Transcripts For CNBC Squawk On The Street 20140127

First time since november but settled just above that. Road map begins with the dow looking to work back its worst week in over two years. Caterpillar results beating estimates. The Company Announcing a new 10 billion stock repurchase program. Cisco slapped with a dow downgrade by jpmorgan. Apple slated release results after the bell today. Well preview how the allimportant holiday sales season has impacted its quarter. First up, stocks are looking to bounce back from a rough week which ended with the dow 318point selloff on friday. The s p coming off the worst weekly percentage loss since june of 2012. This, on worries about emerging markets and concerns that may further scale back stimulus at the fed meeting beginning tomorrow. Turkey has an emergency meeting planned tomorrow. Turkish lira, one were watching. You said on friday, jim, when panic is in vehicogue, everybod wants to join in. Theres typically a big downturn in gdp, im not saying that religious versus nonreligious should be the way they should be. Im saying economically you dont want to invest in a country like that. Money pull back. Argentina going the way of venezuela but not willing to say that because venezuelas been a pariah for years. People thought cat would miss, why bother to cover shorts going into the weekend knowing the worst dow stock from last year is going to disappoint again . They did, which is causing a different scenario, its harder to be short here. How much is riding on the fed meeting . I think the commentary will be very will regard it as being very important. But were in the midst of earnings season. We forget what these earnings, what the companies are saying. Now the companies uniformly are saying, the big spur in their growth is china. Now, they are almost all long cycle chinese. In other words, these are things that will not be kept back by a chinese trust bank that did not collapse over the weekend. Once again, if you think that chinas going to collapse because of a bank, you come in and you see they bailed out the piece of paper, if youre inclined to be as negative, youre kind of being stupid. I mean, i hate to say that, i know its all great to be able to have many different views, but not if the facts change. In facts change, change with them. We go through periods increased focused on these kind of conceivable things that could disrupt the markets. Thats fine. We seem to move through them. Suddenly theyre no longer in vogue. And youll find on the other end of the phone people saying, why arent they focused on italian borrowing costs . Right. Its interesting how that happens. Now were focused on shadow Banking System in china. Right. Larger growth or lack therefore of the economy and the turkish leer ra only to perhaps pass through that in the next few weeks where people say heres the best place to be. Same dynamic, overdue for a correction. We fall 3 , people lose their minds. A lot of stocks really did break down last week. I mean, for instance, probably the Strongest Group that no one ever talks about, because theyre so incredibly boring to talk about, the insurance stocks. They had an unbelievable year last year. First quarter, theyve been the most horrendous group so far this year. Some is fischman being honest saying theres price war, that and travelers, one of the worst performing. And that has been just terrible. Retail, Howard Schultzs comments ringing in my head, the quarter where things shifted to the internet from bricks and mortar. There are definitely issues here. They tend not to be issues people are talking. Really, i went over argentina closely, theres a also of companies that have a lot riding on argentina. 40l 40 Million People. We can make a great deal of argentina and saying its the beginning of the end. Argentinas been imploding for four straight months. We finally have what i thought overdue correction not a correction, a seminal change in currency, not unlike what happened to venezuela. When you listen to what the ministers saying, he wants to adopt very much a venezuela model, which has been difficult. Strangely enough, Procter Gamble talked about how to make money in venezuela. But when you change your government and go hard socialist, that takes you out of the meeemerging market quotient. You have a lot of children, thats a reason a Diaper Company would like to be there. Argentina is going socialist marxist. The idea, oh, the emerging markets are bad. If a 40 million country goes marxist because they believe thats the way to go stepping out theyre going price control, theyre going trying to change equality in the country. Theyre also corrupt. Corrupt meaning that theres difficult for American Companies to be there without trying to augment what they do to be able to stay strong in that country. Right. Without running afoul, of course, of corrupt being a term in our country, but over there would be fairness. Sure. All of these concerns aside, you do sometimes, you can forgive people and if they get overly concerned, i remember 07 people saying dont worry about the credit markets, everythings fine. Remember the outgoing fed chairman saying subprime is contained. It was very wrong. I think the systems stronger now. I dont know if the chinese shadow Banking System will bring down everything. I doubt very much it will. Its not that many years ago. When youre building the number of coal plants, say coal plants, though caterpillar was not striong on mine, youre not going to stop the coal plant building. News out of china last night, trying to get away from the heavy duty pollution causing industries. Chinas gripped with the idea theres a tremendous amount of dying there, respiratory illness that leads to fatalities. Theyre not interested in earnings per share, theyre interested in revolution per person and they do not want a revolution and theyre going to get it from medical and health if not careful. Lets move tonight earnings reports. Weve gotten our share of ones that werent impressive, caterpillar reports earnings of 1. 54 a share, well above estimates. Revenue ahead of consensus, despite 10 drop in sales. Announcing a new 10 billion stock buyback program. They have 1. 7 billion remaining, which they will conclude during the First Quarter. Buying back a lot of stock. This was a big number, in terms of where people thought theyd come. Biggest beat since july 2012. When you look at company, which has been poorly managed, and the buying of the excavating company at the top of the cycle, really stupid, buying a Chinese Company that didnt exist, another poor move, but they laid off a lot of people, boosted what they make per machine. Selling fewer machines, theyre doing better. This is a story of declining inventory in the United States. They try to dance around the inventory issue. But theres replenishment going on and its a story of nonresidential construction which is something that United Technology said last week we kind of forgot. United technologies is otis elevate somewhere heating ventilation, airconditioning, two boring topics not as interesting as talking about yellen and transition to fed. Yellen and transition to fed, i like the seahawks here, but when you Start Talking about United Technologies youre talking about whether Richard Sherman will have impact against peyton. I like the line, ill take denver. More granular. Espnlike way of looking at companies far better than a broadcast way of looking at it. Sorry. The buyback is big news at cat. 10 billion authorization, 18 of the flow, and i read this morning cats flow is among the lowest of the dow components, but critics argue its trying to mask order backlog 2 billion lower than last year. Look, i think caterpillar, if you look at share count over the last five years you see no diminishment. Its a company thats not able to did ill a directv, being there a better stock than caterpillar, i like the fact caterpillar is presenting a face which says inventories are low, which gives them a chance to say good things about 2014, chinas a stand out there. Thats counterintuitive, all we ever talk about is how chinas had the downtick from 7. 8 down to 7. 6, which is meaningless as ours going from 2. 2 to 2, but chinas always worrisome. The china bears were out this weekend in a way that really was, they were not pandas, they switched to grizzlies. But when i look, they dont have a lot of its not a heavy grizzly bear segment. I dont believe theres grizzlies in the continent. Out west. Canada. Yes, alaska as well. I dont think they made their way to china. Id love to shout fire in crowd in 2008 i shouted fire in the crowd. On the today show i said there could be a fire, maybe you have to beat it. Last week, ppg, the ceo, were trying figure out how business could be strong and the stock go down nine points in a heartbeat. I was trying to describe, chuck, 190 stock, thats a large dollar number, people are like, whoa, short them, ppg, theyre not doing anything good. They actually are, but now they dont report for a while, but i look at ppg and people short stocks based on high dollar numbers . Im saying stocks can be knocked over quite es ily. Different from last year. Yes, yes. Nobody could knock anything over and nobody could short anything and hedge funds trying to take risk down. So true. And didnt put up the numbers. Caterpillar was heavily shorted stock going in. Yeah. Of course. We know why. Different story for cisco, jpmorgan cutting rate on the dow component to underweight from neutral citing weak innocence emerging markets and delayed spending in the switching market, Software Software developed networking i knew product and they think spending will come down in advance of that. F5, a big customer with cisco, reported really beautiful number, obviously, reported on a horrendous day. The stock was up ten. But ciscos had a series of tremendous misses. But as always had a halo. This was the beginning of what you could begin to get a bottom in cisco, the halo was being undone. John chambers has always been given the benefit of the doubt. This is one where im sure John Chambers says, you know what . Those guys, they are writing a story which basically says, we are doing poorly in these emerging markets, but when you look at some of the Conference Calls last week, theyre the only one. Ciscos got a real management problem, but youre not supposed to say that. Why . What does that mean . You say it all the time. Because, well, i dont know, im not fearful. Perhaps i should be. A lot of times i feel in my career when you speak freely, youre making a very big mistake. To read the downgrade, theyre not doing as well as their competitors, and theyre true, chinas bad. Its like ibm, youre not supposed to say anything bad about ibm and Warren Buffett likes ibm. There was a horrendous call, ibm. Sometimes youve got to call it. Times youve got to call it. An al gui an al guise it to sports. Horrendous quarter for cisco but it didnt get blasted to oblivion because theres a benefit to the doubt. This could be the beginning of the end of the benefit of the doubt, more realistic view of this company losing to juniper, which, by the way, had an amazing quarter. Are we supposed to decide that junipers the outlier . I think cisco is losing business to a lot of companies. And that juniper quarter was as good as what cisco was bad. Bad. But junipers not talked about because juniper was viewed as a dumb company. A nice piece about the new ceo and howell out and janna having an impact on the way he think. Beautiful preannouncement. It was. The stock was extremely strong, last week it was. Cisco shares dont look toing down meaningfully, say 40, 50 cents, not nothing on a 22 stock. And the buyback in there. Speaking of buybacks ineffe ineffective, the flow has shrunk but the buyback done as an average price of a Hedge Fund Manager who would have been taken out and shot by now. Wall street bracing for a big after the bell earnings from apple. Find out what cramer thinks about the iphonemaker after the break. Also ahead, Royal Caribbean getting a boost on earnings but faces challenges after a stomach illness strikes hundreds of passengers on one of the companys ships. Well talk to the ceo of the kruse operator later this morning around 11 00 a. M. Futures here, s p is 3. 3 below its january 15 high of 1850. More squawk on the street live from post 9 when we return. Well never be royals apple set to report earnings after the bell today. Analysts expect the tech giant to report fiscal First Quarter numbers 14. 07 a share, revenues of almost 57. 5 billion. Figures among the issues in the spotlight. Despite all of the estimates, the big discussions will be china, though phones may not be booked for december quarter and icon, right . Is it going to overshadow the business . I think it could. China Going Forward they dont theyre conservative in their projects but china will be a a dominant theme, people who did not like lack of china initiative, have to do crow eating. Im concerned about the Retail Stores in the United States because retail mall traffic, which they have a lot, is down, but you know, samsung did poorly, and nokia did poorly. Now, maybe this is share taking and we dont talk much of share take because apple had been losing share for so long. Its possible, although i mean, it operates at the higher end. I dont know if we can expect thats going to be i mean that they will gain significant share. We have to know what we have to know what chinas subsidizing. I dont know whether china will be difficult to tell that. Thats not going to be anything in these results. But people want to look forward. Are there people who are going to say, theres no new big refresh . China mobile i meant. Were all kind we all kind of know, its set in at 500, okay, they havent figured out a car that runs on water yet. You know, the day there is something out there is a nice thought. Its 2014, man, come on, wheres the tv . Talking about it for years now. Get on it. We all twhan want that tv. I was trying. If we have smoke detectors that we can wave our hand and say hello to, wed like to wave our hand and say hello to thursday night football. I want my iphone to expand so i can stick it on the wall and then it will contract and i can put it back in my pocket. No matter what they do in phones say its 56 million, that will be a record, barring a massive surprise. The previous record, 47, back in q12013. Are they in the dog house still . I feel like theres a dog house element. I dont know if theyre in the dog house. The multiple is extremely low. By the way, there will be a focus on how much cash they generated during quarter, its always, frankly, stunning. Yes. That cash making abilities of this company have truly never been equalled. And that will go to the Capital Allocation question yet again, so they may get questions, what about it . Theyll probably answer the same way they have been, well let you know. Early this year, at some point, well let you know. Weve returned a plan of 100 billion in determines dividend and buybacks. The low, greatest debt offer of all time. They are they tend not to be great work of art, people who have really studied the great i think they studied the breaking bad, they delivered these cablelike arcs on their Conference Call. This is, apple, has not done it. Doing daytime drama. Its as if someone said, lets me coach you how do a cablelike homeland to a Conference Call. Some calls are disjointed, guys, get a script. Theres other calls that developed into a magisterial full story. Well get some of those with amazon google, facebook. Amazon, he gives it 27 google they have developed a good conference. Facebook is breaking bad an emmylike Conference Call. What role is sanburg . Zuckerberg is walter white . Claire danes. Shes claire danes. Well all over the place. I want to know who the true detectives going to be. Talented. Who is matthew mcconaughey. You love that show. You really do. You know who amy hood. Amy hood. The best, new actress on the scene. Microsoft cfo. Im tell you, a star in the making. Got it. Rising star, amy hood. Well get cramers mad dash as we count to the opening bell. Well get the futures and get monday started. 