, turk kepss Prime Minister presenting a new list of cabinet members after many resign. Turkey currency is getting hammered over a last week or so. A huge corruption scandal. They arrested like 85 people about a week ago. That hammered the stock market by 5 in a sympathy day. A number of hedge funds got caught flatfooted. Now theres video on local television stations of 4. 5 million in cash found in the son of one of the ministers apartments. Its getting really, really messy. Turkey has a vulnerability to Financial Markets. Who wants a crisis . Be optimistic. Whats going on in china . Credit fears appear to be easing at least for now. Traders say they expected the central bank to refrain from more open market injections today after 8. 4 billion in the Financial System on tuesday. Speaking of china, the Chinese State News Agency Says edged down to 7. 6 and warnings it faces pressure to decline further. 7. 6 looks good. Yeah, it does. A duck dynasty marathon. These a e guys, to cash in on the controversy, they launched a double super marathon. Thats what id be doing. What is is it all about the all mighty dollar, my friend . Yes. I dont want to get into this. Im not going to get into this. If you were a tv programmer for the next two weeks, you should what was their initial high minded oh, youre saying theyre being hypocritical . Isnt of kancanceling the sh now theyre running a marathon. Hoe some holiday spirit. Anyway, if you thought u. S. Stocks were having a good year, which you check out the nikkei. Yeah, but its 40,000. Look at that. It has to double to get to where it was. You dont have a long enough chart up here. 56 . That is pretty good, though. Id like im hoping for that for 2014. Jan niece Prime Minister shinzo abe visiting a shrine honoring japans war shrine. Hes the first Prime Minister to visit the shrine while in office since 2006. Convicted war criminals are on the shrine and making light of the suffering endured by the korean and Chinese People and as a result, abe said its purpose was just to give thank for his first year in office, also to make a vow to avoid wars in which people would suffer and die. As opposed to the other kind of war. He did it on the 120th birthday of mao. Its an interesting the whole dynamic of any type of military intentions in japan following world war ii. Were not real happy when it looks likes theyre reasserting any type of military intentions. Which, you know, that tends to happen after so many and you wonder if at some point we might regret that as we see the rise of chinas military power. Its stuff. We need a very good secretary of state, one thats got a plan and we have one that has a plan. We have some other International News this morning. In libya, the Prime Minister there saying the tribal leaders will hold more stocks to seize, but he says the government will not negotiate with protesters blocking the importants. Brazils eike basista looking to reeling kwish ogx control. Equity gets something in brazil. This thing is going into debt renegotiations. Normally what would equity get . A big, fat zero. But in brazil, the equity holders get a vote. How much is he worth now . Its hard to know. What do you think . Maybe a hundred million, maybe. Maybe. I mean, it was worth 34 billion last year. These guys reached this deal until Christmas Eve. Oh, and theyre going to put money in. The debt holders are going to put money into the company because they have one old field left that theyre hoping might produce some oil. They hooked it up like two months ago. Theyve hit zero on every other single well. That areas of the world is far more geologically complex than anybody anticipated. I remember when you go to the milking conference in los angeles, he would be you remember he would go on 60 minutes and he was it. Charlie rose, blah, blah, blah. But he has such a bra vado about him, if you will the. I remember having lunch with him years ago at the four seasons restaurant and he really fwaf you the whole show, lee or four years ago. At his peek. But how is his dmoonder he gave like two lines to the twaet street journal. But he supposedly loved posing with the president of brazil and all his infrastructure projects. And lets check on the markets now. A great week so far and a great last week. That is unbelievable. Up another 75. No one is embracing it. We were sneaking this in at the end of the year. I wonder if we hit 30 on these volume indices. Is there any volume on this stuff . It doesnt matter. And there is always something to point to. Anyway, 75, lets look at the oil markets, 99. Were right around 100 for a while. The tenyear, i think this has really helped. Its more than it had been, but still it was 2. 87 . Eight basis points is all weve increased. Do you think theres anything magical about the 3 level, if we hit it . It depends on how you feel. It dpndz on whether you think qe was holing it down or whether the economy itself was so weak globally that that was the reason why it was low . It wasnt that different than where it would have been, anyway. And the dollar is confounding. Im looking for parity, but that might be a while. Im looking for a dollar. Thats about what its worth. Its closer to parity with the swiss franc. Which is important to you. But im not going to switzerland this summer. But hes going to davos in about three weeks. Thats right. How can i forget . I wont ill write off a dollar tip if i have time. I dont care what it costs in switzerland right now, unless im going to bring some chocolate home on my own dime. Hey, let the good times roll. No, i wouldnt do that. Kidding. Im very frugal with the company money, very. Lets look at gold, the markets today, up 2. 80. Above and below that 1,200 mark. A lot of people calling for a bottom now. The same people that said its going to 2,000 are now saying a thousand is possible. I dont know. Is this the first time in 13 years that gold has put some negative here . It really has and it was an ugly one. There was you know, it was a slam dunk, people thought to go above 2,000. It has been happening. Take a wrong turn at albuquerq e albuquerque. Hannah bar bare ra. I think of albuquerque, then it goes walter white. Theres a marathon coming up. I might have to participate in that. How do you see the fifth season . Netflix . No, youll have to pay per episode on i tune pes. You cant even buy the whole thing . You can buy the whole thing. I can spot you that for your christmas present. Oh, you already have it . No, i dont already have it. Actually, i probably do have it but i dont think i can send it to you. Why dont you buy it for me, then . I think i will. Other than parting all my tv wisdom im going to get my credit card out right here and i will do that. You still feel guilty about that money i gave you for reading that book, i paid him 1 to read a book and he learned nothing. You reads it . Yes. Have you read capitalism and freedom by Milton Freedman . That i skipped. Just tin trough, its brilliant. How many times pages . The intro is about ten pages. Pay him a dollar a page. Done. We have some Corporate News this morning. Were watching shares of blackberry today. The companys cofounder michael lazaridies, hes now trimmed his stake in the smartphonemaker to just below 5 . He sold 3. 5 million shares in recent days and is, you know, hes a little late on that, lets just say. Softbank reportedly in talks to acquire tmobile u. S. The Japanese Company said to be discussing funding with financial institutions, lots of reports over the weekend on this here in the United States, also in japan. Analysts are saying u. S. Regulators are seeing competition on the concern. He wants tmobile. He already owns sprint. Would talked for a long time about whether at t shoovsh allowed to buy tmobile. Right. I thought it what as bad idea. I know. This is the perfect on outcome. This would be good for everybody, good for consumers. Put some capital into this thing. And the network would be better. That was the point back then. If there was nobody else, it could be a spectrum of whether it would be you. Right. Were celebrating 930. I guess it is if you send a lot of data or whatever. You send a lot of data on your phone. It is not a cheap way to live. Really . You could spend easily 1,200 a year on your phone. Its a lot of money. But think of everything that has been replaced by yoen phone. And that does not get factored into cpi. Thats true. Youre right. Again, thats a big i dont see too often and i dont really know about. I should send more. Im very proou frfrugal with that list was like this. That was about a sixmonth list. I have done my expenses for six months. Oh, god. I have, too. I have like a parking thing when i go in. When i do go in, it is to meet with a guest host or something. Yours ive never seen that list was like i mean, you what do you total on a year for an expense account . Im going to think about that and well talk about that during a break. Do you have a New York Times expense account . If i write a column related to somebody, i would expect that, sure. So that was only half of your expenses. You pay for anything at all . Of course not, no. If i read a book, i get paid to read the book, clearly. Hes got it wired, doesnt he . And yet right. Politics dont seem aligned. Dont push my politics. They dont connect too many dots on that side of the aisle about hypocrisy. Coming up, why popular knee surgery may be unnecessary for many patients. Details of an interesting new study next. First, the National Weather forecast from the weather channels alex wallace. Tracking snow. Were seeing that moving through the great lakes, and that will move through the northeast, as well. But not looking for huge totals. This is what we think through tomorrow morning. Generally, there will be 1 to 3 inches, but maybe pockets of 3 to 5 in pockets of maine as well as new york state getting closer to the great lakes. What will happen is we head through the weekend. That cold has been that has been blacked in, a warmer air mass. But that will set the stage ford next storm system. And tracks the moisture up into the east coast with rainmaker weekend on tap. Welcome back to squawk box. Its now time for the executive edge. A new stid study in the new england journal of medicine reporting a popular surgical procedure worked no better that can than fake operations in helping people with one common type of knee problem. Thousands of people may be undergoing unnecessary surgery. The surgery dealt with people dealing with a torn meniscus. Arthroscopic surgery is performed at an estimated cost of 4 billion. They fake the operation on half the people. So they did these fake incisions, but didnt repair the menisc meniscus. A year later, they said they felt like just like the people who did have their meniscus operated on. I want to understand how the test worked. If they didnt do it to you, wouldnt you be so upset or not . To find out you had been lied to . Yeah. Its pretty upsetting. There must be something im sure the people that paid for no, they probably knew they were in a test. Tell tell you youre going to get the drug of placebo, we cant tell you which. So maybe they were informed that sorkin, you thought we were going to start with the nsa. Did you see snowed. . I did. He looks 20. Thats the one thing i was stuck by. Is secondly, i thought he was dramatic. I thought he was reading a teleprompter. He said just know that any child born today, that any thought that he ever has will not be there will never be another moment of privacy in this persons life. And then i read today, theyve got so much data, they cant even interpret it. I dont get the feeling that the nsa knows anything about me or is breathing down maybe im just naive, i guess, that your twins will never have a private moment in their entire life again . I think they will, but if we dent but youre concerned . No, im not that concerned because i dont think theres that much to worry about. I think he wants to end up like being, i dont know, like a on the cover of Time Magazine . Yeah. That was pretty close. But almost as a Freedom Fighter or Something Like that, like a patriot. But you highlighted i better story here is the nsa getting all this data. They dont have the ability to scrape it and trillions of pieces of data. I covered crime for ten years, right . And you had people listening to hours and hours and hours of phone taps. Its too much sometimes. You cant deal with it all. And ive got to think its the same. Take some nodoz. In terms of all the other people that they have been supporting this network of people and views. Anyway, were going to talk more about that nsa story, coming up. Were going to get 2014 market predictions from tony when we come back. But first, ceo wishes for the new year. I believe my economic wish for 2014 would be for Less Government intervention need and interference. Thats allowing the free market system to, again, lead us through the economy and take this country to some great places. I think that would be my number one wish. The ocean gets warmer. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. announcer scottrade knows our and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. [ male announcer ] what kind of energy is so abundant, it can help provide the power for all this . Natural gas. More than ever before, americas electricity is generated by it. Exxonmobil uses advanced visualization and Drilling Technologies to produce natural gas. Powering our lives. While reducing emissions by up to 60 . Energy lives here. Welcome back. Joining us on set is tony creszenzi. Thank for coming back. You do come back once in a while, right . I am bycoastal. Do you feel weird out there . Sometimes you miss it . Yes. Im 100 italian. And theres no good pizza there. I say the best fee squaw i can find is dominos. And its great pizza, but ed asner was explain to go will ferrell, dont take the gum up, its not free candy. And number two, rays pizza. Theres 18 different original rays. Thats the only thing that he told him. Staten island has the highest concentration of pizza places in the country. Per capita . Thats where i stay when it when i come in. Because of the pizza. Do you fit out there . I dont know. Girls love a sovereign accent, right . The tenyear i say has been orderly. Is it part of the reason the sfok market has been able to do well because it hasnt freaked out. There hasnt been a new high put in in yields. Possible, but not probable, there will be a new yield put in by the First Quarter of next year. But you cant expect a meaningfully high level. Let me give you a stat that helps to explain it. The tenyear yield relative to the fed funds rate, the policy rate, its never yielded in 50 years more than four points over that level. So that would make a top for 20144 for the ten year. But thats an old way of looking at this fourpoint rule. Thats where it only reaches sometimes, where it trades, too. Its given you a sense of when the policy rate will go up, probably the end of 2015. Investors when they put the tenyear yield, 4 points over the funds rate, me never had that Forward Guidance or trillions of bonds held by the fed. That should help contain yields below. Now its a 2. 5 , to 3 rage. Probably shipping there right now. The gears are moving that way given the economys momentum. About 3. 25 possibly. Possibly. Simply because the economy has this momentum that people are banking on. The fed is banking on a 3 economy. Pimco is projecting a 2. 5 economy. But were thinking it will be faster. Its a little better. Its a new new normal. Yeah. I call it for race, a new normalization for rates. Rates when they normalize go up quickly. Youre in a universe as i try and look around the corner. I understand that. Go jets. Here is the thing, though. Here is the thing. In the past, i have said on an absolute basis, these yields are so low that no one should be sweating them out. But when it moves quickly, you cant help that people have big poe positions. If it happens orderly, dont they have enough time to prepare . Yes. And now they have prepared. It would start in may. Ben bernanke seemed to suggest that the fed may not buy bonds forever and things change. There are so many sa statistics to point out. And people are ready for this. You know that people have been selling mutual funds, households. But let me give you one example. Its not technical. In the euro dollar market, this is a market where investors go to invest in libor. In may, speculators, noncommercial traders as theyre called in chicago, they were long about 700,000 contracts. They were betting on low Interest Rates forever. Now theyre shot, 900,000 contracts. 1. 6 Million Contract shift. The tenyear, one last example, the futures, near record short. Risk parity traders, reits, individual investors, theyve all been selling. They did it for a short time. So you would expect it to be more orderly. This rate right now where were heading is not that different than an unmanipulated rate based on fundamental. As its occurring now. So the tenyear is where markets might put it . But considering one thing, inflation rate was released last week. The one where fed follows, its at 1. 1 , the record low since 1960s, 0. 9 in 2010. So 1. 1. Three, two points over inflation, pretty normal. And we had low rates, in fact, the rate was below inflation. This is an important concept joe is highlighting. Everybody talks about the curve being so manipulated and what are real rates . And now were getting the sense of theyre exactly kind of where they longer rates and normalized. The fed is losing control. Its buying in its bond buying, its qe3, about 80 to 90 of the long bond. Its telling markets its not going to bsh we have some markets already, the fed losing its grip on longer rates. And well control them until a rate hike is near somewhere in 2015, probably the latter half given what the fed told us. Leave us your phone number because you do come back here occasionally. Always here. And we like pimco, but its good to have someone who is not an outright communist and talk about the liberal and the new york mayor. The more the bigger theyre from a new yorker. And the richer ones, the worst they get. The richest ones, the ones worth billions ive been earning my own money since a paper boy at 10 years old. But you cant convert. Youve tried. Did macaulay cut his harriet . Remember, he left pimco. But he left to go up on a mountain top and we learned whether or not hes cut his hair sometimes in here. Invite him on and lets see. I think he did cut it. I dont think so. Oh, he did . A little shorter. Good to see you, tony. Coming up, from luxury hybrid toes space travel, were going to talk about revolutionizing the world as we know it. Phil lebeau profiles one of the worlds most important people in business. Finance, coming up next on squawk box. Sir. Ill get it together i promise. Heeheehee. Jimmy ronny, how happy are folks who save hundreds of dollars switching to geico . Ronny id say happier than the pillsbury doughboy on his way to a baking convention. Get happy. Get geico. Fifteen minutes could save you fifteen percent or more. Welcome back to squawk box. Were wrapping up 2013 with a look at the years most influential people. Phil lebeau brings us this view of elon musk. I want to be in the middle of a battle. Hes challenging conventional wisdom, showing the world cars can go electric. He has brought to the american consciousness a thought that, in fact, electric vehicles can exist. Not only exist, but sell in big numbers. More than 20,000 this year, attracting buyers with unique styling and the allure of almost 300 miles on a single charge. In some respects, tesla is the equivalent of the moon shot, where really he and tesla are pushing the paradigms of the industry in terms of how they develop the vehicle. Interestingingly enough, the industry is learning some lessons. Tesla has earned a profit by charging a premium. Tesla is building a recharging network coast to coast. And critics said tesla is a onetrick pony, but musk has lined up orders for the model crossover Utility Vehicle coming next year. Whether or not hes going to be successful within i dont know. I personally believe hes going to run out of money. I personally believe he needs more product. Now musk is changing how cars are sold. For decades, automakers have gone through dealers, but tel tesla is cussing them out, Opening Stores in malls. Auto dealers have been fighting musk saying hes a threat to their companies. And in some cases, theyve won, blocking tesla from selling directly to customers in certain states. But just a few years after many considered musk a zant story, musk is making many of those people think twice. Coming up, two entrepreneurs disrupting the world of retail and getting consumers a good deal in the process. The cofounders of huckster are going to join us on the set with their stone when squawk box returns. Sounds like a really good deal. Jake from state farm at three in the morning. Who is this . Its jake from state farm. What are you wearing, jake from state farm . [ jake ] uh. Khakis. She sounds hideous. Well shes a guy, so. [ male announcer ] another reason more people stay with state farm. Get to a better state. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. To talg or huck all their favorite gift ideas in one place. Thanks, guys, for coming back. Thanks for having us. So here is the question. Theres some stuff thats, like, really on sale now. I mean really on sale. Some of the great discounts weve seen all season, actually. For example . Give us some examples. Okay. Beats headphones, 50 off at best buy right now. Is anybody making money on that . The margins are slimmer. This is not the time to you were buying them because they were dr. Dres beats, right . I know them well. I have two pairs. So if i wanted the headphones, i would say im following these headphones. Exactly. Tell us the color youre interested in and we would let you know the moment the price dropped. To what . Is there a level at which i need to indicate im only willing to pay . You could indicate a level or well tell you anytime the price fluctuates. Well have a screen behind us here. We have this 35 off the jawbone. I wear it on my wrist, but thats a mini speaker, right . Those are cute, they come in red, white or black. Is that 30 off or 30 . 30 off. So its about 150. A lot of classic items are deeply discounted. Is that in the Holiday Season . No, either on Christmas Eve or christmas day. What do we expect in terms of product over the next couple of days, its going to be heavily discounted. Is there more stuff, do you think . Can you predict whats going to go down . Yeah. A lot of times we can. We do see the trends yearoveryear. With the hunter boots, all the Department Stores are really slashing prices with apparel and accessories. Are you predicting that . Or you got an algorithm thats scraping thats going to predict that for you . We can predict it based off last years data. Computer intel . Yeah. But we have worked in retail our whole lives. We do know the cadence of sales, as well. Their whole lives. Our professional career. In terms of retail discounting, thats been the story of the season in terms of margin compression. How does it relate where youre seeing on the app this year compared to last year thus far . We saw the discount start earlier this year. So last year, the wednesday before thanksgiving, we saw a ton of discounts across most online retailers. This year, it happened as early as monday or tuesday. And then they just keep getting deeper and deeper. So weve been trained to wait. Why buy anything . Its a classic deflationary spiral. If somethings trending and you want it under the tree, you have to pull the trigger. If its a wardrobe essential, staple like denim or just a vneck sweater, you can definitely wait because the prices will continue to drop. Okay. People say 30 is just youve got to get 30 to buy it. 30 off . Yeah. Thats the deal. But then afterwards it goes to 50 . J. Crews been 30 off for the past month. Yeah. Which is kind of incredible. Theyre 40 off sale right now. Right now . Yeah. The effective discount is more like that 50 . I got an email. Start celebrating christmas like on new years or something. Right. Just in your own i could start looking at discounts. We like to call it treat yourself month. You bought all your gifts for everyone else and now its time to splurge on the great deals happening for yourself. Well, happy holidays. Thank you, guys, for coming in. Did you get anything good for christmas, by the way . Its better to give than to receive, i think. Adults dont get much anymore. Did you . I got some sweaters. You get 12 a year anyway. Not for theyre not sweaters you can wear on tv. More like weekend with jeans. For what you wore on friday, i cant imagine anything you cant wear on tv. Thats true. The guy in my building said i saw you wearing pajamas on tv. Coming up, shipping issues at u. P. S. And fedex. Its a huge day for retail returns today. Gift card redemptions and big sales. Were going to talk retail winners and losers coming up. Bny mellon combines Investment Management investment servicing, giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Its the morning after christmas. Youre late. But Holiday Shopping season is far from done. Retailers are slashing prices and counting on a flood of shoppers