U. S. Equities and we are at this point at this moment the dows down about 3. 3 from its most recent peak. The nasdaq the russell, the s p all down a like amount right now. Lots of key levels to watch today. The fact below 50 in wti crude, some of whats happening in the rate space and waiting to talk about that but again were starting off the year in a trading session that people love to extrapolate for moves from here on a weak note. It goes without saying this final hour will be very instructive. Do they start to buy on the dips . They havent yet. Or do we get even more selling come into the picture in this final hour . As mentioned, as we get into this final hour underway here the dow off 340. Nasdaq off 1. 7 . The s p off almost 2 and biggest decliners in the dow are energy names and also the financials. Theyre also a Big Industrial name like caterpillar and a lot of other companies with international exposure. Last we checked two components of the dow are positive. Merck and cocacola. Interestingly enough. Lets go to the exchange and spend sometime with these folks. As we begin the new new year cathy jones with us here today and ron wiener. Kenny pulcari. Eric restabin and mr. Market himself Rick Santelli in chicago. What do you make of this rollover we see today as we mentioned . We mentioned really began in earnest this morning in europe. Whats going on is extremely significant with regard to whats going to make a change. Next month, next quarter, three quarters from now. I think the news out of europe isnt going to change dramatically in a positive fashion any time soon. And Mario Draghis going to be front and center stage. With respect to energy hey, investors paid for technology that resulted in much lower prices for everybody. And if they go bust the technologys still there and a company after them will buy it cheaper and a company after that buys it cheaper. I think its the gift that keeps on giving. Investors, thank you for investing. But sayonara. Middle class shouldnt care. They were sayonarad for two or three years. I will tell you this. If were going to go test the alltime low close at 138, i would have to say that bund yields going negative for that to happen. If you hadnt heard, jeff gunlach in los angeles earlier today saying that even if the fed starts raising rates early in the year short rates, he could see the bond year on the 10year yield go to 1. 38 this year. Cathy, what happens if were in that situation as today where the longer end of the curve isnt budging or moving lower . Yeah. I think people forget that this is happened twice before. This is the third time quantitateive easing as ended and i think its because when the Central Banks are butt l liquidity in people go to risk assets and very optimistic Inflation Expectations go up. When they pull back on that liquidity, particularly the fed, the central bank of the world, when they pull back rates did down and Inflation Expectations tumble and then we had the soaring dollar falling oil prices. Its all just come together to lead us to these lower yields. Kathy, whensats the diagnosis . You mentioned inflation. Other investors say that shouldnt be the concern here. In other words, what should an investor trying to figure out whether to make the investments based on a 10year next year what are they supposed to do . What conclusions to come to here . Well, i think the signal from the market is really coming from the flatter yield curve so we have deflation in parts of europe and overall now the core is getting closer and closer today. Germanys numbers closer to no inflation, deflation. So the deflation issue is more abroad than domestically but an investor needs to focus on if youve been in the bond market in the morris i can sectors of the market that got very overvalued because the riskfree rate was 0, even though the riskfree rate is going down the risk of the fed is the rate is going up and you have to reprice those asets. Kenny, second trading day of the year. Friday was the first. But heres the first full week an were seeing decided weakness. Everybodys back at the table. Right . What im curious to see is not seeing like this really big pickup in volume. Not seeing a panicky capitulationlike trade yet. When you see much more activity and activity on the downside and today would be one more concerning and i think its kind of a reassessment. People looking at the last two weeks of december. The market taking the new highs once again on low volume and so trader types push the market to maybe levels where it should not have been and no reason to come down. Right . Everyone was so happy about the end of the year and it was a good year and blah blah blah. Now i think what youre getting is kind of reassessment. Certainly europe and greece are not helping the situation by any stretch. And so therefore, when you have that negative tone it overflows across all sectors and what you are seeing today. Eric in light of the Fund Flow Data we have interest in equities last year and especially in the last couple of weeks, what do you make of that . Well, i think a lot of people are attracted to equities because i think on balance its a good story for equities. The central tension seeing play out today is the one of the u. S. Versus the rest of the world s. The u. S. Strength going to capitulate to the outside of the u. S. Or the rest of the worlds economies get better and join the u. S. In a strength per perspective perspective . We think thats whats going to happen but we think equities is good investment. Shortterm volatility we had a lot of signs in midnovember and beyond that the market was overbought. So i would expect a lot of choppiness in the short term and eventually the actual fundamentals prove out and see a good year in equities. Whats the endyear target . 2150 which gives you an expected rate of return on the s p 500 right about 7 with dividends included. Ron wiener it became very much envogue the last couple of weeks as people making the prognostications for 2015 to say buy europe now. We see value there. At this point. But the dax, lost about 3 this morning. That is not the beginning not the trend per se. Its one big day of selloff and what do you make of that . Are you inclined to lookover seas for better value than here . We say stay in the u. S. I have no idea whats going on in europe. I dont trust their Balance Sheets how theyre marking to market their bonds. Their government bonds. Stay in the united states. Listen. Bull markets dont die of old age. They die of overvaluation. They die of euphoria. I dont see overvaluation. I see solid valuation but not overvaluation. I certainly dont see euphoria. I think like last year and the year before we dont see 10 dips. I think theres so much money chasing the American Market now that i think its a solid place to be and companies are not doing badly. U. S. Companies. You know . Its the market that changes. The companies are strong. It is a good point, ron. Listen. Again, people shouldnt confuse market prices with the value of the investments. Wheres value . Give us names or areas that come to mind in this market. Sure. Again, we dont see anything dirt cheap. The only thing that is are dirt cheap is maybe sifting through the mlp market. Emp companies