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. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. All right. 5 30 before the opening bell on a monday. Want to talk merck. Yes. An interesting reordering coming in the drug group. Merck, we had such low expectations for down here, and this morning we get a Morgan Stanley upgrade thats kind of rather startling, saying, you know what . Merck has momentum. That has not been the case for a long time. The company that had momentum was bristol meyers. Bristolmyers said something on the Conference Call, they acknowledged they had a, quote, nice valuation and that made people its like, oh, my remember when reid hatings said my stocks too expensive. Or elon musk and tesla. I like merck is inexpensive stock and done a lot of things wrong and now can go right. Bristol, when i go over the quart, rerating itself as biotech and acknowledging, one point someone said are you rolling the dice . I think bristol didnt handle the question well. I think the answer should have been, were going to become the cancer, doing our best to emore yor rate cancer around the globe. Merck has low expectations, david that they basically can put numbers down and people say, merck could be back. I remember when merck was st. Merck. But, maybe mercks getting momentum back a little bit of love where there had been a lot of hate. Regenero, you manage to get that in there. 5 to 300. 7 billion market value. More ahead of course on squawk on the street including, yes, opening bell. 3 30 from now. Bulldog oh boy bulldog mattress discounters president s day sale whats this . A queensize sealy gel memory Foam Mattress for just 497 . Mattress discounters has the Largest Selection of memory Foam Mattresses under one roof comforpedic, icomfort, optimum. And wow four years interestfree financing on the entire tempurpedic cloud collection. [yawns] dont miss the president s day sale. Mattress discounters [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. On the street monday live from the Financial Capital of the world, the opening bell in 40 seconds or so. Jim, its been said you can time your watch by some of these midmorning selloffs. And i wonder if were in storer to that again. I dont like an Early Morning up because what happens there are a lot of people who say i didnt get a chance to get out on friday when it was down 300, theyre giving you another chance, i want to take it. Thats usually the case between, say, 10 00 and 12 00. Yeah. Well see. Youre not a fan generally of up openings on a monday . No. Theyve been foolish. Well continue to watch that. By the way, the dow has not had five Straight Days down since thanksgiving, essentially. Today, it would be five in a row. Its funny, most of the dow stocks reported stellar numbers with the exception of ibm. When you go over line by line of the dow stocks, theres a lot to like. But remember, that those were splitting hairs on friday. But they get, as things get more granular, people pick and choose ones that did well. Theres a look at s p at the top of the screen. Big board today, k12 ink and new york Preparatory Charter School kicking off National School choice week. Norwegian Cruise Line Holdings celebrating the launch of the norwegian getaway and First Anniversary of its ipo. Well talk to the head of Royal Caribbean later in the explorer passengers and crew sick. Theyll turn around, come home early. Again, industries manage to survive a lot of the episodes, jim. Buys every time. Royal did put up fantastic numbers. Take a look at carnival, come back all the way. Two very good companies. And weathered a lot of storm and brought an affordable luxury vacation, and that is a big theme for, id say, for the middle class around the world, affordable luxury vacations. You mentioned carnival, second biggest gainer on the s p. Is there a sense when these things happen it may not be bad for the industry, but you want to buy a competitor who might benefit from lack of bad head. It put up good numbers today. The notion of the cruise, for those of white house haus famil them its like something that is a love after the terrible italian accident, i thought for sure the people would decide these things are too dangerous. No. No. Not at all. Another theme weve talked about here, strength to grow. We always tyalk strength to gro. A 5 billion market cap company, ryn. Take a look. Stocks up almost 9 . Whats going on . The companys splitting into its performance fibers business, specialty chemicals, and as far as resources and real estate business. So it owns a lot of forest land, consolidated there, sold new york timberlands, make significant acquisitions in north america and new zealand. And its got a separate business, these are on different growth trajectories, different Capital Investment needs and dont belong together any longer. Holy cow. People have been saying, why is this company underperforming . Its not a bad company, by the way. Its had a good yield. A company that basically looking what warehouser did not long ago, what International Paper had to do. Had to do selfexamination. Nice for shareholders. Yeah, performance fibers, they havent named it what its going to, the worlds leading producer of high specialty cellulose fibers. Interesting if its a kimberly supplier. Interesting to note in that case, they are splitting. Brings to mind ebay and arguments from last week, as to whether those two businesses should be together, as management clearly states they believe is the case. Seems like years ago, ebay, right . Because of the market decline, it got lost in the shuffle. But that was a not great guidance and it was and carl icahns not tweeted today, has he . Its still early. He isnt up yet. Should be like wall street research. Icahn will hold a buy on twitter today. By the way, seeing a lot of the industrials, jim, the deeres, on the back of caterpillar, which is up 6 , best performing s p name. A lot of belief if you go through line by line of cat, theyre positive about mining, which is hard to believe, mining we know is slow, when you think of coal mining, copper prices held in, 39, 40, on the jjc. I think theres an element of gold mining. When youre doing gold mining you might have planned your gold mine when gold was at 1600 and you dont scrap the plan because its at 1200. Gold mining stocks have bottomed, im not recommending any of them. But its been an interesting bottom in gold. Yeah. Its been painful getting there. Painful. Finally broke the whole streak of gold outperformance. But, cat sold said good things about engines, so people want to extrapolate. The idea of extrapolating cat to deere, okay, i mean, if you read through the calls you wouldnt do that, but people like to do those kind of things, traders like to. Liberty global, our big acquirer of the day, if you will. Its a monday be its not merger monday. This deals been in the works for quite some time but announce a deal to acquire the netherlands ziggo, which will reach 7 million or over 90 of dutch homes. Liberty global, of course, continues to grow dramatically through acquisition, remember, virgin media its largest deal, that was completed last year. Right. If anybody out there using generous Capital Markets and low rates to his advantage, its john malone, who controls liberty global. Interesting to see whether it detracts interest down the road, i mean down the road, of a large u. S. Based Cable Company that might have interest one day expanding internationally. Wow, where did you get that . I just one day. Im saying, way down the road. Liberty global has an Interesting Group of assets as we know. Ziggo significant one, talking 13 billion, that includes debt. This is not an insignificant acquisition. Its occurring at a time when the chatters all that the evaluations for Different Companies are going down. Because of europe. Someone like malone, who is not under pressure from activist can take a longer term view. He caught the bottom in europe with big buy. Companies weve been reading about, caterpillar not much, because theyre not as important in europe, but a lot of the Technology Companies have a lot of good things to say. Abnet, came on mad money europe as a definitive term, 100,000 customers, doing business with Server Companies and theyre saying europe has gotten, quite, well, much better than before. Its important to point out, malone was the first. He was. Bought into the bottom. He did. The charter, of course, continued attempts to acquire time warner cable, use of generous Capital Markets, bank debt at low rates. Hes one of the guy whose said, im all in. Hes a visionary. Yeah. Hes not afraid of leverage, which is important. Hes got the tax system, too. The guy, look, a financial engineer, also an operator. We tend not to have people who can do both. If you look at the ibm Conference Call, you are conscious they are financial engineers now. Thats the criticism of a number of companies. Mike freeze who runs liberty globing is regarded as operator and joined us last week from davos. The bounce, whatever, if you call it a bounce, quickly faded, up 23 on the dow. Mary thompson on the floor this morning. As you mentioned, the bounce is modest, at least for the dow, which last week posted its worst week since november 2011. Were seeing weakness in the nasdaq now, off 2. 5 point. Decline in semiconductors, thats contributing to weakness in the nasdaq. A little bit of weak innocence Oil Services Stocks and utilities, theyve turned around, they were weaker at the open. The markets steady. After last weeks plunge, triggered by concerns of the emerging markets and selloffs, hoping to steady emerging markets or currencies overnight. One piece of news there, that this emeremergency meeting, the could raise rates, that helped to steady the markets. The fact that an Investment Vehicle used by wealthy chinese did not default, that helped to steady markets. Germanys ifo Business Confidence index troesrose to 2 year side. State side, caterpillar came in with better than expected earnings, as youve been mentioning throughout the morning, the Company Announcing buyback plan. Keeping watch on the yen. Last week, of course, the yen soared as investors sought this as safe haven. Seeing the dollar strengthen today as investors start to pull away from the yen as that safe haven. Again, more optimism coming into todays session. Keeping watch on the s p 500, dropped below the 50day moving average. When you see the drop recently, theres typically a strong bounceback there. Its still well below it by 12 excuse me, by 20 points or so. Well be watching that. Lets take a look at some of the dow components keeping watch on. We mentioned caterpillar. Pfizer, disappointing results on an experimental drug for nonsmall cell lung cancer. Cisco systems cut underweight, citing val situation, thats impacting the nasdaq. At t notvodafone. Royal caribbean, over the weekend, news that hundreds of passengers sick on one of its cruise lines, nevertheless, the company came out with stronger than expected reports. And raises its earnings estimates this year, expecting earnings of 3. 20, 3. 40 a share. Continuing to see a mixed market right now. Weakness in the nasdaq. S p looking stronger. Dow holding on to 41point gain. Mary mentioned vodafone. To europe, shares were down as was mentioned, observe the weekend, at t, asked by the uk Takeover Panel to response. And this is takeover law in the uk, to various news reports, sky news being one of the key ones, about randle stevenson, at t ceo, and the possibility of not just having his having met with many regulators but potential bid for vodafone. When asked, at t responded as they are forced to under rule 2. 8 under the uk Takeover Code saying, we are not planning to make a bid at this time. In fact, they will not make a bid, most likely, for the next se six months. There are carveats. It will complete the sale of the 45 interest in Verizon Wireless. Of course, great speculation, given the comments that we have watched from at t ceo Randall Stevenson that the company is interested in acquisitions in europe, he continues to meet with regulators there, trying to get a lay of the land, trying to understand whether the concerns about the nsa, wiretapping, for example, will hurt any for ray that at t might make. But again, news not taken out too badly on vodafone. Thoughts being, it doesnt mean its not coming, it may not come immediately when they conclude the Verizon Wireless transaction. For his part, steffanson can feel pretty good, out there getting his Shareholder Base accustomed to the idea he may do something in europe, and it may be large. And the stock has held up fairly well since then. You know, we know hes a believer in europe. Such a great move for him. Oh my. You think so. Others wonder, why would you want to get involved . Whether its vodafone or another property, why would you want to do that . 700 Million People right now, down on their luck. I think that you could we talk about china being 1. 3. Weve got 700 Million People, developed country, developed continent, there could be a turn. Its not just germany. I know that europe has gotten out of favor, but uks had good numbers. I just think that if were going against sprint, tmobile, verizon, youve got to give us Something Else. Youve got to give us some growth. At t did lag verizon. People liked the verizon deal. I mean i think at t could get the benefit of the doubt. You do . I do. With any challenges . I think its brutal in european telecom. It is. Hes of the belief its going to get better, regulators are going to see how much theyve fallen behind after they balkanization of the systems across the continent that doesnt work. If you look at stories about worries about carbon climate change, theyve been ratcheting back their worry about that because they want to promote growth. Theres a battle going on in europe between job creation and the greens. And the greens, who had been in been winning fight after fight after fight, find themselves on the ropes. Now i dont think people recognizing those countries, how much the cost of energy has made it so theyre in a major disadvantage versus our nation, just important. It is. Final thought on vodafone, the ceo, hes got a lot of credibility with his Shareholder Base, dont forget. They were after him for some time, he held out and held out on selling the Verizon Wireless stake, and he sold at a very, very good price. Nobodys going to be pressuring him to do a deal at this point. Hes, again, got good traction with his own shareholders and they believe if theres a deal to be done, hell do a good one. Move from stocks to bonds. Rick santelli in chicago. Rick . Thanks, david. Well if you look at intraday, two day of tens, rates have moved higher but the twoday especially shows us that in the context of the way we traded friday, we are still in the thick of that range. If you open the chart up, this is fascinating. As you open the chart up to november, what you should garner from this chart is the apex on the right side the beginning of the year. Yields have been moving down. It isnt just here. Look at a bund. Start all of the other sovereign tenyears back to august. See what the apex is, yields down. Yields down. But the next one is interesting. Spanish, even though yields are down theyve turned up on the greater context of the chart. Theyve made serious progress. Just like the italian tenyear. But the problem is, look at italian banks, how theyre trading today. Look at spanish banks, see how theyve been trading. An issue of last week isnt about end of the world, its about the new world and how things like banks that dont look very good on paper could be in countries that dont look good on paper and seem to be holding on based on the germany eurozone in its entirety. Other big issue, Foreign Exchange about as were looking at dollar yen, look at the chart or the euro yen, big moves and maybe they do shadow, give you the information were all trying to garner as to the trade in its longevity but the corrections been small in the context of the grand picture. Really, tip of the iceberg or maybe no ice at all. Carl, back to you. Rick, thank you so much. Its going to be cold outside during super bowl xlviii but the events a hot ticket. What kind of price can you expect on the secondary market . Well talk with the ceo of one ticket resale website. Meanti meantime, cramer embracing his inner Richard Sherman. There was good football this weekend, wasnt there . Dont you ever talk dont you ever talk about me dont you open your mouth about the best stock picker in the game all right. Can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx trains move forward, so does the rest of the economy. Csx. How tomorrow moves. Fifteen minutes could save you fifteen percent or more on Car Insurance. Everybody knows that parker. Well, did you know auctioneers make bad Grocery Store clerks . Thatll be 23. 