today. Turmoil in turkey. A corruption investigation threatening the leadership of a key partner from the west and the Global Markets are taking notice. Predictions for 2014, only four trading days left in the year. Well look ahead for whats in store for your investments in the new one. The second hour of squawk box begins right now. You ever watch telemundo in the morning . Theyre always dancing. Have i ever watched telemundo in the morning . Yes, i have. I watch all the different nbc you cant go 15 minutes without dancing. Yeah. Okay. All right. Good morning and welcome to squawk box on cnbc. Im Michelle Carusocabrera along with joe kernan and Andrew Ross Sorkin. Our guest host is ed kian. Lets show you what the futures are doing this morning. They suggest a higher open. Dow jones industrial average would open higher by 51 points, the nasdaq higher by more than six. And remember, the dow and s p closed at a high on tuesday, wednesday tuesday. There are more these are your morning headlines. U. S. Stocks coming off record close tuesday. S p 500 and the dow transports. And a gain for the dow today would be the sixth straight. Something it hasnt done since back in march. Christmas is over, but the crowds are not. Today is the day many retailers offer post holiday discounts in whats already been a highly promotional season. Also the most popular day to redeem gift cards. Many consumers are also spending the day wondering what happened to their Christmas Gifts because both u. P. S. And fedex reported delivery delays. Bad weather in parts of the nation as well as extremely high volume, much more than they expected. Amazon is offering gift cards to customers as a result who were affected by the delays. Well have a live report from atlanta in about 15 minutes. In global news, turkeys Prime Minister presenting a new list of cabinet ministers after some resigned amid a corruption inquiry. The turkish currency at this point has been volatile. But as you can see there, its up today in china. Traders say they expected the central bank to refrain from open Market Operations today after it injected 4. 8 billion into the Financial System on tuesday. And a little bit of Corporate News for you this morning, soft bank which owns sprint reportedly now in talks to acquire tmobile, the Japanese Company is said to be discussing funding for a deal like that with financial institutions. Analysts say u. S. Regulators, though, are seen raising competition concerns over the deal. And youll recall at t ran into trouble when it tried to buy tmobile, as well. But perhaps this one will get through. Also, though, some interesting issues because there would be a japanese majority owner in this case. Among the newspaper headlines capturing our attention this morning, a story in the wall street journal profiling the creator of some of the computer code used by the nsa to snoop on internet traffic around the world. And get this, the former employee now says that the spy agency is drowning in useless data and struggling to make sense of it. He says this is harming the nsas ability to conduct legitimate surveillance. Too much data. This is like a stream of data. This is like stop the presses. How many terrorists are there . There are not that many. Its all useless. What did you expect . You didnt think it was going to be useless . Its all useless except that one time, when theres a money transfer, theres this, theres that that leads to something. But 99. 9999 of whats going on, nothing thats what i said. Nothing im doing is interesting. Nothing that any of you and are you suggesting they shouldnt be collecting . No, im its not surprising to me its not interesting because most people arent doing something thats interesting. Or they cant tell what theyve got. And you end up not achieving the mission you set out to do because youve got too much clouding the picture. Why dont you look at it this way. Do you know how many people we have screened . Dont you ever wonder that going in waiting in that line at the airport. Dont you wonder. Because of this, look at the misspent just useless stuff. How many people have we checked for, what do you think 99. 999999 theres nothing interesting going on. The juice they check, you know, the bottles, the cream thats in your how much of that was worthwhile time spent . Its all worthwhile because youve got to do it, but all the bits of data. None of it meant anything. Theyre all negatives. All negatives. So now im going to make it i dont know if this will be controversial to say. You know this world were living in now. Profiling. Because the reason were collecting so much useless data. The reason were making people go through these airports the way we do because we refuse to actually profile. They do in sort of weve made it more expensive because its not based on the color the background its not about the color of your skin and where youre from, necessarily, but those all of these points will get put into a computer and somebodys going to say we have reverse profiling. If you are a frequent business traveler, right . You can do all of these things and you meet a certain profile of person who travels sufficient amount, they do your background check and everything else. There was a piece on a guy from israel in the way its done in israel. I dont think they worry about profiling a lot. They know a lot about the people are traveling. And they might, you know, they check is that profiling . Youre in the middle east and look, if we were doing what israel was doing, there would be. If you think theres an outcry now about the nsa, yes, there would be protests in the streets. Its just that, stop the presses, most of the datas useless. Thats my only point. No kidding. But the larger point is, are you missing the ability to actually capture someone because youve got too much . Well, when its that much. But whats the answer to that . I dont know. I think i i want to know whos calling yemen. He hinted on it. You profile, right . Very specific people. Not profiling. And everybody else. You cant look at a wire correspondence and tell whether its, you know you cant be i dont think you can offend anyone looking at a wire. The problem, though, the idea. Do you pick the wire based on the persons last name . And the problem with profiling is one day there will be a, you know a white girl from texas. A white girl from texas who does something and then whatever your preconceived notions or i know exactly people are going to say the whole things right. 2013s been a great year for the stock market. Is it possible to see a better year in 2014 . Our guest host is ed keon. I cant find it in the notes for today, but did you find the one thing we learned is fundamentals matter and dont trade against fundamenta fundamentals . Well, i think did you say that . Yeah, i think all the guests weve had on this year talk about corrections based on it was happening in washington or some other extraneous events that werent related to the fundamentals of earnings and the economy and the valuation of the stock market. And the people who traded persuasibased on what they thought what was happening in washington would have a major impact on the economy turned out that was a bad trade. But when i read that to focus on fundamentals, i thought if you focused on fundamentals, you could have been out because the one fundamental you could focus on was qe3 and ben bernanke. And is that a fundamental . Well, i thought all year we were exaggerating the impact of qe on the markets. And i still feel that way. In other words, as qe goes off. And in fact, youve seen the last several weeks is tapering is real. What did the market do . Did it collapse . Rallied. Continued to go up. And i think made the point earlier that real Interest Rates are actually pretty much in line with historical averages. Yeah, i think rates will go up further this year. Not only because of qe coming off but the economys getting stronger. I think were actually going back to normal the new normal is going to be the old normal. Well have north of growth of 3 this year. And already the equity market is anticipating that and thats one of the reasons we had a good year this year. Are you in next year, what do we do . Everybodys saying 10 . Im pretty much the consensus guy on this one. Anything good for us, besides maybe 10 up next year . Either well do 30 to surprise people or be down 20 or something. Whats it going to be . I think earnings are going to grow at about 12 next year. Whats the market going to do . I think its reasonable to expect the equity markets to go up about 12 with it. Everybody does that ever happen where people all say 10 , 12 and turns out to be 10 , 12 . Usually the market tries to confound the most people. It sure did that this year. And its not all about qe and the Federal Reserve. Earnings have gone from 49. 50 in 2008, estimates next year around 122 and change. Thats a big pickup in earnings. Its not just about liquidity. I do think the economys going to normalize here. I think youre going to trade toward 3 on gdp, maybe a little bit above that. I think Interest Rates are going to rise. The last time you ended a secular bull market. Interest rates went from 2 to 4. 5 . And the equity market as measured by the dow went from 174 to roughly 730. Going up to very historical levels. It could still bounce around could be below 5 . And then you get 3 growth. We couldnt we do 30 this year in the markets . Is that out of the question, jeff . Not out of the question. But backtoback 30 up years is pretty rare. I will say in the 90s three times, right . 94, 95, 96. All 30 . Yeah. That was moving into a bubble. And i think were getting slower but simple gdp growth. I think its sustainable and i think thats the sweet spot for the stock market. And i would continue to tell people they are profoundly underinvested in u. S. Equities. Whereabouts in the market . You just buy the s p or do you like certain areas more . I think technology and health care. I think growth is going to outperform value in the year ahead. And i think growth tends to be clustered in i. T. And health care. Both of them are trading 1 to 2 standard deviations below their normal historic valuation levels. And tech, actually, has an roe of 22 versus the s ps. Whos your guy at Raymond James they rank thats done well in recent years in individual stocks . Do you have a guy or know the stocks hes picking or that the firm is recommending . You got stocks for me . Well, david, David Henwood is the one that puts together the analysts best picks up roughly 44 last year. Thats got a track record of why are you on . Do you know his picks for this year . Or can you can you ask him to come on . I can. You can . I can. You can get it off the Raymond James website, analysts best picks. All right. You dont to that. In fact, hes moved beyond stocks. And we realized that last time. Youre an allocator now, right . Yes. We look at Asset Classes around the world. Because you used to be the stock picker in the United States, didnt you . Well, back in the old days. Its harder to be wrong doing it this way. This is a better gig. Well, if you look some people come on here and talk about how much alpha they can generate. And its extremely important. But in the long run, you get about a 10 return from beta. If youve been long on the market the last 80 years or so, youve gotten 10 , whereas 5 alphas very good. If you can get the right asset class at the right time and ride them. Theres a chart i like to use now that shows the market on a log scale. And we try to spend a lot of time thinking about those corrections, right because the market goes up about 10 on average. Every once in a while you lose half your money, which is discouraging for people. If you can focus on trying to do a good job during those downturn it is and ride it most of the rest of the time, you get the wind at your back. Being optimistic about the market has been a good call for a long time and i think its going to be a good call Going Forward. I was going to say one last thing to jeff. 44 , thats like 50 . Thats outperforming the market by 50 , isnt it . Yeah. And the analysts best picks has done that for a long period of time. All of the new york firms with the fancy pedigrees. St. Petersburg, florida. All right. Michelles old stomping grounds. Were going to have that guy on maybe well find out whats buying in 14. See you later. Coming up, social media lighting up with consumer complaints against u. P. S. And fedex. But first, as we head to break, check out our countdown clock to christmas. Yes, we have 353 days 363 days, of course. Buy your online gifts now and theyll make it on time. Before you settle for another ordinary mattress, isnt it time you discovered the sleep number bed . The only bed clinically proven to relieve back pain and improve sleep quality. And right now, its our lowest prices of the season. Save 300 to 800 on our newest innovations. Plus, for one week only, special financing until january 2016. Only at a sleep number store, where queen mattresses start at just 699. 