50. Now. 75, 23. 75, hold em. Hey now do i hear 23. 75 . 24 hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and. 75 25 now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter sold to the man in the khaki jacket geico. Fifteen minutes could save you. Well, you know. For what reality teaches you firsthand. In the face of danger, and under the most demanding circumstances. Experience builds character. Experience builds confidence. And experience. Has built this. Introducing the 2014 glk. The engineering and the experience of mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz Financial Services. Welcome back to squawk on the street. Reporting from the nymex this morning. Watching crude futures mixed this morning, seeing selling pressure in brent crude, because of the concerns over the emerging markets. Right now and also potential liquidity issues in china. We are seeing buying in west texas intermediate, hovering around 97 a barrel. Thats supported by the colder temperatures outside. Meantime, speaking of cold temperatures, nat gas hovering around fouryear highs. Looking for the polar vortex to continue into the east coast. Traders saying a heating oil shortage only the east coast supportive to nat gas but heating oil a small portion of the market. Last touch on gold, selling pressure today, stronger dollar, most of the gold traders saying its all about the fed this week, all eyes on that. Carl, back you. The rant heard around the world, part ii. James cramer channelling the seahawks Richard Sherman on vine. Im the best quarter in the game. Dont open your mouth. Im going to shove you real quick. Six seconds of madness, vined on friday . Within a few minutes after Richard Sherman did retweet and said i had, frankly, i ill quo him, hes the best in the game, ha, ha, thats awesome. Great execution. Multiple, multiple imitations. Many hundreds of thousands and i was honored he selected mine as being the great execution. A great back story. Could be a argument made he chose his execution from your previous executions. That could be. Which came first . The sherman or the cramer. Familiar with that kind of we have a similar temperament. I will be dough naturii donatin Charitable Trust fund, about what he does to be able to this is a special man. 4. 2 at his high school, had been to his high school when i was a reporter covering homicide. And very high gpa. You like the seahawks, dont you . Very much. The moneys going the other way. I really do. I like pete carroll very much. I do think that in this particular game, marshawn lunch, i know denver was able to stop the run game from the patriots but i thought it was overestimated because im not a blunt fan. Its hard to stop mar shon lynch. Peyton is 85 35. When the temperature is 40 or above. Pointing that out. Hom. I have an 18 signed jersey. Jims 6 stocks in 60 seconds. Ok, heres the way the system works. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Does that make a difference . Search cost of Financial Advisors ouch over time it really adds up. Then go to e trade and find out how much our advice costs. Spoiler alert. Its low. Really . Yes, really. E trade offers Investment Advice and guidance from dedicated professional financial consultants. Its guidance on your terms not ours thats how our system works. E trade. Less for us, more for you. Bulldog you know, not all heroes wear capes. Bulldog you know, some wear fur. And mattress discounters good deed dogs is here to help them. Meet yara. She helps veterans like marv stay independent. This is caspin. He helps wallace with things she cant do on her own. And goldie helps children with developmental disabilities, while suzie works with people in the hospital. You can be a hero, too. Give it mattressdiscountersdogs. Com, or any mattress discounters. Mattress discounters good deed dogs helping dogs help people. Nwas the most watchedage otelevision event ever. S so, whats next . The upcoming winter games from sochi. Where every second of nbc universals coverage will be available on every device. On tv, online or streaming on the nbc sports live extra app. Beginning february 6th, experience the winter games everywhere. Welcome to whats next. Comcast nbcuniversal yeah, were ready. Jims 6 in 60. Lululemon. Saying they got lulu too excited. Things are falter, wouldnt touch this. Maryland peabody. Destockpiling. You need more coal and peabodys a beneficiary, too cold. Ksu hit on friday. Horrendous Conference Call. They lost a major train going to the gulf that is now going to east. And the others mexican startup plants in auto did not come through. Toll, barclays cut them. One of the things bernanke wanted to do was cool price of housing. Barclays saying theyve succeeded, sell toll. I dont understand the love affair with ag. Walk me through the news ch p polt lay. This is taking an attack against the food chain. Why to use. One point to take a jab at mcdonalds which was their owner. Take a listen to this. Dont know what caused it to explode . If it wasnt jihad, the petroleum. They pay us fix their image, not cattle. Supposed to make sure this doesnt get out. Cow explosion video. Why are my cows exploding all over the internet . Its such a brilliant its going to be four half hour movies. They understand the food chain very well. The commercial, its the Derek Coleman trust your inner power ad about the absolute death seattle running back who is playing this weekend, such a great story, proctor gamble, dura sell, talking about business going up because of that commercial. Interesting new world were in. Companies have leveraged that media. Whats coming up tonight . This is very important, because when we hear talk about furniture, we hear about whetherth the stock market is hurting people. Showrooms have a decline when the market goes down. I want to know how the weekend went. See you tonight. Mad money with jim cramer. Breaking news on new home sales and reaction at the top of the hour. Ceo of Royal Caribbean after that incident on explorer of the seas. Back in a minute. [ male announcer ] there is no substitute for experience. For what reality teaches you firsthand. In the face of danger, and under the most demanding circumstances. Experience builds character. Experience builds confidence. And experience. Has built this. Introducing the 2014 glk. The engineering and the experience of mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz Financial Services. A body at rest tends to stay at rest. While a body in motion tends to stay in motion. Staying active can actually ease arthritis symptoms. But if you have arthritis, staying active can be difficult. Prescription celebrex can help relieve arthritis pain so your body can stay in motion. Because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. Plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. Celebrex can be taken with or without food. And its not a narcotic. You and your doctor should balance the benefits with the risks. All prescription nsaids, like celebrex, ibuprofen, naproxen and meloxicam have the same cardiovascular warning. They all may increase the chance of heart attack or stroke, which can lead to death. This chance increases if you have Heart Disease or risk factors such as high Blood Pressure or when nsaids are taken for long periods. Nsaids, like celebrex, increase the chance of serious skin or allergic reactions or stomach and intestine problems, such as bleeding and ulcers, which can occur without warning and may cause death. Patients also taking aspirin and the elderly are at increased risk for stomach bleeding and ulcers. Dont take celebrex if you have bleeding in the stomach or intestine, or had an asthma attack, hives, other allergies to aspirin, nsaids or sulfonamides. Get help right away if you have swelling of the face or throat, or trouble breathing. Tell your doctor your medical history. And find an Arthritis Treatment for you. Visit celebrex. Com and ask your doctor about celebrex. For a body in motion. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back to squawk on the street. New home sales dropped, they dropped, 7 , to 414,000. That seasonally adjusted, annualized from a revised 464 that became 445. Put this in context. If you look at october and november, october, 474, that was the best since the summer of 08. So we continue to monitor this. Somebody who always monitors, will give us a granule look at the number, lets go to washington, and diana olick. This is obviously a big disappoint, rick. We were looking for 455,000. We got down 7 , more, we were looking for 3 . But remember, these numbers are based on signed contracts, not closings, and they are very volatile, especially looking at december, which has low sales volume in general. So youre really seasonally adjusting these off a tiny number, so theyre going to be volatile. Were seeing supply at fivemonth supply, up from last month. Starting to see inventory on the market. The big question, though, pricing. Home builders had been raising prices and that was pushing some out of the market. Seeding median home price in december 272,000. Now thats way up from the 258,000 that we saw one year ago. Home builders continuing to raise prices because they have higher cost for land, labor, materials. Thats going to hurt sales. Going forward we want to see if this more volume in the market, this more inventory, will push sales higher, as we get towards spring. Again, december, very volatile. Diana, good explanation. Thank you. Diana olick on housing. The markets, mixed. Nasdaq a laggard. Dow hanging on to modest gains after fridays drubbing. S p, 1792. The chief Market Strategist and alec young with s p capital i. Q. Good monday morning. Good morning. Nick, weve talked for so long about the new normal. Were going back to the old normal. What does that mean . The old normal is the paradigm well see through 20 shand beyond. Its a combination of higher volatility, as weve seen, combined with lower correlation, which is healthy. We had correlations between sectors in the s p north of 95 over the past couple yof yeof y. Theyre down 80 . That will give people a better chance then the past couple of years. More volatility but also more tune. Do you agree . Do we have to go through some ugly period with regard to the selloff . We came into the year, looking for 1940 by the end of the year, thats only 5 upside from the 1848 where we started. So we have been expecting more volatility this year. We havent had a correction, 10 or more, since 2011. Historically, we have them every 18 months and its been 30. So, were definitely expecting a pickup in volatility. As far as emerging market story goes, well have to see how to plays out. Bad news priced in. Were vulnerable in the short term, especially with chinese news. The way to hedge that domestic sectors and small caps, looking at 15 International Revenue footprint versus 33 for the s p 500. Nick, its kelly. Good morning. I wonder, if what youre talking about we have i twoway market, were healthy and fine, wasnt it the nature of the selloff on friday that raised alarm, the fact that it but weffectively something that shifted people out of positions and raised doubts what kind of paradigm well be in for the months ahead . Friday and all of last week a wakeup call. For example, the worst, the most hated trade in the u. S. Was being long bonds. Bonds up over a percent this year. The secondmost hated trade gold, up 5 for the year. I think these shocks are healthy and force us to reestablish some semblance of normality and diversing it of portfolio. Only way you got hurt last week was to be 100 in emerging markets or a heavy dose in emerging markets and high risk u. S. This resets the line to something more normal, more rational. Alec, theres cynics who believe that were all checked into the hotel california, that were going to get through the fed meeting this week, and theyre going to give us the opium yet again. How what is what is yellens tolerance for pain . How willing is the commcommitte back and let markets work out what they have to work out . Theyve made it clear theyre going to begin the taper this week. I think were expecting that. I think the markets have factored that in in a way a validation of the recovery. They wouldnt do it if they thought recovery was so weak it couldnt handle it. Im not sure the recent emerging market volatilitys enough to move the needle for the fed and keep them from tapering. I think the bigger problem would be an acceleration in u. S. Growth that had people accelerating how quickly they expected the fed to taper. The 10 billion meeting increments are factored into the market. Thats a highclass program. If growth is too strong and we have to worry about fed tightening, thats a highclass problem given that were getting fits and starts in terms of the recovery. At the same time it would be easier to envision a janet yellenled fed with inflation falling, deciding were going to take a pause with the taper. If that doesnt happen, if for all sorts of reasons inflation is stickier, the parts of the unemployment mark looking healthier, that would be a fascinating challenge for her in terms of guiding central bank policy. Absolutely will be. It will be intriguing to see what happens first half of year. Even this meeting wednesday will be very interesting, because were coming off a weak december jobs number. If the fed knows january number is better, you might see another 10 billion taper on the back of the fact for the next ten days markets will be confused why they did that until they see the stronger jobs number a week from friday. Guys, thats going to be a heck of a week to get through. Thanks for your time. See you next time. Currencies, which are so important in the market with the spike in emerging market currency volatility, some drawing parallels to whats happening now and what happened in the late 1990s when there were memorable pricings. Lets bring in allen ruskin at Deutsche Bank with us. Welcome. Thank you. A great note this weekend. What was clear, people must have been calling you left and right, is it 1997 all over again . Answer was long and not entirely it sound likes its too soon to tell. What are you watching here . The big worry is that the em currencies and the em countries share of gdp, larger than it was in 1997 and 1998. You had developing countries, roughly 20 of gdp then. Its now 40 of gdp. So the Ripple Effects can be much larger. At the same time, a slow burn crisis. I know it doesnt feel like that it doesnt feel like that if youre trading turkey now. I think its going to be with us for the next 18 months to two years, in fact. Somebody said that argentina has perfected art of the slow motion train crash. How much of a worry is our reserves for some of the countries . I think argentinas a special case. I think youve got to take it country by country. Turkeys pretty much out of reserves in a credible sense. They cant use reserves, if theyre going to run out. Brazil, lots of reserves, russia, lots of reserves. Its a smoothing exercise. So they dont have to use Interest Rates. If they have to use Interest Rates, Banking Sector will run into problems and credit cycle will turn vicious, and thats the big worry, i think, out there. The credit cycle turning vicious. What would it look like . How do we get a sense its occurring . You see private sector credit slow down, both on the demand side and on the supply side. The Real Estate Market starts to turn. Real estate has been very, very buoyant, all of the em space. All of the accidents that are happening now, all of those property markets were going up rapidly through the end of last year. So i think those are going to turn sharply, really, in a way. You have to watch local data, really on the Property Side but its going to turn hard. Investors are remember 9798. Alan greenspan came to the rescue, 50 basis points, a great year in equity markets from september through the end of the year. Right. The greenspan put was in place. I dont think were in that space. The u. S. Did develop because beyond yelleds cushions the equity market. The u. S. Is better placed in a relative sense to much of the rest of the world. Could potentially, if the same thing were to play out and the fed had to come in with a response, talking about a dangerous overvalued potentially situation yard to equities or high yield. Before we get to that point, i wonder, how much leverage is there within the Foreign Exchange market . In other words, how much are people using funding currencies like the yen or other places to take positions and is that part of whats happening here . Did we learn something about that on friday . I think theres substantial yen carried positions out there. The counterport to that on the em side, people washed out of those trades. I dont think theres a long, long em position. Speculative accounts inclined to be short em. The big worry i have is chinas got a large carry trade. That could wash out effectively. A lot of capital thats come back into china and thats the point of maximum vulnerability. Wow. Domestic carry trade. We have to bring you back, talk more about that one. Thanks for your time. Lastminute restructuring of a troubled 500 Million Investment product issued by China Credit Trust company, one of the biggest trust companies in the country, appears to be preventing investor losses but the close call sparking concern about the stability of the shadow Banking Industry and appropriateness of government bailouts within the sector. Eunice, great to see you. What can you tell us . Reporter kelly, i can tell you that china really dodged a bullet today. A lot of people worried here that we would see a default in the shadow Banking Industry which could have had a Ripple Effect around the world. However, that did not happen. To give you background about it what we saw was that a Wealth Management product worth 500 million u. S. Was coming due this week. The Company Associated with it, a coal mining company, said it couldnt pay the money back, and investors were going to be stuck in some way, shape or form. So there are a lot of people who are wondering how the authorities were going to treat this current situation. As it turns out, the shadow lender, which is a Company Called a China Credit Trust, did put up a notice today and said that they have worked out a deal. They said that there was going to be an investment in the coal mining company. Weve been hearing that investors are going to be getting at least principal back and potentially some of their interest. Now, the larger question has been, you know, just exactly what does this mean for the future and how the authorities work these out. And because this is such a precarious sector, right now people are saying that possibly when you see bigger defaults to come, this is probably going to be the way that the government is going to be able to treat some of these issues and work out some of the deals. Kelly . Ill take it. Thank you very much. When we return, one of the worst performers in the dow friday. Today a different story. Cat is up almost 6 , after its Fourth Quarter numbers, having its best day in more than two years. Biggest beat in almost a year and a half. Should you be a buyer . More on that when squawk on the street continues. Can ke you in. Tdd 18886282419 you read this. Watch that. Tdd 18886282419 you look for whats next. Tdd 18886282419 at schwab, we can help turn inspiration into action tdd 18886282419 boost your trading iq with the help of tdd 18886282419 our live online workshops tdd 18886282419 like identifying market trends. Tdd 18886282419 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18886282419 sharpen your instincts with Market Insight from schwab tdd 18886282419 experts like Liz Ann Sonders and randy frederick. Tdd 18886282419 get support and talk through your ideas with our tdd 18886282419 trading specialists. Tdd 18886282419 all with no trade minimum. And only 8. 95 a trade. Tdd 18886282419 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. Tdd 18886282419 so you can take charge of your trading. Dont wait for president s day to save on a new mattress. Sleep trains president s day sale is on now. Save up to 500 on beautyrest and posturepedic. Get a sealy queen set for just 399. Even get 3 years interestfree financing on tempurpedic. Plus, free delivery, setup, and removal of your old set. Keep more president s in your wallet. Sleep trains president s day sale is on now. Superior service, best selection, lowest price, guaranteed. Sleep train your ticket to a better nights sleep welcome back. Watching shares of caterpillar. Take a look at this, up more than 5 this morning and having their best day since 2011. 44 from a year earlier announcing it will buy back 1. 7 billion in the First Quarter, 10 billion by the end of 2018. Lets bring in the machinery analyst at barclays and a machinery and analyst. Great to see you both. Andy, to start with you, do you describe this, obvious shares are loving it, but is it about the buyback and cost cutting or fundamental strength in caterpillars key marks. I think that construction is a big highlight here in the quarter. Construction mark margins higher than we thought they would be and revenue across the Company Higher than we thought it would be. Its the things that you mentioned, cash flow was strong and buyback is there but the quarter was pretty good and the outlook surprised people. Has it changed your view on the shares at this point . Weve been arguing that construction would stop the stocking weve seen a big inventory of destocking cycle here. Weve been arguing wed see restocking in the channel and thats what were seeing. Weve been positive, especially lately on the stock. And i think you know, this sort of backs up that thinking. Eli, what about you . The same question, whether this is fundamental strength and encouraging in terms of Share Performance from here. Its clear that this is a water shed event that the worst is behind caterpillar. And that was the big fear going into the quarter, not only the Fourth Quarter be a miss, but theyd have a down year in 14 and people kept extrapolating the downturn. What we saw in the quarter was that, yes, mining is weak and remains weak but the other parts, construct, would more than offset it and headwinds you can have a better year in 14. The company peaked in 12, downturn in 13, transin addition 14, improving growth in 15 and beyond. This changes the outlook for caterpillar to a positive se scenario for the next couple of years. Discussed about the size of the float, small among other dow components and going get smaller. Continues to see resilient support in the low 80s. Does that change the way you look at the fundamentals, the longterm fundamentals . I think you bring up a good point, actually. When you market to investors, i think investors steered clear of the stock. If you look at large global pms that we talked to, theyre underweight caterpillar. Youve mentioned that this companys underperformer here over last two years. If we can use this quarter as a springboard toward some growth, i think youre going the global pm vs to look at the name and that could mean a big snapback in the stock, relatively quickly. Eli, what is your view on the shares at this poemt . Moment . We have a buy recommendation. We saw some of it coming with surveys, the Fourth Quarters better than people thought. The share buyback, strong balance sheet, best in 25 year, the companys getting ready to not only return capital to shareholders but improve mountain outlook. You have to look at, remember, 14s a transition year, but things are put in place for caterpillar to have a very good couple of years in front of it. Not quite back to where it qaim from, but getting better. Andy, a question here. For investors who may not like the china story, worried about growth in the country or potential for credit crisis or whatever. Can they own caterpillar and feel confident that the stock will do well, despite what happens in china . Let me say this i think well need some emerging markets stability for cat to work Going Forward. We cant have what we had last week. Chinas a small portion of the overall caterpillar business. Obviously affects their mining business a bit. But the thing is, with last two years of mining downturn, i think the bad news is in the stock. Certainly in our neumber. We have 50 overall downturn in our numbers now in mining, and that includes the aftermark which is more stable. Thats pretty bad already in the numbers. If we can get stability in emerging markets thats where you see the stock perform well. All right. Well wait and see. Andy, eli, thank you both for your time. A big move on caterpillar. Dows up less than ten points. A quick market flash. Take a look at shares of tata motors, car slim, respective executive, died over the weekend. Police say he may have committed suicide. Analysts say the death could slow the domestic units recovery. Thanks . When we come back, buying bitcoins you need a secure place to store them. How do you begin doing that . Thats where coin base comes in. Find out how the digital wallet works when we talk to the cofounder here on post 9 in a moment. We know were not the center of your life, but well do our best to help you connect to what is. 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. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. After a week capped by plunging emerging market currencies new york ready for its public hearing on bitcoin. The cofounder and president of coinbase, a bit coin wallet start upp participating in the hearings. Were expecting new york regular later to blaze New Territory here. Bitcoinfully kind of breaks all of the traditional money transmitter products. Bitcoin doesnt fit on the books and new yorks trying to fix that. Is it going to be contentious . Do you feel v. To defend it . Not really, to be frank. Rewind the clock two or three months to the federal Senate Hearings on bitcoin and the tone alty was positive. A number of states looking at bitcoin and its fact finding and positive. We expect a good outcome. Those not familiar, if im new and want exposure, how do i work through you . How many accounts do you have . Were quickly nearing 1 million consumer wallets on coinbase. The idea to make it use for the average consumer, like paypal. Hook up your account, start buying bitcoin. Global number . So technically, it is cloegl. Its a global cur rent sy. But for the purposes of buying and selling the boy coin, it only hook up to u. S. Base accounts. Im amazed the openness, the federal, sound likes state level, demonstrated towards bitcoin because regulators who might typically be thought of taking a cautious approach to anything that would undermine the monopoly of currency, for example, have indicated a willingness to kind of see what happens. We saw bitcoin rally sharply after the Senate Hearings, you mentioned in the past. Thats right. Even in the last couple of months, there have been more concerns about how stable it is, how legitimate it is, the black market activity it may facilitate, they seem open . Yeah. You know we have the great benefit of coming after the internet. There were very a number of things in the early days of the internet that seemed scary and regulators, at the time, were unsure what would happen. Now bitcoin comes along, its a new, open network that allows a number of great things to happen but in the early days, with any new technology, a number of scary things, too. Regulators have seen that pattern in the past and hopefully are now being more forward thinking in applying it to bitcoin. You were a trader at goldman, where you not . Thats right. Why did you decide to get involved with coinbase . Why do you believe in the future of the boy coin . I believe in bitcoin its the first open network for all financial transactions. Bitcoin does what the internet did for distributing data, brought the cost down by an order of magnitude. Compare it to current financial rails like Credit Card Networks where its 3 , or western union, fees are higher. You know the fees are hidden. The second people are to start mining in order to rare fi the order of those transactions from party a to b to c, to make sure its not double counting, its going to get expensive and the costs will become transparent and exceed the traditional payments. Mining, its that should be better in the future, right . Its economies of scale, the larger the network gets, the lower each transaction goes. Youve gotten backing from an dresen. Right. How long term is his commitment. Very long term. The guy who invented the web browser says the original sin of the internet was not embedding economics into it its a strong vote of confidence. Next time, bring him along. Ill try do that. Good to see you. Straight ahead, Senior Vice President at Morgan Stanley Wealth Management telling us what his wealthiest clients are doing. Why he thinks the economy could reach real gdp growth of 3 during the first half of the year. To manage your money. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance costs. Spoiler alert. Its low. Its guidance on your terms not ours. E trade. Less for us, more for you. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. I took medicine but i still have symptoms. [ sneeze ] [ male announcer ] truth is not all flu products treat all your symptoms. What . [ male announcer ] alkaseltzer plus severe cold and flu speeds relief to these eight symptoms. [ breath of relief ] thanks. [ male announcer ] youelcome. [ breath of relief ] nwas the most watchedage otelevision event ever. S so, whats next . The upcoming winter games from sochi. Where every second of nbc universals coverage will be available on every device. On tv, online or streaming on the nbc sports live extra app. Beginning february 6th, experience the winter games everywhere. Welcome to whats next. Comcast nbcuniversal. About an hour into trading. Some of the stories were talking about 7 30 on the west coast. New home sales falling for a second consecutive month, down 7 in december, to a seasonally adjusted rate to 414,000. Economists expecting 455,000. Merck the number two gainer on the dow and the s p, up 3. 