99. Sleep number. Comfort individualized. Welcome back to squawk box. U. P. S. And fedex drawing fire after christmas delivery problems. Gabe gutierrez joins us from atlanta. Gabe . Reporter fedex and u. P. S. Trucks trying to deliver those late packages and try to calm angry customers. Now, both companies are blaming bad weather and increased demand due to soaring online sales. But that explanation isnt sitting well with a lot of customers. Many of them sounded off yesterday on social media. One of them calling u. P. S. Standing for undelivered parcel shipment. Many saying it ruined christmas for them and their families. Other customers are throwing their support behind u. P. S. And fedex saying the employees for those companies are working very hard in the days leading up to christmas and they dont blame the companies at all. But this is also taking a bit of a hit on online retailers. Amazon. Com is saying that it processed all orders on time and basically pointing the finger at u. P. S. Also, amazon is compensating customers, some customers with 20 gift cards and refunds on shipping charges. As for u. P. S. And fedex, both are apologizing for this delay. Fedex is calling the increased demand due to those soaring online sales. Theyre calling that an extraordinary event. And u. P. S. Is basically saying they did not forecast the online sales and all of this exceeded the capacity of their network. But, again, those trucks are back out again this morning and theyre trying to calm some of these angry customers. Guys, back to you. That was okay. That was, you know, you didnt have to be on cable to say that. But i came up with some things you definitely couldnt. With those letters. You can come up with some really nasty stuff. Undelivered package thats nice. Not bad. But a lot of people were mad. Oh, yeah. And you would be mad when it came time to give someone important and its like, i swear i got you something. Your motherinlaws gift doesnt arrive. Come on, thats bad. It happened to you, but on the gift you ordered for me, right . Still late. Should we reveal . You embodied the story. You bought something online. I got penelope to buy me something online. Close enough. Speaking of family things, its hard to make a december 26th birthday really yeah. Thats a tough one. So its her birthday. Blake. Happy birthday, blake. And thats when she first came on. But shes, yeah, shes i cant believe it, 14. What . Thats her . Thats her. Shes 5 shes growing up more than that. Do we have more recent . Thats pretty close. Thats about two years ago. Oh, my. You let her go out like that . That was at a little yeah, thats her last birthday. I think thats from last year. Happy birthday. And we got how do you separate the gifts from what did you get her . A bunch of stuff. A lot of apple stuff. Apples tim cook is doing well today . So is sony. Just in general. In the sony. Thats you know thats so retro. We have two ps3s. We only had one before. And a ps where are you on xbox . Microsofts not taking your money . That didnt happen. Not sure why. Anyway, happy birthday. A retail analyst rings up this years winners and losers coming up next. So you can see like right here i can just. You know, check my policy here, add a car, ah speak to customer service, check on a claim. You know, all with the ah, tap of my geico app. Oh, thats so cool. Well, i would disagree with you but, ah, that would make me a liar. No dude, youre on the jumbotron whoa. Ah. Yeah, pretty much walked into that one. Geico anywhere anytime. Just a tap away on the geico app. Its been that way since the day you met. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than 4 hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. Its time to tally up its time to tally up the holiday winners and losers in retail. Joining us is suntrust retail analyst. Are they telling us essentially this is the year where Online Shopping just holy smokes took over . Absolutely. I mean, its been coming, building up as the years have been progressing. And its much easier for people to do the Online Shopping, especially with the tightened holiday period we had this year. People didnt want to head to the mall when everything was available for them online. And all the deals we saw starting early on black friday, even walmart, which opened very, very early. You were able to get the same deals online that you were able to get at the stores. Why even bother going in dealing with the crowds . The majority was free. The majority of retailers have figured out how to price in the free shipping. Free returns is something we havent seen across the board yet. But for the Holiday Season, we were seeing extra discounts on it. And how unhappy, though. As a result of people not getting their packages when they were supposed to get their packages, do you think it changes the mindset of the consumer next year or changes the mindset of fedex and u. P. S. I think it changes the mindset of a certain consumer. I think the older customer wasnt necessarily always shopping online. And now with this, theyre the ones spending a lot for the Holiday Season and all of a sudden their kids dont have gifts underneath the tree. Next year, it may actually help the pure bricks and mortar retailers. For the younger generation, i dont think its that big of a deal. When you talk to retailers or get information from retailers, at what point do you learn the online sales the ultimate question here. Are the online sales so good that theyre going to offset all the negative stuff we heard about the bricks and mortars this Holiday Season . How do you find that out . Sure. Well, the majority of our retailers no longer provide the monthly comp store sales. Its more about the quarterly information, which we wont be getting until february. Some do provide updates early in january. And theres also a big industry event. Icr. And ahead of that, a lot of companies will provide preannouncements if need be. And within that, they will give us the online sales numbers. Who won this season, do you think . Sure. When i think about this season, i think about apparel in general as we know was not very robust. That was not what people were looking for underneath the tree. It was more about the electronics, the highend jewelry, luxury, et cetera. Of the apparel retailers, i think the missys in general were winners in general. The color denim was a big item last year, a lot of women didnt want it. So i think there was a replenishment cycle going on. When we think about that, ann taylor was a winner. Ann taylor and loft stores had the right product for their customer. A lot of planned promotions going on that resinated for them. Thanks so much for coming in. We really appreciate it. Thank you. Happy holidays. Happy new year. Coming up, executive changes in 2014. Who is going to be running microsoft . Could it be alan mullaly. Tdd 18886486021 there are Trading Opportunities tdd 18886486021 just waiting to be found. Tdd 18886486021 at schwab, were here to help tdd 18886486021 bring what inspires you tdd 18886486021 out there. In here. Tdd 18886486021 out there, tdd 18886486021 there are stocks on the move. Tdd 18886486021 in here, streetsmart edge has tdd 18886486021 chart pattern recognition tdd 18886486021 which shows you which ones are bullish or bearish. Tdd 18886486021 now, earn 300 commissionfree online trades. Tdd 18886486021 call 18886486021 tdd 18886486021 or go to schwab. Com trading to learn how. Tdd 18886486021 our trading specialists can tdd 18886486021 help you set up your platform. 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Economists are looking for 344,000 new claims for last week. We had a weird jump last week to 379,000. Elsewhere, a judge has ruled against bp and yet another case involving that oil spill. Bp wanted businesses to provide specific proof that financial losses were suffered during that time and were directly related to the spill. And then the price of a first class postage stamp, we just never catch up with what it costs. But we keep its weird. Itll go 3 cents to 49 cents as of january 26th. This particular increase was an unusual one. It was improved as a temporary measure. The hike was only good for two years to help them recover from losses its already had during the recession that began in 2008. Big losses year after year after year after year. Huge losses, but gets more less and less important, right, with all this other electronic stuff. But you still, you know, christmas cards, stuff like that. They should be doing phenomenally well. Look at what happened with fedex and u. P. S. , right . You knew theres a resurgence in shipping and the Postal Service cant capture it, im shocked. I know how to press your buttons. But the reason they cant capture it is because they have costs that u. P. S. And fedex dont. Like what . Theyre having to ship the last mile in all markets that are inefficient. There are places that u. P. S. And fedex will not deliver packages to. What about pension costs . And pension costs. But im just suggesting its a little bit more complicated. Thats and im not sailing i would actually try to privatize the Postal Service if there was a way to do it. I dont know how, but i think we should. Oh, man. You cant get it. You have to be like the client. That would make sense. I was surprised when he said it. Were talking about a conversation last hour. People watch. Fine. Weve got to have the guy come on. Well have the guy come on and get his but he better not come on and not tell us. Well get the list. You could get the list. Ill work on the list. You could easily get that list. In the meantime, were going to talk about one of the biggest leadership questions. Call the nsa. Theyll know. They cant find it because they have too many lists. They give you every stock. Weve got to get to the next story, which is one of the Big Questions heading into 2014, who is microsofts next ceo. Our next guest is a Corporate Culture expert who works with fortune 100 companies to strengthen leadership strategies. Joining us now to talk about, john gordon, the ceo of leadership consulting. You know, his name is in the title. It all works. John, thank you for joining us this morning. Good morning. Good morning. So if alan mullaly is the name and you are on the board or advising the board. Would you say this is the right choice or the wrong choice . Well, there are only a few people who could run microsoft right now. And alan is one of those people. You have to understand what your culture stands for if youre microsoft. And once you know what you stand for, every decision you make is easy. So will they pick a c. O. That redefines the culture of fit the culture that exists . And thats the question, john. Is this a company you want to have the culture redefined . And can you change the culture if the de facto ceo or ruler of the Company Still is bill gates . You cannot change the culture as it is right now. Thats why, you know, if you want to go with a bold new strategy, a bold new vision, it would be very difficult for microsoft to do that. You have to bring someone in that fits the culture. Because you have bill gates, 100,000 employees. You have this big machine that will be very hard to turn and navigate in a new fast direction right now. When you say right now as if this is something thats changeable. And the other question is, does it have to change. Well, itll depend on the next few years. This is a very crucial time for microsoft. Its going to be very difficult to change, very fast now. Over the longterm, yes, you can change. I believe microsoft is going to continue with their strategy of incremental improvement with their product and services continuing down the road of a little innovation, new products. But nothing bold and nothing crazy. Heres a question. Youve advised lots of corporate ceos. Also coaches, im thinking mike smith of the falcons and others. Can you go to somebody like a bill gates who is clearly the founder of a company who has a huge ground swell of support and has a legacy and be able to coach them to change . If you believe thats where the change has to come from . When i worked with the Atlanta Falcons and mike smith took over, we talked about what he needed to do to change the culture of the falcons organization. He was willing to change. So, if the leader is willing to change, it