5 . Morgan stanley upgrading the drugmaker from overweight to underweight, expecting projections to rise and likes steps management is taking to improve the outlook. Autozone hitting new highs, above the 507 market. Markets try to recover from last weeks selloff, where are High Net Worth individuals put their money . Welcome. Thank you very much. Youve described yourself ace financial quarterback. Do you work with actual quarterbacks . As well, your clients include entrepreneurs, Silicon Valley types, athletes, by chance . Our clients are not we dont have athletes. We work primarily with corporate executives, physicians, and social entrepreneurs, Silicon Valley. Were you getting phone calls from people saying, what happens going on . Do i need to be worried about investments here. We are not focused on the short term. For a lot of them, we are trying to take the stress out of their lives and for investors the stress is not having a plan, not having what a goal should be their goals and layering what the markets are on top of it. Clients in general, when we talk about equity portfolios, tend to be longer term in nature. Our job is to take the stress levels out from them. You must have done a good job if no ones freaked out. I wonder what advice are you giving . What are key investments youre making for 20 sh . When we look at clients they come in different shapes and sizes but the most important thing were trying to get across is to have a plan. Sit down and look at what your goals are. Are you looking for education planning for your children . Retirement planning . All of those things. Make sure you are focussed on where your goals are and you have help to get towards the goals. Then where you have longer term portfolios, your 401 k s, retirement. Look where equities play a part in that. Lets look to the long term. That takes stress out of whats happening on a day to day basis. Emerging markets . Assuming you have allocation for clients to be diverse fifiedive getting calls from people saying get me out . No calls so far. Talking about emerging markets or asset class, we come back to whats the time frame . If our time frame is two months or three months from now, we look at this. If were longer term in nature, and part of investment mix where you have emerging markets im not anything happening changing fundamentals or demographics we see in the emerging markets. Even what u. S. Companies are doing with their does coming off 29 in the s p change your clients approach or recommendations to them in terms of their equity allocation . I think, again, the short term things in the market dont affect us as much as looking at longterm picture. What does it change for clients . We may have portfolios where well tackically have conversations whats happening. Its important we are having discussions and people are looking at whats important to them and when are the goals for when money is needed. Is the stigma coming out of being in cash . What ms yo whats your advice, im neutral on equitieses, i dont have a problem of being in cash or a large portion of the allocation in cash. When we look at overall portfolios and peoples wealth, theres a place for cash and a place for balance. The real questions going to be, how much cash is appropriate. When is the need for cash . If im buying a house in three months i may need to be in cash. If this is money longer term, talk about 401 k s for retirement plans, we say what can we be doing with that cash that makes sense per your risk tolerance and needs for the money. A zenlike approach. Thank you for joining us. Thank you. Straight ahead, Royal Caribbean seeing strong results for its Fourth Quarter. Will that be overshadowed by the recent outbreak of a stomg bug on one of its kruses . The ceo will join us to address all of that. Announcer where car be a name and not a number . 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. Lifes an adventure and it always has been. 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. The markets hoovvering arou the flatline on the dow. The nasdaq down a percent or so. A quick market flash. Ive got one winner, United Technologies. Spiking up more than 2. 5 , after defense news in industry publication cited sources saying that the company is considering options for its sikorsky helicopter unit. Some could include a sale, a spinoff. The more likely option, a sale or taxfree spinoff. The m a trend could be continuing. Rick santelli joins us with the santelli exchange. Good morning, rick. Good morning. You know, what happened last week . Everybodys trying to scratch their head. But i really done think its as complicated as everybody wants to make it. Look at word solve, everythings about the word solve. The chinese government, the Federal Reserve, the bank of japan, bank of england, all trying to solve the issue, and the issue, in my opinion, is insolvency. Thats what theyre trying to solve. Theyre trying to solve invol ven si. Now if you think about, 2007, you had roubini, one of the first, speaking out about how the primary dealers and the investment bankers, in particular, investment banks were insolvent. Then we saw a lot of changes, whether it was in the accounting, fasbe, everything changed but they didnt solve it. They papered over it. And i think whats go on, whether its in the italian banks, spanish banks, the loans in southern europe, how theres a new notion that Mario Draghis going to do a form of qe for the problematic loans, china gives us a great example about the issue here, and the issue really is insolvency. Consider this, for 2013, and ongoing sense weve had, you know, huge double digit gdp in china, its now, you know, close to half of what it was in its hey day. That means something. Out of all of the loans made, the actual government through the proper channels is trying to curtail credit a bit. What you end up withes a shadow Banking System that ends up participating more in throwing in money into the hopper. So when we look at what happened with the chinese credit trust, basically you had a coal miner, energy company, that wanted loans. Its like the junk bond market here. But their insolvency is at root of this and its also at the solution. For 2013, most economists agree, about onethird of all of the credit, onethird of all of the cred knit china, came from the shadow banking side. When you hear the word shadow its not a good thing. Shadow brings offbalance sheet and accounting gimmicks. But in the end, insolvency is insolvency. This time around there was a bailout, and it seems theres always going to be bailouts. If youre betting on the end of the world financially, my advice to you, dont trade off of it. Listen to people like jim cramer, go with it, invest, try to pick the best you can. But in the end, trying to postpone insolvency forever with shadowy issues or accounting gimmicks or fed or central bank programs, theres going to come one time where we dont bounce back because in the end, what were doing is, were lopping off the variance of the reality of the output of economies to shadowy issues that sooner or later may catch up with us, and i hope they dont. Carl, back to you. Rick santelli in chicago, thank you for that. Breaking news on southwest airlines. For that, we turn to phil lebeau. A Long Time Coming but southwest announced that it will begin International Flights starting on july 1st, going to the bahamas, aruba, jamaica, just the beginning. Initial flights out of atlanta and then eventually over the next year theyre go doing a rapid expansion into destinations in the caribbean, eventually latin america. Southwest airlines no longer a domestic carrier. It will begin International Flights starting july 1st. Back to you. Phil, thanks. Think about this, for the average price of a super bowl ticket during that same week in new york city you could do all of this, see the knicks play the heat, see the black keys in concert, see billy joel live at garden and take in hockey watching the rangers play the islanders. Want to go to the big game . Well talk to the ceo how to get there when we come right back. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Turning dreamers into business owners. [announcer]. If you think the best bed for one of you might be a compromise for the other one. [woman]ask me about our tempurpedic. [announcer] theyre sleeping on the newest tempurpedic bed. The new tempur choice. [man]two people. Two remotes. [announcer] firmness settings for the head,legs,and back. And with tempur on top,that famous tempurpedic comfort comes any way you like it [woman]ask me about the lumbar button. [man]shes got her side. And ive got my side. [announcer] tempurpedic. The most highly recommended bed in america. [woman]dont touch my side nwas the most watchedage otelevision event ever. S so, whats next . The upcoming winter games from sochi. Where every second of nbc universals coverage will be available on every device. On tv, online or streaming on the nbc sports live extra app. Beginning february 6th, experience the winter games everywhere. Welcome to whats next. Comcast nbcuniversal its a live shot of whats called super bowl boulevard in new york city. The super bowl around the corner this sunday, said to be the most expensive ever. What about ticket prices . The average list price for this suns game 3,019. 99. Jesse lawrence, ceo of tickiq. He joins us at post 9. Great to see you. Good morning. Everybody thinks its its prohibitively expensive to go to the games. Is that true all the time. It is relatively speaking. Compared to other super bowls this is one of the cheapest in the five years weve been tracking the market. The cheapest in five years . Yeah. Why is that . Weather, some other dynamics. A combination of weather. New yorks not selling itself. Distance a big factor. Combined teams have 4600 miles to go to get to new york. People are waiting. People are sitting and letting the market drop. What do you mean, new york isnt selling it self . Its been snowing, digging out from ten inches of snow over the last week or so. Its not as if the committee behind the super bowl has been doing something different. Mother nature. No, no, absolutely. Not only is it relatively cheap, the actual spread of prices between the highs and the lows is different than years past. Absolutely. The lower level seats are going for than average of 1800 and in the past thats been 2500 seat. If youre thinking about going, you want to sort of get out of the elements a bit, lower levels are a good option. Suites, speaking of getting out of the elements, those are expensive. More expensive than ever. The new York New Jersey Super Bowl Committee gave them to sponsors. Usually jets giants fans can sell their tickets. They are 5x. Roughly . 500,000. Wow. Is it normal for this late in the season, late in the game, to borrow the phrase, for companies to be making that kind of decision . I think people are probably also looking at the market and suite were listing over 1 million last week. I think people who are thinking about going, probably got airlines set up and are watching the suite market tick down. But inventorys low. Theres only two or three left. For your business, people say, its the super bowl of such and such. Is this the super bowl of watching ticket prices . Absolutely. This is the super bowl of tickets overall. The biggest goal event of the year for ticket sellers, without a doubt. You know, coverage of the event from a ticket data stand point, something we do a lot of, unprecedented its always interesting to see what happens. New york is one of the more interesting events weve seen. Any contingency plans built into a Ticket Purchase or taking a gamble on the weather and conditions being in your favor . The super bowl did talk about a contingency plan last week, could be friday to monday. Fridays a disaster, month is a total disaster. Saturday would be okay . Saturday wouldnt impact it tremendously. Friday or month, youd see prices under 500. They could give everyone the day off. Travel plans are the issue. People coming in, going out. Weve talk about, especially in music and the grammys were last night, the emphasis on live, what Live Entertainment has done for ticket prices and the industry. Billy joel doing an artist in residence at the garden and sold out for months. How long can that last . Im contributor at forbes and i did a piece two or three weeks ago about how long the residency can last. For each subsequent show, we think three years to go. Three years . Wow. At a concert per month . Concert, give or take a concert per month. But, you know, hes the ultimate new york performer. His record before was 12. Practically outlive msg at this point. He could. I wonder if were going to start to see other artists bake in some sort of recurring revenue stream like that at other venues around the country. Britney spears is doing it in vegas. Right. Nothing like the stage of the gashden, which is the worlds most famous arena. I think this is unique, but it wouldnt be surprising to see other artists do this model. Its not a bad gig. You get to sleep at home and, you know. That was his whole point. Stay at home in long island and come in once a month. Thats right. It terms of the game are you seeing an even split or do you track whether or not people are buying for the broncos or buying to come see their seahawks . Seahawks are predominantly about 21 seahawks to broncos right now. Wow. The 12th man is not only voting with their voices as they do so often, but, you know, buying in greater quantity, it would be the first super bowl theyre a really rabid fan base. I like when their plane showed up on the tarmac and the pilot flew a 12 flag out the window as they were coming in. That will be a factor in the game. Probably not as much as at centurylink where they play their home games, but it will certainly be a factor. Based on ticket sales weve seen, there will be more seahawks fans than broncos fans. Are we going to see a lastminute push . Could prices change 48 hours before the game . An interesting question. We looked at the 201011 super bowl in dallas. It was awful weather the week before, but prices dropped 20 the first week, raised 10 in the second week leading up. So i dont think well see that, but i do think we could see a little bit of a bump in this week. And i think nows the time to buy. If youre thinking about buying, theres a good bit of inventory. You dont want to get stuck with no inventory and prices going up. Id say the next few days are probably a good time. A lot of our viewers could actually go. I was going to say especially if the market holds up at these levels. Thats right. Jesse, thats great stuff. Thank you. Thank you. Twitter though is falling sharply today despite the fact that as we said the dow is up about 28 points at this hour. Well get you details on that decline. A little less than 6 now, when we come back. Keep it right here. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. That its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Welcome back to squawk on the street. Im here to talk about Career Education. That stock is falling more than 4. 5 after the company said it received 12 inquiries from state attorney generals related to its enrollment practices and student loans. U. S. Education companies have come under great scrutiny for high student dealt loans with low rates of graduation and job placement, Career Education is certainly the latest in that string. It is a small cap company, carl. Sheila, thank you for that. Look at twitter this morning down sharply. I think about 6 at last check. Recommending to short the stock in yesterdays ber answer. They report on february 59. That will be the first time reporting as a public company. The street doesnt have a good handle. That will be a day of clarity. Yeah. It took a couple quarters to really work things out. The stock underperformed and finally started to find some stability. Interesting on twitter sell out, volumes nothing like we saw at the entd of the year when it was memorably having big moves. Of course facebook reports after the bell on wednesday, so its a big week for social in general. Big week for cruises too. This news about the explorer of the seas, the Royal Caribbean ship coming home early because about 600 passengers and crew became ill. It was on a tenday trip of the caribbean. Earnings were good not having a massive effect on the stock. Weve seen the industry bounce back again and again. That seems to be the big point as that stock is up almost 3 . Well be talking to the ceo in just a little bit. It will be interesting to ask him as some are describing this, carl, as an Inflection Point for the cruise industry generally and as you say the recent sickness on the trip will do anything to thwart it. Caterpillar actually helping the dow, but the dow potentially looking at a fifth consecutive day down today. We havent done that since thanksgiving of last year, november 29th through december 12th. Weve obviously come down from our highs for the year. Well see. I thought interesting comments earlier hour about emerging markets, the concerns, degree to which rates come into play what happens to real estate and banks in some of these Foreign Countries at that point. And talking to the journal out in dabos was making the point, i think some forget even the pros dont know whats going on until they know. You cant really trade this with any pre, you know, with any conclusion in mind. Look at today maybe a pause unless youre looking at the nasdaq. By the way, if youre just joining us this morning, heres what you missed earlier on. Welcome to squawk on the street, heres whats happened so far. Its a time where people are sending their money into sort of shortterm assets into the u. S. So if theres a pop they can then move. But in the meantime theyre getting out of the riskiest things. We are going to be moving to the higher range, not way up by 30 of course which at 2,000, the higher range of those historical ranges of p e, 18, 19, that gives us another 10 , 12 on this market. You think chinas going to collapse because of a bank and you see theyve come in and bailed out on paper, if you decline to be as negative, then youre being kind of stupid. I hate to say that because i know its good to have many different views, varying views are fine, but not if the facts change. December new home sales dropped. They dropped about 7 . We havent had a correction 10 or more since 2011. Historically we have them every 18 months and its been 30. So were definitely expecting a pickup in volatility. The big worry i have is that chinas got a large carry trade, its a domestic carry trade. That could washout effect ily. Theres a lot of capital thats come back into china. Thats the point of maximum vulnerability. Good monday morning. Were live at post 9 at the New York Stock Exchange watching the markets. It did appear we were going to get a breather from some of the selling, but that midmorning bounce didnt last too long. The dow up 18 points, s p gone negative to 1786. And nasdaq by far the laggard down by 34 points. Look at shares of caterpillar rallying after Fourth Quarter profit revenue in above estimates. Also announced a new 10 billion buyback. The stock adding some 34 points to the dow. And then shares of merck seeing a nice move to the upside after the drugmaker was upgraded to overweight over at Morgan Stanley talking about some of the things theyre doing to fix things like r d and potentially weighing strategic moves. Road map begins with the markets. Stocks miked after the dow posted worst week in over two years. What to watch for. And with all that volatility people are watching this weeks fed meeting very closely. Is there actually a chance the fed could put the taper on hold . The wall street journal is here to answer that question. And this doesnt sound like a dream vacation, a Royal Caribbean ship forced to turn around early after 600 people on board have come down sick with a gastro intestinal virus. Is this bad news for caribbeans bottom line . Well ask the ceo, richard fain, in a cnbc exclusive later this hour. Markets mixed during this mornings trading. Dow coming off more than a 300point drop on friday, the worst weekly decline in more than two years. And all these emerging market jitters continue to worry investors. Wheres the best place for your money now . Jerry castellini, good to see you this morning. Good morning. You seem to think this corrective phase isnt over yet. No, but dont get too in love with it either. Were down three or four, maybe, five or six. But this is the kind of thing we all talked about at the end of last year. If the market pulled back some, would we get our chance to put capital to work . And now you see us trying to worry about all the different merging market issues and kind of neglecting whats going on with the u. S. Economy and the u. S. Stocks. I mean, we havent yet gotten any significant outlooks from companies because were still in the quiet period. But wait until you get the real earnings reports rolling in here in the next couple weeks. Youre going to see a lot of visibility on earnings for 2014. Thats likely the bottom in this corrective phase. David, we are getting some initial guidance for the year. I dont know, would you argue its been especially impressive or not . I think youre starting to see some building momentum. Obviously the imf raising expectations for developed market economies last year creates a better external environment for many of the exporters around the world. I think youll get some positive surprises like we saw with caterpillar and other names in the coming weeks. I agree that sets a stage for a stronger 2014. David, its so interesting since this very moment that the imf and the world bank and everyone at davos everyone come out and talked about how great the outlook is for 2014 and currencies which those markets frankly are kind of the leading gauge of where this is all going unraveling in the last couple trading sessions. People are understandably here trying to look and discern whether this signal tells us theres going to be trouble ahead for a lot of the people optimistic this year. Well, i think you need to look at where those currency pressures came. Turkey, political problems. Argentina, political mismanagement. South africa, labor unrest. I mean, those are really the currencies that got hit the hardest. You have to look at what the drivers were last week to start this and get peoples attention. And really theyre peripheral markets that arent core to most peoples portfolios. Chinas numbers at the end of last year were better than expected. We expect that to continue to improve as the external environment around the world improves in you were and the u. S. Jerry, what levels do you think stocks get markedly more interesting than they are right now . Well, the markedly point is probably that 1750 mark on the s p. The question is whether well break the levels where were holding at here. And i think a lot of people expect to get down to there pretty quickly. Boy, youre going to need more than a trust in china going sour. And i agree with the comments these are peripheral countries. Weve been through this a couple times, right . Weve been through these, you know, oneoff currency issues. And all they are is distractions. I would suggest to you that theres more people waiting for the buying point. And most of them generally miss that. Most investors will be buying higher throughout the year than probably even right now because theyll just be too anxious to try to call a bottom. Jerry, at the same time a lot of countries in the past that have been responsible for triggering broader global crises, if you will, have never been a big portion of gdp. So i just wonder as you say this still appears to be an environment where the thesis, the growth story is still in tact. But what would tell you that it was really breaking down . I mean, whats kind of your worry point here . Sure. Lets look at all the interbank all the libors around the world, make sure those arent moving up. The vix, which has been a decent forecaster of problems, is still in the teens. And, boy, we havent seen issues with more structural problems until that gets close to 30. So those are bigger leading indicators that were not even close to trigger points on yet. And broadly speaking the global Monetary System is still just pouring capital into the Global Economy. And thats what we all have to focus on. Theres still plenty of liquidity out there to drive this and collect people up 3 , 4 , 5 down from here. Finally, david, its a long week ahead, were going to get a fed statement, advanced q4 gdp, guidance of the year likely for amazon or google. How effectively do you think we can navigate po tenl shl land mines over the next few sessions . I think if people focus on fundamentals, folk cuss on the stronger markets like china, hong kong, look at korea, other parts of east asia, poland, mexico, some of these countries are in much better shape than the ones grabbing headlines. There are some we need to be careful in like indonesia, india, turkey, argentina, those are going to be some problem areas. But lets moment of sober reflection i think will remind people that many of these economies are in the best shape theyve been in in years. David rediel, jerry, thank you so much. Thank you. We have a news alert. Ad adobe releasing information on social media intelligence. Facebook and a few others cht i want to point out this is not just a little bit of point data. Its a 240 billion facebook ad impressions this is based on. More than 500 million social networking site visits. Heres whats adobe is saying. We should read through into facebook earnings and perhaps moves into social stocks were seeing. Its not just twitter thats down nearly 7 this morning. Yelp is down about 6 . Net suite down 4 , jive down 4 . Li linkedin down 3. 5 . Facebook at click through rate was up 365 year over year, 41 quarter on quarter. Cpn ad rates up quite a bit. But costs per click was flat year over year, up 29 quarter over quarter, thats lower than expected. So theyll give and take there. And some Interesting Data for other social networks. Theyre starting to get more share of valuable traffic into retailers. So when people leave twitter, click through to a site, this is measuring how much they actually spend when they click through from a twitter link or a tumblr link. For tumblr up 43 . These are probably blogs, fashion blogs or whatever people are clicking on. But shows the potential for tumblr to make revenue on. Pinterest up 240 . Theyre going to try to start monetizing more this year. Facebook, 72 . So theyre losing some overall social share of those valuable retail clicks, but then again facebook is the one that knows how to monetize these thus far. Yeah, i think people are looking for reasons why twitter is down 6 today. I wonder if that could be potentially one way of looking at the glass half empty. Or maybe its a Glass Half Full if you see the valuable customers are actually clicking through on twitter to these sites and buying stuff, so the opportunity is there if twitter can figure out how to monetize those folks for them to do that. Again, apple tonight, right . Yep. Everybody knows its not just going to be about iphone shipments but how chinas coming along and how carls coming along. Yeah. And, you know, i think the emerging markets are important to apples story, particularly because of guidance. The Holiday Quarter is very much weighted toward developed markets and greater china, but after that say last year we saw asia pacific go from a little over 7 of revenue to around 12 of revenue. So if asia pacific, the rest of asia pacific, is not as strong this year, that could effect what we see from apple. Also want to watch gross margin guidance because we see them projecting a lot of Capital Spending this year. We expect to see a new design on the iphone. That always costs them because they retool for it. Thats what i was going to ask. Most of the broader public all they want to know are we getting an iphone with a bigger screen. I dont know if well be able to read quite that much into it, but this is after an s year. Weve got the 5s now, after you get a new number you get a new design. Now would be the time to come out with a bigger phone. We dont expect any china mobile phones to be booked this quarter, correct . Or very few . I guess well see. You mean in the quarter they reported . Yes, the december quarter. Right. We dont expect to see much in the december quarter, but they are giving guidance. So we should expect questions from analysts about just how bullish they are. Cramers point this morning is their Conference Call in his words tend not to be works of art. Do you go along with that . I would say they tend not to be works of science. They are works of art. Youve got to read between the lines. Thats exactly how it goes. Busy night ahead for you, jon, thanks. See you on closing bell. That will be a lot of fun. Thank you. It was quite the week for the markets after the major moves to the downside on thursday and friday. As we approach the next fed meeting of course which begins tomorrow is that taper still on as planned . We will talk to the man in just a moment. But first, Rick Santelli watching some technicals this morning. Absolutely, carl. You know, cnbc does a wonderful job of showcasing widely held stocks. Well, when it comes to technicians, nobodys held more highly than tom demark. Hes going to look at three charts with us, u. S. Stocks, shanghai index, chinese stocks and the gold market. And at the end of last year he was one of the few who called for a bounce. Dont miss tom demark and his technical magic bottom of the hour. 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. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Bulldog you know, not all heroes wear capes. Bulldog you know, some wear fur. And mattress discounters good deed dogs is here to help them. Meet yara. She helps veterans like marv stay independent. This is caspin. He helps wallace with things she cant do on her own. And goldie helps children with developmental disabilities, while suzie works with people in the hospital. You can be a hero, too. Give it mattressdiscountersdogs. Com, or any mattress discounters. Mattress discounters good deed dogs helping dogs help people. Ask me what its like to get your best nights sleep every night. [announcer] why not talk to someone whos sleeping on the most highly recommended bed in america . Ask me about my tempurpedic. Ask me how fast i fall asleep. Ask me about staying asleep. [announcer] tempurpedic owners are more satisfied than owners of any traditional mattress brand. Tempurpedic. The most highly recommended bed in america. Now sleep cooler with extra cooling comfort on our bestselling tempurbreeze beds. Visit tempurpedic. Com to learn more, and find a retailer near you. Take a look at industrials today. One of the biggest winners on the s p and to the extent we have very many, sheila is back at headquarters. Remember, this was one of the weaker sectors last week. But the big reason we are seeing nice green spot is caterpillar. Its in fact the strongest performer on the index. The giant reported better than expected Fourth Quarter profits and sales. Also announced a 10 billion buyback program. Investors liking that news. Also in the news is honeywell, textron and ingersollrand. After last weeks market volatility, some are expecting we could see a change in the feds bond buying program. Our man, Steve Liesman is back with that. Nor currency volatility or a weak december employment report will stave the Federal Reserve policymakers from their not so swift qe3 this years. Everyone thinks the fed will taper by 10 billion at this meeting. And probably continue for the rest of the year. Heres the way of thinking about how the fed considers a crisis like this. First, does it change the forecast for growth, inflation and unemployment . Answer, probably not. Second, does it represent Systemic Risk to the Financial System . Again, answer probably not. And, third and finally, are underlying macroeconomics troubling . Officials i spoke with see the events of the past several days as more episodic than upheavals and long standing changes within the policy. They add theres a big difference in the selloff compared to earlier this year in may and june where the countries affected will be connected. Some will have very key elections. Most of these elections have a high level of uncertainty attached to them. Indias having elections, turkeys having elections. Brazils having elections