could happen. It all really depends on the leader being willing if they are coachable. If theyre coachable, we can make that change. Do you ever have a situation where a board hires you and says, look, boy does this ceo not want to change. I havent had that yet. But that would be a fun challenge. When you think about whats going on in Corporate America right now in terms of jc penney, other companies that need real turn arounds, who do you look to and say they got it right and they got it wrong . Well, theres a lot of southwest airlines. You know, when they brought in a new ceo, gary fit their culture. He was perfect for southwest, he plays the guitar at company meetings, the kind of guy with a funloving attitude but a great leader. Hes someone doing it right. Southwest is doing it right. Dell, i spoke to dell years ago and i saw their culture really going downhill. I knew they were doing the wrong things years ago before they started to crash. Where do you put jc penney in that . Weve been talking a lot about retail. Right. Im really concerned about jc penney and their ability to turn things around with the big challenges they had in the past. I understand microsoft being very cautious about their ceo because you dont want to have another jc penney. Then i look at a company like yahoo and think of marissa mayer. Are you surprised by the success of that . Im not surprised. I think shes done a fabulous job. When you change the culture, you have to rally everyone in that company to change. Shes done a great job of that. A lot of it is vision. Casting the vision and being able to move that entire company towards that vision. And she did a great job with that. What does a training coach really do . If i hire you and say, listen, im having issues at work, this is delivery this is not completely hypothetical. Im available tomorrow. Do you have a friend . Do you know somebody that came to you . I have a friend who is looking for the guy who needs the e. D. Medicine, same guy, right . I dont know that guy, but what is it that you do exactly . Well, i do things on three levels. One, we work at the cultural level helping leaders create a great culture. Then i work with leaders to be the kind of Leader People want to follow. And then we work with leaders to help build strong teams that perform at a higher level. A lot of it is on positive leadership, getting people to lead with optimism and hope and faith and being able to move that company in the right direction. How do you do that . And at the local level, how do you get people to be engaged . And to be focused and excited about their work every day . Sort of part psychiatrist and part tony robbins . Its an interesting challenge. Its leadership, its culture, its part motivation knowing that, you know, motivation doesnt last. People are driven by purpose. And when theyre driven by purpose, theyre motivated. And how much does it cost to use your services . Well, it all depends on what ill be doing. Whether its speaking or ill give you the number. Well talk later. And is it expensable . Yes. Business expense. You know, we have talent coaches here. We do . Yeah. I deal with it for three hours. Its working, too. Its amazing how engaging and funny and comfortable. Its unbelievable. Well, youre im complimenting myself. I know. Hey, john, happy holidays, this morning. Thank you so much. Our prediction series continues with the Financial Sector. Three bold calls for banks in the new year. Thats next. When you miss squawk box, you fall behind on Global Business news. When you fall behind on Global Business news, you make bad investment decisions. When you make bad investment decisions, you lose all your money. When you lose all your money, you attempt to hatch an illegal ponzi scheme. When you hatch an illegal ponzi scheme, you end up with this guy as your cell mate. Nighty night, boys, dont do anything i wouldnt do. Watch squawk box. 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Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. I need you. I feel so alone. But youre not alone. I knew youd come. Like i could stay away. You know i cant do this without you. Youll never have to. Youre always there for me. Shh ill get you a rental car. I could also use an umbrella. Fall in love with progressives claims service. Welcome back to squawk box. Checking the futures right now. The day after christmas. Take a look put it in your stocking right here. Dow looks like it would open up about 58 points higher, nasdaq up 7 1 2 points. How will the Financial Sector fair in 2014 . Kayla tausche joins us with her predictions in the Financial Sector for 2014. First, though, lets see how she did with her 2013 predictions. First, jpmorgans bench will suit up. This proved correct. We saw chairman and Ceo Jamie Dimon realigning his executive ranks. Next, kayla predicted investment banks would change face. This one she got wrong. While theyve become far less profitable than they were, their Parent Companies havent parted ways with them just yet. And finally, she predicted citi would say sayonara to the bad bank. The unit has shrunk considerably and now stands at 6 of citis total assets. Not bad. Will she have better luck in 2014 . Lets have a look at kaylas predictions for next year. Reporter frustrated by fees and red tape, customers will start flocking to less Traditional Bank accounts. Google wallet Just Launched a debit card, Small Businesses have been signing up for the new square wallet, and efriendly customers have been switching to online simple. Reaching for yield, banks for years have been underwriting startingly high levels of junk bonds for low credit companies. As the fed starts to taper, yields will rise, therell be a rush out of risky Asset Classes, bond prices will fall and bankruptcies will increase as refinancing gets harder to come by. Banks wont take losses on the deals yet, but the alarm bills will start to ring. Jpmorgan chase wont be the only bank to face fraud charges. Eric holder has pledged more highprofile cases to come and nearly a dozen other banks are being investigated across the country. Penance for the financial crisis, far from over. Look for another wave of cases to pop up after the new year and keep a close eye on bank of america, citigroup, and goldman sachs. Three bell weather firms that have disclosed ongoing mortgage probes. For cnbc, im kayla tausche. And tune in throughout the day today and tomorrow, as well, for more predictions and on the web at predictions. Cnbc. Com. Coming up in the next hour, you might want to think twice before snacking on some airlines. But like i always say, anything in moderation. Youre not going to eat 20 snacks. How often do you fly . Anyway, were going to reveal the best and Worst Airlines ranked by the nutritional value of the food offering. Up next on squawk box, dont start your day without knowing the names that will make you money. Joe has your list of stocks to watch right after the break. To help secure retirements and protect financial futures. To help communities recover and rebuild. For Companies Going from garage to global. On the ground, in the air, even into space. We repaid every dollar america lent us. And gave america back a profit. Were here to keep our promises. To help you realize a better tomorrow. From the families of aig, happy holidays. vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Just a couple stocks to watch this morning. Blackberrys cofounder has trimmed his stake in smartphone to just below 5 . He sold 3. 5 million shares in recent days and shares of tmobile getting a boost. Soft bank is in talks to acquire the mobile carrier. The Japanese Company said to be discussing funding for a deal with financial institutions. Analysts say that u. S. Regulators are seen raising some competition concerns over that deal. What was whatd they buy that other merger . That horrible clear wire mess . Yeah. It became a mess. Didnt soft bank . Yeah. Finally. Lets get back to our guest host. I think i saw something about emerging markets. Now, most people think for diversification that its always a good idea over there. You dont thats not necessarily the time . Its not a great time, why not . We have been a little cautious. Each one, the storys different. Weve been a little cautious in the last year. Youre resisting it . Not quite there yet. I like to see a little bit better. Is it all based on china . Not just china. Chinas a big weight of the emerging market index. Its very hard to get emerging markets unless you get china. You can just say emerging markets and it was this blanket statement. Youve got to get a lot more picky, right . With this whole issue, some countries got a current account deficit. Its going to get hammered versus one that doesnt. Well, we use a lot of quantitative techniques. And both for our colleagues who do pick the stocks as well as in our Asset Allocation approach. And were still a little cautious in latin emerging markets. Because the numbers, frankly, dont support. The valuations arent that cheap. And the momentum of the earnings isnt all that good. I wouldnt be at all surprised in 2014 if i come in and say we have gone to an overweight position. But i think its still a little premature. And we havent invited you back in 2014 i assumed its very presumptuous. Are all developed markets sort of development markets . When you say stocks, you mean europe, too . We have been moving money towards europe. We still have a very big position in the United States. Early in the year, i thought the United States was basically almost a nobrainer. We had a huge position there. And we have trimmed a little bit of that and moved toward europe. Basically because of valuation. You get a lot more stock for your money after a 30 runup. Thats your only point. Because of the runup. Theres nothing wrong with the u. S. Its because of the runup its not quite the slam dunk. Thats right. Theres nothing i have a great deal of confidence in the u. S. Economy. Im way above consensus. I think were going to start to print some 5 quarters next year. Really . I think were going to see much, much stronger growth over the next couple of years than most people believe. Youre finally starting to see the pentup demand for autos and housing and other things starting to be realized. Youre starting to see the availability of credit improve enough. Higher Interest Rates make that easier. With rates higher, its more likely that banks will make credit available because its more profitable to do so. All that money from qe thats sitting in the Federal Reserve bank because the banks have not loaned it out, eventually that will find its way into the economy. Im very optimistic about the u. S. Economy. I think the u. S. Stock market is a very solid place to have your money going into the year. But my job, i have to pick not just where youre going to make a good amount of money but where youll make the best money on a riskadjusted basis. And i think you might be getting a little bit better value in some of the nonu. S. Markets, especially in europe. In europe. And we are in a Global Business environment. And so when you have companies that are competing for business all around the world, as long as the Global Economy is starting to recover, you want to be able to get the best bang for your buck in terms of getting the goodquality companies and sectors at a reasonable value. Do you like recommend any money in Frontier Markets . We have not really got into Frontier Markets yet. So scary theres no liquidity. Home runs the data isnt really all that good yet. But one of the interesting things about meaning you cant believe the numbers sometimes the corporate governance. One thing people dont realize is sometimes when the data isnt all that good is when the opportunities are the greatest for quantitative techniques. But you do risk adjusting, right . Willing to White Knuckle it sometimes. For example, my colleagues have created a small cap emerging markets product which has been delivering a substantial amount of alpha so far based on what work youve done so far. There are opportunities to use quantitative techniques even when the datas not the same very highquality again in the United States. In some ways its greater. Because it means you have to work harder to make sense of data that isnt as high quality. Do we have the financial crisis of our lifetime . I think so. Not ours how about andrew . We had the financial crisis in andrews lifetime . He can live another 80 years theoretically. The Financial Markets and Financial Companies go through this from time to time. They have for hundreds of years. So were done with it . I think its going to be a while now because we i dont know. I worry about this whole Civilized Society thing, i worry about. Of course, i watch too much walking dead. You know. Post apocalypse, just buy some water, at least. Right. Buy some water. At least buy some water. Were going to talk to ed in a little bit. Coming up, lessons from the bull rally of 2013, were going to talk about the business and Economic Trends that could drive trading in the new year. Plus, a holiday wrapup for retail. John feldmans going to join us to talk about his five big winners of the shopping season. I wanna spread a little love this year [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. [ male announcer ] this store knows how to handle a saturday crowd. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. A Holiday Retail wrapup. Which companies and which retailers fell short. You stink. I think youre going to have a good christmas, all right. You smell like beef and cheese. You dont smell like santa. Okay. Investing in the new year, lessons from the bull market of 2013 and the trends that could drive trading in the year ahead. Holiday travelers, listen up. Step aside, sir. New airline food ratings are out. Well tell you which companies are the best and worst at feeding you. Plus, find out which airlines snacks are making you fat. The third hour of squawk box starts right now. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernan along with Andrew Ross Sorkin and Michelle Carusocabrera. Becky quick is off today. Shell be back tomorrow. Just for the day. And next week like i said, shes got it wrapped. Our next guest, more from ed, still to come, first, though, a roundup of this mornings top headlines from andrew. There you go. The big story weve been talking about this story all morning. U. P. S. Says it was overwhelmed by a high volume of holiday packages. And this meant some didnt arrive before christmas. Shipping company also blamed recent patches of bad weather. Angry customers venting all over social media. Amazon. Com responded with an email to affected customers offering shipping refunds and 20 Gift Certificates to compensate. Meantime, supervisor at fedex Customer Support line told nbc news, they were in his words extraordinary delays at the shipping giant. And his team had apologizing to customers. And in a statement that came out this morning, fedex says it is projected to handle 275 million shipments between thanksgiving and christmas. Fedex ground, for example, during the busiest time of the year. But 1 is a lot in the first time you read it, i was thinking, its u. P. S. , a lot of what happened, man. All these packages. Is it christmas or something . Yeah, you know, christmas. Are you guys ready . Apparently not. Were learning this year no, im kidding. Snuck up on u. P. S. Wow, all these people are sending stuff. No, people like you are finally ordering online. Older people are ordering online. You didnt have to go there. You could say he was ordering online. Younger people. I said you and older people. I didnt lump the two of them together. My gift didnt arrive on tuesday in time for christmas, but not in time for you to give it. My gift. Can i call amazon and get a 20 Gift Certificate . Yeah, they should have given it to you already. It was a total publicity stunt. One of the great publicity stunts of all time. Hes still laughing about that. We may not have it fast enough. Are you saying 60 minutes was suckered . Which time . And theres mr. Bezos, laughing all the way to the bank is what hes doing. There it is. We have some other Corporate News you can laugh about this one or not, but report through in talks to acquire tmobile. Analysts say u. S. Regulators are seen raising competition concerns over that deal. And, of course, soft bank owns sprint, this would effectively become a merger of those two entities. In global news, were watching the situation in turkey. The countrys Prime Minister there presenting a new list of cabinet members after a number of ministers resign amid the corruption inquiry. The turkish currency there falling against the dollar over that i dont know if it was called a saga, soap opera, sort of a mess. We could see the fall of the government there. This is a big deal. Started with the arrest of 85 people. Its hard to know whether this is bad people beating up other bad people, regardless to say, its led to huge instability in that market. Equity futures right now suggesting well get a positive open. The day after christmas has historically been good for stocks. Since 1945, the s p 500 has risen 79 of the time that trading was open on december 26th. Joe . Wow. Just in a good mood, i guess. A lot of them arent working. We are less than a week away from new years and markets continue to hit new highs in the countdown to 2014. How long will the rally continue . Joining us now Joshua Fineman and steven sachs head of Capital Markets at pro shares. Josh, let me begin with you. Ph. D. From brown, youre the man. Johns hopkins, right . Undergrad . But its in economics. Brown gives out gifts . Yeah. Only way i was able to get one. I thought you were going to say, oh, i should have checked that. Too late now. Thats awful. You think heres how i want to approach. You think the economys going to continue to do well in 2014 and 2015. Better, actually. Continue to do better. What scares me is we just decided we wont have another big financial crisis probably in our lifetime. We dont know for sure. But this last one, its been five years. Weve been recovering. Yeah. Can we assume we go seven years, ten years without even a recession . Are we just clear sailing because it was so deep . Not necessarily. I dont think thats the reason. But the recovery hasnt been so great. So we still have a lot of ground to make up. That doesnt guarantee were not going to have a recession, of course. But i think the imbalances that typically precede a recession, they dont seem to be there. The economy owes us this . Youre not owed anything. Thats for sure. So its definitely there somewhere waiting to be no, its not definite. But im saying, the telltale signs, the excesses that build up before. We still have plenty of slack in the economy. Youre just starting to get credit expansion. Were nowhere near the levels of danger you normally see. I guess thats the one Silver Lining and not having had a great recovery is kind of low and slow. But it hasnt getting close to boiling over. 14 and 15, do we see four prints . Ed said we might see five. Well, if you look historically, you have had periods where you get a year or two where you have had that kind of spread. Usually its a stretch and its like a sprain. Even if we were going to get three prints on a consistent basis we havent seen so far in this recovery. That was one quarter. Lets not run with that. Right . Thats right. But im talking about getting on a sustained basis, you know, where we average that over a couple of years. We havent seen that in this recovery. So that would be something to celebrate. All right, steve, so you heard now you know what kind of economy were going to have. You can tell us what to do with the stock market, then. No, absolutely. And i think myself and most of the investing community would absolutely take consistent three handles on the gdp growth. I think we occasionally see those bumps around 4, 4 1 2. But ultimately one of the things we learned, nothing wrong with 2. 5 to 3 gdp growth. If we can continue that into 2015, you know, i think a lot of the things that have been working over the past couple of years will continue to work. I think it gets a little bit tougher to be a global asset allocator. I think the relative outperformance versus others probably that gap probably closes a little bit. Meaning youre going to have to look around the globe into different Asset Classes to continue to get that big relative outperformance. But ultimately at the end of the day, you know, u. S. Equities from a fundamental perspective still look very, very attractive. Were still very constructive on u. S. Equities particularly relative to that 3 to 3 1 2 gdp growth we think we get over the course of this year. How much of this will be the multiples . Will they stay the same or continue . How much is just earnings per share . And will there be Revenue Growth . I think we see a little bit of that. At the end of the day, we continue to see p e expansion. When you look at the picture, particularly u. S. Corporations, a lot of good positive things in place, particularly from a Balance Sheet perspective, a cash flow perspective. Revenue growth is probably the biggest question mark. But if we can continue to get that 3 to 3. 5 gdp number and global gdp number consistently print in those levels, i think that Revenue Growth or that top line growth number takes care of itself. The fact of the matter is over the last five years, you know, Global Corporations have become very, very adept at managing Balance Sheets, managing income statements and ultimately managing margins. So theyre in a very, very good position to take advantage of even slow to low top line Revenue Growth. I think thats really one of the themes that plays out over the course of this year. Hows business with you are . How would you rank Public Participation right now . And can you tell from your business, steve . I wait for the market to get really popular again. And i dont really think were there yet. A whole lot of people that may never be in a stock market again. But sooner or later, theres got to be excitement about these new highs. And its not that exciting yet, is it . No, its not. If we look at our data in particular and keep in mind our core client base really are investment professionals, institutional as well as Financial Advisers that are managing money, you know, for folks. But even the adviser community. While theres clearly been good participation over the last couple of years, i think youre right, joe, at the end of the day the question is the average american investor, you know, back in this market . I dont think so. We dont get that sense. Theres been a lot of performance chasing the back half of this year. And thats one of the things thats a catalyst for the first half of next year, is that retail in this market to a great degree . We dont think so. We also think its probably a good thing. We dont have those excesses in the pipeline, dont have those built in prices at this point. Thats that continued fuel for the fire. Bottom line is, no, we dont think the sort of average investor has participated to a great degree, particularly this year. Do you think about the fed anymore . Do you think about the political environment . Washington anymore . All of this is going to happen. Its on its sort of going to happen either way, right . Yeah, i think so. One of the reasons im a little more optimistic about the next year or two, i think washington will be a little bit out of the way. This budget deal is a good sign of that. The debt ceiling issue, theres still wrinkles for sure. I think for the first time in a while, weve got a chance of washington being more out of the way. The fed i think is still going to be very accommodative for a long time. Theres a lot of slack in the economy, inflations low. Yeah, theyll probably be continuing to slow down the asset purchases, but they told us. Theyre going to be low for long and i think we can take them at their word for that. Do you think that the people that you think of that have been left behind and we have a when Economic Times arent gr t great, we forget that just having everything get better usually helps. It does help. It does help. We see the income disparity and inequality and see people that arent doing well that are left behind. Are there other things we need to do, too . Yeah, i think there are. But growth will help. Its not just in the u. S. Its global. But when the economy is weak, it gets worse. You know, in the late 90s when the economy was red hot, labor market was real tight, the inequality trend, you know, slowed. So if we could get a couple of years of stronger growth, thats not going to solve all the structural problems associated with inequality and what have you, but it would help. Unfortunately, some of the best laid plans of central planners to deal with income equality can actually hurt the growth that wouldve helped thats true. Its very hard balance. Forgive them for they know not what they do. You dont want to throw the baby out with the bath water. You dont want to ruin the system that gives you the high, average standard of living. Its a very complicated issue. And like i said, its not just the u. S. This is a global phenomenon. Its more and more previously planned economies move toward a market economy. Its a tradeoff you accept for growth. But the question is, if it goes too far, you start to get, you know, political and social blowback. Latin america in the 70s and 80s. And you can get strong growth. In the 1950s and 60s in the United States. The growing widening inequality has been a relatively new phenomenon. Whats more common, i think, over time. You think we shouldve grown even more . We had inhibitions in the economy it was the best decade ever for stocks. Right. When you look at i think we wouldve grown faster, sure. And the inequality wouldve broader, and thats okay . When we talk about the 50s and 60s and the 70s, too. When you think of auto workers. What do we know now . We know the auto workers were borrowing from future workers. But all that salary they made was not true. All those benefits. Right. Were extremely costly and were taking from the future. They werent sustainable. So its you have to ask yourself. A rising stock market is really, really good for people that have stocks. That have stocks. Is it better if the people that have it right. Even people in washington are happy when the stock they might not admit it. Well, also if the stock market this year is in part because of anticipation that the economys going to be doing better. Unfortunately, the people that have assets are the ones that are going to benefit higher asset prices. Doesnt mean you dont want assets to rise. Of course not. If you dont want assets to rise because i dont think anyone wants to go back to 2008 and 2009. The stock market got hammered. And income inequality narrowed a little bit during the financial crisis. Thatcher gave a speech 20 years ago and they were booing her and we played it where she said you people want just to bring down the and thats how you want to solve income equality. I dont think anybody, you know, when they really think about it. Weve got to run, the foo fighters are playing us out. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back to squawk box. Diet detective has released the analyst of snack and meal ratings ranking airlines on the quality and nutritional value of their food. So take a listen to this because if you eat on the planes, you gain weight. It happens to be that way. Dont take the nuts. Its good for you. They dont even give you nuts anymore. Yes, they do. Sometimes pretzels. Anyway. Topping the list is Virgin America and air canada. Both received 4 1 2 stars out of 5 getting high quality marks for freshness and nutritional value. Virgin america also praised for the light menu and on demand ordering. Not so bad there which means you can eat when you want, not just when they come around with that cart. At the bottom of the list is allegiant air. The airline received a score of 1 1 2 stars getting knocked off for lack of healthy options. Spirit airlines with 1 1 2 stars. Overall, diet detective notes onboard meals are getting healthier. The average number of calories per food item. You had said how could you get fat on an airplane . 360. How often do you fly . From 388 last year. This is a question no one was asking. You go to the airport, you eat in advance of the flight at least i do. And i try to think im being good. And you get on the airplane and maybe they have more food and you can buy that box of junk and you eat that. Get off the plane, get to the hotel and you might eat that. And its like you think youre on vacation. Thats not the airline. Thats your inability to control yourself before, during and after the flight. Thats the problem with most of these things about calories. Its you. Not them, its you. Dont you go to the united club . Everythings free in there. You do. No, i do. Can i say cheese and hummus. The food at most of those places with the exception of Virgin Atlantics national lounge is awful. Im just saying. Virgin lounges are the best. You get your haircut, get a massage. Thats a question people are asking. Where can you get a haircut, okay. Its your cheat sheet for some of the worlds most chaotic places and impacts on Global Markets in the new year. 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When michelle is not filling in on squawk box, shes the chief international correspondent. Shes going to highlight some of the potential hot spots for next year. And you are single. This is a great this was a great gig for you. Is that where your investing hot spot all right. Financial crisis. But theres some overlap between them. Youve been to italy, youve been to greece. Yeah. Istanbul. Youve had some crises. Were not going to call this wish list. You will be going to these places next year. It could be. Puerto rico, has to borrow money by july of this year. Did you pick these . I picked these myself. Im hoping puerto ricos crisis really big in the winter. Puerto ricos got to borrow some money and havent been able to access the markets at a price they want. Theyve been doing major reforms there including teacher pension reform. They did that on Christmas Eve. And well see if they can return to markets. Theres huge predictions theyre going to have big losses on their sovereign debt. Well see. Brazil, weve got to watch what happens with the worlds cup and whether or not those stadiums survive because they have been really rushed in construction. And then theres an election coming up after that, which is, i think, the outcome with the world cup is definitely going to impact that. If we move to the right and look at northern africa. Libya, theyre still trying to get control of the ports where the oil comes out of. Weve seen sharp productions in the amount of oil coming out of libya because the war lords arent allowing it to be shipped out. And some weeks, increases, some weeks it doesnt. Egypt, everybodys going to be focused on constitutional reform. Theyve got wicked subsidies for bread and for fuel. Wicked. Love that word. Very new england. Theyve got to do something about. There is no alternative. Iran, thats obvious. Were going to find out if the sanctions are lifted and whether or not they can return to the world oil markets. And if the sanctions arent lifted, they have potential currency crisis, as well, which would be startling to watch. Russia, weve got to watch what happens with the olympics. Ill be in sochi for the month of february. In china, theres so much to talk about china. I think most importantly, well want to see, are they finally going to liberalize Interest Rates, it causes so many terrible distortions when it comes to real estate and people trying to invest in crappy products no other way to describe it. I think were interested is in is it going to work . Coming up, minutes away from a closely watched weekly jobless claims. Well be right back. Before you settle for another ordinary mattress, isnt it time you discovered the sleep number bed . The only bed clinically proven to relieve back pain and improve sleep quality. And right now, its our lowest prices of the season. Save 300 to 800 on our newest innovations. Plus, for one week only, special financing until january 2016. Only at a sleep number store, where queen mattresses start at just 699. 99. Sleep number. Comfort individualized. We are back squawk box. Seconds away from jobless claims. Rick, what are the numbers . All right. 338,000. So thats a drop from 380,000. So 42,000 big drop. I think michelle nailed it earlier. Its been pretty volatile, its been mostly higher. Were working out some of these seasonally adjusted kinks in some of these numbers. And it isnt only this number. Theres a lot of numbers that have been they arent working as well as they used to. Heres some of the notable features of the marketplace. 299 and change, were coming close to 3 . If you look at the yield curve, i think its more interesting maybe to look at the 1. 75 in a fiveyear note. Were getting close to a 1. 05 handle in the dollar yen. We continue to see the japanese currency. The stock market celebrated as one of the biggest net changes of the year. But a lot like the nasdaq. Maybe the supreme number in 1989 is too far up to contemplate 39,000 considering 16. Plus, we want to consider the final issue. And that is preopening dow futures up 44, s ps up almost three. And all the newspaper stories of late saying the world now believes the Central Banks have cured the problems. I definitely think we should put that in stone and pull it out at some date unnamed in the future. Back to you. Yeah, i was thinking that, rick. It was like 10 billion started to taper and were almost not talking about it that much. Like the tapers already over. Are we hopefully well get back to sweating out every single comment between now and the next meeting about whether they go to 65 billion. Thatll be the next thing we probably do, dont you think . Whether they hit that schedule they came up with . You know, i guess the only way i could think about it is, theres a lot of stories about how young people are living with their parents longer. Well, i guess if young people had the same principals on their stay as the feds taper does in the marketplace, most likely theyll be celebrating their 75th anniversary living at their parents at some point. Still be at home. Lets get reaction to the jobs data. Global chief strategist at citi private bank. Could you ever see yellen putting it on hold or going up . Yeah, we do. When she was the president of the San Francisco bank, she voted for rate hikes. We do think going back up. I think things have to go very bad in the world. We have to have an outlook probably for a new american downturn. Full blown downturn. They would raise qe again. Dont have any of the its still slack is eds point. Five years was a pretty long recovery in the past, but no ones thinking theres anything on the horizon of the slowdown. Well, i do think its true that we had, you know, housing sector go down deep into the early part of what were counting as this recovery. Weve had relatively slack employment growth. We still were driving around 11yearold trucks and cars on the United States roads. Housing activity is still, you know, weak relatively speaking and going up. Just hasnt been that much of a recovery yet. We might want to call the first couple years of this a timeout and where were going from here, the real recovery. You think you can do that . We think itll be over in september of 2014. Theres a lot of good news aside from qe. Were thinking 30 above 2007 levels for american companies. Share prices are about 15 higher in the 2007 peak. You know, that mattered, too, the fed didnt just print earnings. You know. So i think Going Forward the lack of qe, its going to be harder to generate big upward surprises for the u. S. Now that were expecting more. I think itll be harder to get Monetary Policy surprises in the right direction the market likes. But we think theres been a lot of fundamental behind this market rally. We dont see any problems well, there are plenty of problem spots. The world cant run a current account surplus. The problem with the surplus economies for many years, you know, the u. S. This is one of the few expansions weve seen since 1980 where we havent blown up the trade deficit. Europe is running a really substantial trade surplus. And thats got to come out of somewhere. I think were looking at the u. S. As a leading indicator of europe in a sense that, you know, Bank Recapitalization has been slow, fiscal tightening is winding down there. The fact that they have led for a long time made sense, but we think theres more improvement in europe. Probably little bit stronger surprise and acceleration in europe from lower base. Well, does that make sense, ed . Yeah. I think the United States is back to the world leader when it comes to economic activity. China played that role for most of the last decade or so. Now thats shifted back to the United States. In sheer size, maybe, but not in the actual number. Do the math. But if you take the growth we have relative to our size of the economy, thats going to be a bigger factor. We get 3 on our economy thats still more than 7. 