for just to name a few. These are all very complicated. Thats bob former treasury at goldman sachs. External debt as percent of gdp. You can see the rise for south africa. This is the external debt, the debt in dollars for example. And turkey, you know, pretty much consistent. No big change. And when you look at relative to the tenyear average, percent again of gdp, some quite a bit higher, some just a little higher. This is fed chairman Ben Bernankes last meeting after eight years as fed chair. Janet yellin takes over as chair on february 1st. Her first meeting will be in march when there will be a press conference. I have to think far more than the ar genergentina pe so fe likely to address through guidance rather than more or less qe. We want to stay with the fed. Our next guest saying its likely the fed will use framing Interest Rate guidance as a tool to address whats going on in markets. The chief economics correspondent for the wall street journal. John, great to see you. Great to be here. I wonder what kind of conversations you think the fomc might have had over the weekend watching what happened to the markets on friday . You know, i think they talked about it. Jong theyre going to be very alarmed by it. Obviously its going to come up, its going to be part of their discussions tuesday and wednesday. But i think steve laid it out, i think he hit the nail on the head. This doesnt look like something that is going to fundamentally change the feds forecast for the economy. And looks like something that really is a systemic problem in the u. S. So i think they stay on the course that theyve set out. Which is interesting, jon, because if this were a fed that was in 2011, 2012 maybe even looking at an unsteady global growth, markets might say better safe than sorry. This doesnt feel like a better safe than sorry fed anymore, is it . Well, no. In part because they think the economic backdrop is improving and that its not getting worse. You know, we saw a pretty decent pickup in Economic Growth in the second half of last year. And they think thats going to carry through into 2014. You know, the headwinds that really worried them last year were things like fiscal policy in the United States. That looks like it will be less of a headwind in 2014 than 2014. Thats why i think they look past this. The other thing about the selloff were seeing in emerging marketing is, you know, its only been a few days here in which it was really intense. I think you have to see more evidence that its long lasting and systemic before it really gets your attention. At the same time, steve, did we learn something about the global Financial System . And did we learn that its in facted overleveraged or perhaps too much hot money, however you want to describe it . If im the fed and said before im worried about financial stability, do you think this is part of the fed testing the the markets here as much as markets trying to test the fed especially under the new incoming chair . I think thats a great question, kelly. I think the fed is prepared for and thought about what kind of reaction it will get from emerging markets. I think the reaction is not a total surprise to them. I dont think it is to guys who really follow these markets. At the same time its really hard to know what the leverage is. I dont think weve progressed to the point where i think we can see for example theres x amount of Systemic Risk in the u. S. Banking system or the global system from leverage trades in argentina. One way you can look at it is through price action. I dont think the price action so far, i have to underscore, suggests that there is tremendous leverage out there in the carry trade. There are people left unwanted positions and one of the interesting things is bernanke said from the may selloff that he was pleased with one aspect of it is he thought it shook out some of the excess leverage in the system. Exactly. Jon, what do you think about that . Again, i think steve is right on. I think one of the Big Questions right now is whether the markets really did shake out all of that leverage last year. Theres a question of whether investors put it back on as we got into this tapering and they saw that the markets were behaving. Maybe they relevered on this. I think one of the things that people cant forget is that, yes, the fed is pulling back on this bond buying, but theyve said that were going to have Interest Rates near zero, you know, probably into 2015. And then even after 2015 theyre going to stay very low. I mean, that really encourages risk taking and leverage far out into the future. And i think thats something that theyre going to have to watch very carefully. Steven, walk us through the degree to which the fed is probably communicating with Central Banks out of turkey and argentina. There is communication, but im not i think the communication is basically, look, were going to pursue our policy that we believe is best for the United States. And we understand that pursuing a policy that iss inorder nantl damaging to the Global Economy is not for the u. S. But i think theres been a consistent message. That message has come more so from Christine Lagarde from the imf who has come forward and said, you know what, guys, dont waste this time that youve bought with quantitative easing to not reform either your Monetary Policy or your fiscal policy. I think thats one of the dangers here thats probably coming home to roost is that they havent used that time to reform their policies. And so there is going to be some knockon effect from the tapering here. Im not sure the fed chairman goes on the phone with the Turkish Central Bank and says were going to change our policy because of whats happening in your markets. I think theres a debate that underlines whats going on among central bankers. A lot of the emerging market central bankers have pressed the fed over the last couple years. They were unhappy with qe2 and qe3 because they thought it created hot money flows into their markets. Right. And then they were unhappy when the fed said they were pulling back because they thought it was pulling hot money flows out of their mashlgts. The central bank of india has been arguing this for a while that the fed needs to take into account the global spillovers their policies it needs to be a bigger factor in their thinking. But bernankes argument all along is you have to take care of your own business. Were taking care of our own business. And, you know, its your responsibility to take care of your domestic markets. And i think thats the feds attitude going into this meeting is that, you know, if chinas got growth problems right now, well thats chinas problem. And if turkey and these other Central Banks have problems, then they should have been more aggressive about managing their whatever imbalances they had a couple years ago. Sounds like a game theory problem. Jon, great to see you. Steve, thanks so much. Well move on as we watch these markets try to make heads and tails of all. Thanks, guys. Meantime breaking news regarding an Early Exchange operator at bitcoin. Hey, carl. The department of Financial Services of new york holding a twoday hearing on bitcoin tomorrow. U. S. Attorney of the new york Southern District announcing charges against two individuals, robert faella and charlie shrim, an underground Bitcoin Exchange, shrim is the Compliance Officer of Bitcoin Exchange company. They are charged with engaging in a scheme to sell over 1 million in bitcoin to users of silk road, which is an underground website that allowed some of its users to buy drugs and engage in other nefarious activities. The two were conspireing to commit money laundering. We want to note that cnbc did interview shrim a while back because he was part owner of a bar that had started accepting bitcoin, this was some time last year. But again, two individuals charged in that scheme. Back to you. Thank you very much, Mary Thompson on the floor watching that. Jon joining us onset. From u. S. Attorney, its a startling collision between this new cyber currency and the underground world of illegal drugs. Its a really puzzling moment, i think, for bitcoin. On one hand you have folks like noted silicone entrepreneur and on the other hand you have silk road and things like this, actually the Company Charlie shrim was ceo of, i believe the winkle vos twins back in their investment. They have an heir of legitimacy whatever you think of facebook. So you have this good money, names that we know excited about bitcoin and then things like this happening and silk road and questions about just how much bitcoin is involved in this murky underworld of not so straightforward transactions. It will be very important i think for the future of this currency to see how this turns out. And the statement says truly innovative Business Models dont need to resort to old fashion law breaking and when bitcoin or any other untraditional currency are used to fuse criminal activity, Law Enforcement has no choice but to act. I think this is always the way with technology, right . There are lots of different ways to use it. Well have to see how some of these backers like an drees and har ro wits come behind this and build some legitimate businesses on top of bitcoin to restore confidence and maybe even add some confidence to whats going on here. I think just these companies, your subways, your Car Dealerships accepting payment in bitcoin isnt going to cut it to really push this currency forward. And we are having new york with their hearings regarding the currency, which i cant imagine its timed to coincide with those. Its so interesting. The arrest happened last night at jfk. Interesting. Thank you very much, jon fortt. Well continue to try to make sense of that story. When we come back, this was not the luxury many people hoping for, Royal Caribbean ship explorer of the seas returning to port two days early after an outbreak of a gastrointestinal virus overcame the passengers. Well talk with the ceo exclusively in a couple minutes. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Yeah. Try new alka seltzer fruit chews. They work fast on heartburn and taste awesome. These are good. Told ya im feeling better already. [ male announcer ] new alka seltzer fruits chews. Enjoy the relief cozy or cool . Meow or woof . Everything the way you want it. Until boom, its bedtime and your mattress a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes a softy. His sleep number setting is 35. Youre the rock, at 60. And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. We talk a lot about etfs here on cnbc, but for the uninitiated, what does an etf do and why should you consider owning one . Bob pisani is live from the etf conference in hollywood, florida. Good morning, bob. Hey, carl. Im in etf heaven. 1600 advisors here, all the big etf players. If you dont know a lot about etfs, theres some good reasons why you should consider adding them to your portfolio. Heres why. An Exchange Traded fund or etf is a fund that holds stocks, bonds or commodities. Most etfs track indexes like the s p 500. But you can invest in almost any asset class, tech stocks, industrial stocks, municipal bonds, japanese stocks, physical gold or silver. The big attraction is that unlike mutual funds etfs trade like stocks and can be bought and sold during the trading day. Etfs are also more tax efficient and usually have lower costs than mutual funds. Thanks to these advantages, investments in etfs have surged in the last few years. At the end of 2013 there were a little more than 1300 funds in the u. S. With a combined value of 1. 7 trillion. Thats only about onetenth of the money in mutual funds, but its jumping quickly, up 26 last year. Trading in tefzs are growing fast as well. They now account for 15 of the volume of stocks listed across all exchanges. So let me tell you whats hot at this conference. Two, three things are really hot. Number one, who do you do with emerging market etfs . Theres a lot of questions here that put a lot of people into these market etfs, and theyve been very successful but theres questions about how long that can go on and whether were in for a move to the downside. Interest now is currencyhedged etfs. Remember that dxj . Japan hedged etf last year. That was really popular. Deutsche bank is getting a lot of inquiries about the series of hedged currency etfs they have in mexico, south korea and other emerging markets. Thats a hot topic. Second big topic, actively managed etfs. Weve talked about it for a few years, but the managers dont want to show every day what kind of holdings they have. They hope the s. E. C. Will make a ruling in the next few months allowing them not to publish every day what their holdings are to hold for a short period of time. Finally, pimco Just Announced 19 new funds, carl, whole mix of emerging markets, some also in bonds and some in the equities area. Ill get you a list of that very shortly on trader talk. Back to you. All right. Bob pisani in etf heaven today. Thanks so much, bob. Markets are closing across continental europe. Its about 11 30 on the east coast. Worries about emerging markets and disappointing Corporate News combining to weigh on stocks. A pair of british blue chips dragging the ftse to fiveweek lows. Bg group tumbling partly due to some turmoil in egypt. And as for vodaphone, it does not intend to bid for the mobile operator, that in response to speculation about a potential deal. Speaking of m a, john malone acquiring zigo for 13. 7 in cash and stock after ziggo rejected an earlier offer. We know malone has been interested in europe for a long time. The data out of germany, carl, was stronger than expected today. Not doing too much for the market there though. Coming up, Royal Caribbean making headlines after one of its ships had to turn back early. Today, Royal Caribbean stock rallying after reporting strong earnings in the Fourth Quarter. Its up almost 2 . Could this latest news overshadow that . Well ask the ceo of Royal Caribbean in a cnbc exclusive in just a moment. [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. With markets under pressure here, we do want to move to argentina and turkey. Each of these countries getting hammered lately. If the trend continues both economies could be in major trouble ahead. Michelle carusocabrera is back at headquarters with more details. Two countries of the corner stone of the selloff that started last week. The turkish leer recovering a little bit today. Remember when you look at these currency charts theyre a little counterintuitive. Youre looking at a chart of a dollar versus leer. You can see the dollar getting stronger and stronger and then peaking early this morning. Switch to the twoday chart to explain what happens next. Like i said the dollar peaks, the leer bottoms early this morning. As soon as Turkeys Central Bank announces theyre going to hold an emergency meeting tomorrow and they will announce the outcome of that meeting at midnight in turkey. Why . Because thats 5 00 p. M. In new york after the u. S. Market closes. Put that on your pile under tomorrow 5 00 p. M. Eastern time. The reason the currency is strengthening now because of that announcement, its assumed theyre going to announce a hike in Interest Rates, a big one. Anywhere from 2. 5 , some economists hazarding the possibility of a 4. 25 hike from current rates of 7. 75 . Overnight anywhere between 10 and 12 . Arrange tina were waiting to see what happens today because its the first time in two years arj tines can go to a bank and get dollars rather than having to buy the dollars on the black market. The central bank has allowed the official rate to weaken so much that once you add in the 20 taxes, the cost of the u. S. Dollar either at the bank or on the black market pretty much equal to the official rate. Why on earth do argentinas want to own dollars . Because as you know, carl and kelly, for years that economy has stunk so bad the currency is horrendous and much prefer to hold dollars which they have a lot more confidence in. Thats true, michelle. As you say these are two countries that are going to be the focal point for people not necessarily because they themselves represent any kind of con teenageon, but a litmus test. Absolutely. Michelle carusocabrera back at headquarters. Lets get to Rick Santelli in chicago. Looking at key levels here, rick. Absolutely. And thank you. Three widely followed markets, the s p, shanghai composite and gold market. One widely followed technical analyst, tom demark. Tom, welcome. Take it away. Great to be back, rick. I appreciate it. Thank you. I think on october 9th we came out with a release comparing the stock market at that time with 1929, the august 9th low. We forecasted 12 move and on the air december 19th with you we forecasted the top of january 14th. As it turned out the s p cash topped on january 15th. Whereas the dow jones average topped on december 31st. At that time we said that the we had identified a comparison which seemed to be pretty correct at the time. We still feel that way that the dow jones 1929 and current markets were almost in overlay. By reality a 12 move they were exactly an overlay. Now we want this to be very critical. Weve got to watch this decline. Its unfolding as we expected. What weve got to monitor very closely is 1767. 20 on the s p cash and 1762. 20 on the futures. If we were to break those two levels in unison ideally with the prior close being an up close, the prior day to the break being an up close, then weve got something that looks pretty significant on a downside. Were still qualified. This is the most critical stage. Weve had three swats or three attempts at the pinata on this move up in the last year and a half. All three times we suspected a top the market unfolded quickly, sold off but then recovered. Well, tom, lets switch gears here a little bit. Now, you are spoton and i think that chart gives me the chills going back against 29. Give me something on the shanghai composite here quickly for viewers. Okay. December 2012 to the exact date of the low we called the bottom on the shanghai index on december 4th. Subsequent to february 6th high we called the high. We were looking for a 48 rally, we only accomplished a 25 . We adapted to the supplydemand of the market. We forecasted the decline into the june low, the day of the low in fact, we identify what we call a 13. So it was perfect through those three points. And in fact the september high was called right to the day. Now, last week last sunday we identified a bottom, potential bottom. We think the shanghai still go down to 1959. We think it will hold. Were confident it will hold. People are correlating that the with the u. S. Markets. Theres really no correlation. Tom, theres never enough time. Were going to have to stop there. Were going to bring you back and concentrate only on gold. Squawk on the street gang back to you. Thank you. Shares of Royal Caribbean rallying today, but there may be trouble on the horizon. The ship explorer on the seas is returning to port several days early after over 600 people got sick with a gastrointestinal virus. How much of an impact on the company could that have . Well ask the ceo in a cnbc exclusive in just a moment. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. Coming up at the top of the hour, the emerging market threat leading to heavy losses last week, so what now . Well, weve assembled a panel of experts including Energy Expert mark fisher to help answer the most important questions you need to know. And we are trading apple with only hours left ahead of its Earnings Release this afternoon. Shares of cat flying high today, but is the company too focused on china . We have a full and a fair battling it out over cat. Its all straight ahead at the top of the hour. See you in about 15. Sounds good, scott, thanks. Royal caribbean reporting forty quarter earnings that did Beat Estimates this morning and delivering upbeat guidance for the year. Could that be overshadowed by the news of an illness outbreak on one of its cruises . Richard fain, the chairman and ceo of Royal Caribbean, richard, great to have you. Thank you so much for coming on. Thank you, its good to be back. I want to get to the quarter in a second, but is there an update on the explorer of the seas either from you or the cdc this morning . Well, yes. It was a very unfortunate incident, of course. Were lucky that its so rare and our people responded very quickly, very aggressively. And so now the issue is waning. It is coming back early. So we have a chance to really do a thorough cleaning. Obviously we will be compensating the passengers. Our people really do feel very badly that Something Like this happens, but unfortunately this is a bad time of year. I went back, the cdc keeps a list of all the outbreaks that qualify as being basically major outbreaks. And i went back over the past few years. In 2009, 15. The next year 14. 14, 16, 9. I mean, this is happening with some regularity, when if ever is it going to have a Significant Impact on bookings . Well, i dont think it has a big impact on bookings because most people understand just how common this thing is. Its the second most common illness in america. Of course you up in the north are having bad weather and the winter this kind of thing does occur. Unfortunately, an outbreak is defined as only 3 of the people. And its still a very rare occurrence. So we dont think its going to have a big impact on our year. And we just released our expectations for the year and theyre looking pretty good. And, richard, just to talk about that for a second. A lot of people have been looking for an Inflection Point, i guess, both in the u. S. Cruise industry and for better trends out of asia. I just wonder as we look at a china which continues to defy those growth expectations, struggle a little bit with demand internally, how confident are you that there will be a growing a booming market for cruising in china and across asia . You know, asia has been one of our big Success Stories. And were not really dependent on the overall growth of china per se because cruising is so new. So youre starting with something were getting great growth, but were starting from such a small base that the middle class thats already grown there is more than sufficient to absorb us and continue to grow at very high rates. I think china is one of our big Success Stories in 2013 and 14 looks even better. What about though i mean, we know there are lots of airborne illnesses, viruses that have come out of asia over the last decade or so. We know that there are a lot of concerns about air quality and about health generally. So if the u. S. Is struggling with these outbreaks on cruise ships, how do you know that consumers or cruisers in china wont be sometitymied by their concerns that theyre going to get sick . The good news it is very rare here and its very rare there. And the chinese of course are very conscious of all kinds of safety issues. But the beauty of cruising when it comes to health and Everything Else is its extraordinarily safe. It has an amazing track record. So they are comfortable, they are booking the cruise. They continue to do so. And i think as we look at our current bookings and our forward bookings, we think this is going to be another truly strong year in china, and actually the rest of asia. We shouldnt only focus on china. Australia is a very powerful market for us. Hong kong has been terrific. So the whole asian area is a Growth Market for us. Even when we dont see an impact on bookings, sometimes we do see a short impact on pricing. And i wonder if you think 2014 will be the year where because of these outbreaks you do have to give customers a little bit more of a break than youre used to. I think what were seeing is people think that when these things do happen, we react quickly and aggressively and we compensate very fairly. So were really not expecting this to have a big impact. The timing is unfortunate. I think if we were doing this on anything other than the day that we are having our earnings announcement, we probably wouldnt be having this conversation. Is there will there be any attempt to i know when you take a cruise you basically have to testify that you havent been sick for a certain period of time leading up to that cruise. Is the screening of passengers going to have to change over time . Well, we do screen our passengers to the extent we can. But you live up in the northeast. You know how difficult it is. Illness, particularly in the wintertime, is a factor. Its a factor of life everywhere. The cruise ship is maybe a little different because people are more aware of it because we report it better. When you go to the Movie Theater and you get ill, you dont report you got it in a Movie Theater, so that distinguishes us. But as a practical matter we do and we will continue the screening, but the real thing we do is we do an amazing job of helping those guests who do get ill of cleaning so that the likelihood of contamination is low. And i think people recognize that. And, richard, just quickly as well, cant let you go without asking about the u. S. Consumer here in the early part of the year as were, you know, markets casting around for a little bit of direction, what can you tell us about the demand trends that youre seeing . Well, we actually think that we are a good indicator of whats happening because this is our biggest booking period. And if people are feeling good, theyre booking their cruise, we book fairly far out in advance. We start the year with more than half of our year already booked. And januarys been a big booking year for us. And its been a solid booking year so far. Its off to a decent start. Were seeing people who are booking and i think that does well not only for us but i think it says that the consumer is feeling good, is making purchases, is looking forward. And i think that probably well for not only the cruise industry but also the economy as a whole. Richard fain joining us from miami today. Richard, thanks so much for your time. Thank you. I enjoyed it. When we come back with the dow down about 18 points this morning. Not quite to the session lows, but well see. Long afternoon session ahead, kelly. We have given up those early gains. Trading in mixed territory across these major indexes. Is this the end of the pullback . Or is it continuing . The one and only art cashin is here. Well have insight next. We know were not the center of your life, but well do our best to help you connect to what is. Fifteen minutes could save you fifteen percent or more on Car Insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. Stocks are mixed this morning after dow posted its biggest decline in the last two years. Never thought wed say thank goodness for caterpillar, but we are. It is. Its a saving grace. Well, weve got a couple of saving graces. As a matter of fact, one thing the viewers should keep in the back of their mind for the next two weeks is that the polar vortex, the big freeze up north, its turning into a get out of jail free card. Even the housing data this morning youre already hearing people say, well, part of it is the big freeze. Youre going to get a free card going into the payroll number. An excuse. Its the perfect excuse. And nobody can rebut it. Anyway, caterpillar as you say is helping. A bit of a strange market. The tenyear and dollar index were both virtually motionless this morning, which tells you that the crisis was not continuing to spiral. Also other currency markets were flat. Equity markets throughout still look at people trying to pair risk. I want to cut down my risk. Im not certain that everythings there. And thats where we are. So i would watch the tenyear as a signal that maybe this could turn into something bigger. You know, futures at least for the dow, the s p too actually, we opened up okay and weve sen broken down. I wondered if that was the new home sales report or is Something Else going on . Was partly the new home sales report, but weve developed a kind of pattern recently in 2014 where you open and even if you open better, it tends to get wasted. And as you move into the european close, prices go weaker. Weve bottomed around the european close several times. Will be interesting to see if they do that again today. Great point, art. Thank you so much for joining us this morning. Art cashin. Check out shares of twitter in the meantime down big this morning. Well try to explain whats going on here and with some other social media names when we come back. Keep it right here. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. 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. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Some Brokerage Firms are but way too many arent. Why . Because selling their funds makes them more money. Which makes you wonder. Isnt that a conflict . Search proprietary mutual funds. Yikes then go to e trade. Weve got over 8,000 mutual funds and not one of them has our name on it. Were in the business of finding the right investments for you. E trade. Less for us, more for you. The funds prospectus contains its investment objectives, risks, charges, expenses and other Important Information and should be read and considered carefully before investing. For a current prospectus visit www. Etrade. Com mutualfunds. Cozy or cool . Meow or woof . Everything the way you want it. Until boom, its bedtime and your mattress a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes a softy. His sleep number setting is 35. Youre the rock, at 60. And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. [ car alarm chirps ] [ male announcer ] we dont just certify our preowned vehicles. We inspect, analyze, and recondition each one, until its nothing short of a genuine certified preowned mercedesbenz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedesbenz dealer for 1. 99 financing during our certified preowned sales event through february 28th. Take a look at shares of twitter. We know its volatile, but thats an interesting intraday chart here down almost 8 to 57. 10. Talked with jon fortt earlier in the hour about some metrics coming out from adobe about social companies in general. But seems like february 5th when they report is a long ways away still. Is aays away. And those numbers from adobe are actually promising for Companies Like twitter that could stand to monetize more. Basically saying when people click through, not necessarily on an ad, but on somebodys tweet about a product, those people actually tend to buy. But im looking at a lot of the stocks i watch and name off a few, workday, splunt, linkedin, rag space, open table, jive. All of those down nearly 3 or more. A lot have to do with the cloud. A lot have pretty lofty valuations. So not exactly sure whats getting all of those down, socl is down quite a bit, the social media etf. Maybe thats to do with it. But rough day for them. Have to watch that and your emerging markets and currencies this afternoon. Youll just have to stay tuned. And apple by the way. Fortt will be rejoining us, those hit around 4 30. Of course well send it over to scott wapner who will take over with the halftime. Lows of the day still feels like a sell first market, doesnt it to you guys down there . All these dips were being bought last year. Not a lot of buyers out there yet. Still waiting for them. Yeah, cramers point this morning was for those who couldnt get out on friday they took this morning as another chance. And clearly that led to some weakness today. Yep. Were at the lows of the day right now. Guys, see you again tomorrow. Thanks so much. Welcome to the halftime show. Were following big stories on the street today, core holding, what will apple deliver after the bell and will it be enough to jump start that stock . Big cat after earnings beat expectations and the stock rips, what happens now to this battleground name . Perfect storm with nat gas