5 and much smaller chinese economy even though its number two. I think our growth next year will be much stronger than 3 . I think well see the u. S. Be the horse that pulls the cart next year. And i think there is a lot of upside potential in europe, which has not been recognized the same way it has in the United States. And eventually thatll fall into emerging markets. Even though draghis been so slow at the wheel according to some . Well, hes be slow in a way thats different. He has different political dimensions in europe. I realize that. He hasnt been able to do as much checking on that. Im sorry, i leaned on my phone. Siri. Its off. It says its off. Sorry. So, stephen, what is this, generally seeing lower liquidity options offering small and medium term. Being realistic about the fact that the u. S. Equity market has tripled off the lows. You could get a bbb corporate at 9 yield and now getting it at 4 . Youre looking over a couple of years, a standard liquid equities and fixed income returns are going to be lower than where they were at the crisis point. Where if you take a look at some of the alternatives, things like private equity, some real estate investments, returns have fallen too, but they havent fallen as much. Its very, very easy to find investors for 4 type of return opportunity in fixed income markets as long as you can get out any time of the day. One of the tradeoffs, and theres no free lunch here. You have to trade a little bit in liquidity, have a little bit more flexible time frame as when you get in and out of investments and generate higher returns. Take on more risk, basically. Well, take on timing risk in terms of exit points. One of the things you found in 2008 and 2009, the things you counted on being liquid werent liquid. There will be points in the future where you dont want to get out of markets at any particular point. Under which president . That was way back under, you know, the second bush. Second bush, bush ii. You dont have it says acquire credits toward ph. D. Yes. On his way. Still on his way. Were checking everyones credentials. Because you dont think brown offers a ph. D. I was teasing the guy. Guy picked the wrong ivy league school. He changed to dartmouth. Thank you, we appreciate it. Weve never caught anybody, have we on that . David faber caught a ceo once. On the air . I cant remember if he did i think there was a ceo. Yeah. It was a contact lens company. People tried to catch me. They did and they thought they had me because they were spelling my name kernan. You know. You know. I know all too well. Thank you for coming in this morning. Coming up were crunching numbers. Were going to talk to a retail analy analyst. Were back in a moment. vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Anbe a name and not a number . Tor scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back to squawk box. Christmas is officially behind us. Time to tally up and see which retailers won the holiday traffic wars. Joining me now from new york is joe feldman, the assistant director of research. Good morning to you. Hi, how are you . We teased right before the commercial break that you still love and i dont want to put words in your mouth best buy. Yes. One of the questions i have is looking at the stock, which has been on such a tare. And even though i know the business has come back from what people thought was the dead, how much growth is really left . And how much is built into this stock . Well, thats true, expectations are high. As you look into next year, theres so much opportunity for them to improve their website to enhance and leverage the data mining they have. Theyve never really do that. And the Management Team has that ability in the background. The cfo was at William Sonoma for 12, 13 years, she knows how to mine the data and make it more important part of the business. And then theyre competitive on price now with amazon. And i think that theres a way to drive people in the store. And you see this Holiday Season, you know, people didnt get their orders on time from some places. And you think thats going to have a huge impact come next Holiday Season . I think people are going to think twice. I do think there are some that will think twice about i can run down to the store and get it or i can just do it online. Or is it good news people may not wait until the last minute. Maybe the lastminute shopping gets done. No . I dont know. Game stop, you also like gamestop. Another surprise from you because ive always believed at some point this game stuff would go online and youd order it on itunes type of thing in the future. How much of a change is this . How cyclical as opposed to secular . That is definitely a big part. And thats really what got investors more in love with the stock this year to really drive it higher. I do think thats a big part of it. But over the past three years, probably, id say, gamestop has made big strides in terms of the digital effort. Why doesnt why doesnt this just turn into sort of the blockbuster netflix issue . Well, i think that the vast majority of people still need the device and want the device to play the games. Even if they are going to download, they still want it. If you watch, the games themselves are currency for people. They walk into the store and youll see kids on a saturday with three games trading in for a brand new one. Isnt longterm all this stuff be downloadable . The games will be streamed . Yes. Therefore, where does that leave gamestop . Well, the good thing is the store leases are very short. And i think as i mentioned, theyre positioning themselves to be at the center of that whole, you know, transition. They can get out of their Stores Within three years effectively. So you also like garmin, another one that makes no sense to me because ive got an iphone now. It has google maps and apple maps. Why who is going to have a garmin or even use the garmin software in the future . Yeah. Im not sure im the one that does like garmin that much. I thought you did, im sorry. You know what, my apologies. This is the gap, not garmin, its the gap. I was looking and i i like the way you did that, though. You got me nervous. You like garmin. Well, you like the gap and therefore by the way, i could ask the same question. What is wrong with you . Poor garmin, nobody likes them, obviously. Now i feel bad for them. Thats right. Well, no, gap. Gap is one that dana has been a big fan of for a while. I think theyve done a lot to reinvigorate their brands. Pricing is much better, stores look a lot better. The product is right. The merchandising has been spoton. And we think theyve been one of the winners this Holiday Season. And is that something you think will continue . Or is that because of the deep discounting . Have they got their act together . A little of both. I do think the merchandise does look a lot better. Its a cleaner look, a little brighter. People tend to like color and i think thats worked. Do you know what they represent anymore . When i think about the gap or Banana Republic. The Old Navy Brand i feel like i understand the Old Navy Brand still. I dont think i understand what the gap is supposed to be. Well, i i do think that the core gap brand is still that classic american, you know, clothes that you wear. You go casual, some people do wear it to work. I think Banana Republic certainly fits that more casual wear to Work Environment better. But, no, i think theres still relevance and meaning. And especially as some of the other teen retailers have not done, as well. I think the gaps actually, you know, filled in some of that void. Youve given us a lot of nice things to think about. Is there anybody that you think any companies you should stay away from . Stay away from . I do think im a little nervous about target right now, to be perfectly honest. Because of this credit card breach . No, because of the breach. Thats like people saying theyre worried about the 787, boeing because of the battery problem. They get over these things, right . Absolutely. And i think itll be short lived. But in the near term, you kind of wonder, how much did it make people think twice about walking into the store before they bought this past weekend . Or are they going to go back and pick up some of the deals the post christmas deals now . I think people might worry a little bit. And especially if they do get impacted by it, youll hear about it. Happy holidays. Thank you. Happy holidays. Appreciate it. Coming up, phil lebeau goes under the hood of the Automobile Industry and tells you what to watch for next year. Tomorrow on squawk box, bring in the jobs, bring in the funk. Bob funk, former Kansas City Fed chairman and current ceo of express employment professionals. Hell join us to talk jobs, the economy and more. Thats tomorrow on squawk box starting at 6 00 a. M. Eastern. Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. A new way to bank. A better way to save. Ally bank. Your money needs an ally. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. Welcome back. This years been strong for the all the owe sector, up 27 year to date. Heres phil lebeau for a look under the hood for 2014. Reporter 2014 will be the year the battle over luxury cars heats up. Mercedes is putting pressure on its rivals. In 2014, automakers and all owe dealers will throw a little more cash on the hood in order to make sure sales stay strong. Why . There will be 66 brand new or completely redesigned models rolling into show rooms next year. Thats a record number. And in order to make sure the other 234 existing models still sell, the auto dealers will have to throw a little more cash to sweeten the deal. As for the tesla model s, sales are expected to grow. One thing is for sure, with ceo elon musk taking a crosscountry trip in teslas, the model s will be a hot topic for much of 2014. Make sure to tune in throughout the day today and tomorrow for more predictions. On the web you can see all the predictions. Lessons from the bull market of 2013. Guest host ed keon says avoid distractions, stick to fundamentals. Well talk to him more that coming up after this break. And keep watching for winners and losers in Online Shopping and a read on the consumer. Announcer ready or not, the stock of the day is coming up. Youre watching squawk box on cnbc, first in business worldwide. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Itdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Stock of the day, tmobile, softbank is reportedly in talks to acquire the carrier. Sprint and tmobile would make the best. But then would they be viable . I think theyd be much more viable than they are now. At t and verizon basically own the market. But tmobile and sprint have done some pretty interesting things in the past year and a half. Theyve been forced to be much more competitive on price. I would argue that actually blocking that original deal might have been the right thing to do. Lets get back to our guest host ed keon for the last word. I was just looking at usa today. The president is going to have a state of the union address. You know, im still hoping hed come out and say, you know what, i know ive given the speech on climate change, ive given the speech on gun control. I wish hed come out and give the speech on corporate taxation or territoriality what if he did come and say lets make this a priority, corporate taxation. I think there is room for compromise on corporate taxes. The actual effective rate is so far below the statuary rate. So everybody elses is lower, too. If people go abroad and build factories abroad, of course their effective rate is lower but they shouldnt be building there. If theres any part of the tax codes that both sides could agree on for the same of fairness as well as efficiency, thats the place we can find some compromise. But i think in general, though, this last year, 2013, we spent too much time thinking about Public Policy issues from an investment perspective and all that drama we had in washington, meanwhile we had a 30 gain in the equity market. What if they became tail winds if theyre obstacles and we had the gains, ill take them. Its like beating your head on the wall. It feels good when you stop it. Were going to muddle through anything. What if we actually had some things that would grease the wheel . That would be great. In other words, we already have some restraints on it. I dont count on it. But i think also the strength of the country doesnt come out of washington. It comes from the systems we have, the history we have i remember sitting on this set with a woman who was an entrepreneur from texas one day. Somebody asked her, well, what about how is your business growing under the different president s that youve seen . She said it really doesnt matter all that much. Because its texas. It started in texas but its more of a national, regional company. She said what matters is do we satisfy our customers, do we have the right technology . I think thats been the key to growth and will continuing to the key to both in the the United States. Thank you, ed. Stresquawk on the street bs right now. Good thursday morning. I hope you had a wonderful holiday. Welcome to squawk on the street. Im Carl Quintanilla with simon hobbs and david faber tod, crams off today. Ups is apologizing for missing delivery deadlines on some christmas packages

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