way too cheap. Pipeline companies way too cheap. Other than that you need 12 to 24month time horizon for that. Other than that we think plenty of companies. Does that include oil at these levels or does that predicate some kind of rebound . Because thats a risk here on a recommendation. Rigs will be shut down. Well end up having more supply and start them back up again. What we think is youre better off in the mlp in the pipeline space where youre getting paid very handsomely just to sit through. We think thats great. However, i think technology is probably the place to be and health care. Banks are a little bit suspect right now depending on the Interest Rates. But technology alibaba, Companies Like that geez theyre going to rule the world in about ten years. You can hold it for a listening time. National average for gasoline in this country down 102 straight days. So i did the math this morning and by about march 15th gasoline should be free in this country. If this continues. Good news there. So will stocks if we have days like this. Rick santelli euro tanked this morning and already the dollar at 11 1 2year high i think it was. I mean are we stretching it right now . Is this just more of a continuation of the trend, do you think . Well i think that the u. S. Is one of the few economies right now thats weldy verse if ied. So on the Foreign Exchange side you look at canada australia. Onetrick ponies with the energy and commodity sectors. It is a positive dollar story because the rest of the worlds currencies cant stack up with the economy behind the greenback. Think of where we could be without impediments. Maybe the new congress will work on that. Thats coming. Well work on that in the next block in fact. Stay right there. We have about 50 minutes to go here. The dow off 336 points as mentioned with just a couple of green spots in an otherwise sea of red out there. The s p off almost 2 . Nasdaq down better than 1. 5 . Much more ahead on the selloff. Is it really about oil, europe . Well talk about a lot more coming up here in a moment. Stay tuned. [ male announcer ] your love for trading never stops. 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For a free quote today,call Liberty Mutual insurance at see Car Insurance in a whole new light. Liberty mutual insurance. Welcome back. Checking in to see how the markets been doing today, you miss add barn burner much of the trading session. Near the lows. Weakness in european markets, weakness in crude oil, closing around 50 a barrel and then electronics session continued below that. That takes us to lows we havent seen since april of 2009. And the s p 500 index, this is all 500 components just a few, the top line basically, with green. The rest of it is all red, kelly. For sure. We are adding in bob pisani here at the new york stock exchange. Bob, well start with you. Which jumps out to you . Wheres the buyers buy the dippers . Macro themes that worked towards the end of 2014 continuing to work into 12015 and traders go with the trends. Weak euro strong dollar. Number two, you have problems in the Energy Sector so short the euro. Short europe. Short a little Global Growth and short energy. I mean the energy names, its breath taking the declines in the estimates. 2015 estimates down 21 compared to 2014. A month ago supposed to be down 3 . I havent seen a collapse inest mait estimates since when . 2008. Bob we showed that chart last week about the correlation as oil going lower and stocks and then suddenly theydy diverged. Is oil good for the market . Well, i think the question netnet, we think low oil prices are good for the u. S. Economy. We think its good for the globe. The biggest risk that it presents is that with this kind of oil priceing, you have Political Tension in oilproduce oilproducing nations srks that a problem, you know, maybe not a question of what if a countrys going to have a problem, its what country will have a problem and does that actually have a contagion effect . Probably not. Ron, this goes back to your point of u. S. Companies and so many have international exposures. Are you looking to the small caps . We are light in small caps. We are global and small in foreign and small caps but its more for safety. More not to take the risk of dropping a lot than it is for going up. We look smart for doing it but it was for safety. The gdp about 14 from exports. Its important. The dollars probably just as important that u. S. Companies we think the multinationals will not do as well as they could otherwise do if europe wasnt going down. But we ceos did a great job of managing that. Our bets still on the apples and microsofts and the companies that do a lot of exporting. Asias still growing. A big misnomer is china may only grow at 5 but it grew 11 , 12 , 18 , you know 9 7 . You compound these numbers on a billion people and thats a lot of customers so the numbers are still really large. We think the apples and companies do well. Maybe not as well because of the global economy. Still good. Kathy, are there parameters you are watching in terms of the yield curve . Could you see 1. 38 . Thats extreme on jeff gunlachs part. Were at 2. 03 on the 10year. Right. Below 2 and much lower then or what do you think . Yeah. Below 2 presumably, i think part of it is because the high yield market is really adversely affected by the drop in Energy Prices so about 15 of the index is Energy Companies and why the spreads and you get a flight to safety probably in treasuries. Maybe 1. 82 the next target. Thats extremely. Still optimistic on the economy. Its just the inflation picture that has changed a lot. Kenny, what is the focus of the guys on the floor here . What do they follow most closely and how much talking about a january effect . Not so much the january effect but really next week starts earnings and people talking about earnings and you have friday and thats always a big number but really the look forward is going to be about three things earnings ecb and greece and the stronger dollar and mean and analysts did a good job of reworking the numbers. Big Multinational Companies make up half of the s p 500. You shouldnt be surprised, right . Only be surprised in the Forward Guidance now based on the very uncertain situation in europe and greece. Walk us through the last 40 minutes here. I mean do we see we getter get the buy the dippers or selloff more here. It doesnt feel like the buy the dipper guys are here at the moment. It feels lethargic and heavy to me and a day like this you have the buyers that see, they see how anxious the sellers are. Theres no reason to come right in and buy it. If they wait and patient, the sellers come to them. Thfr, i think thats what youre going to see. Bob . I think kenny hit on an important point here. What will change the conversation . Stability in oil and in the dollar. Thats the obvious answer. But beyond that i think some kind of commentary once the earnings situation comes out from a lot of company that is are doing better because of lower oil. Theyre lowering the estimates for energy we know that. Nobodys raising things much for consumer names and the transport names to benefit of lower oil 689 i would like to hear about that in the coming weeks. Great point. Thank you all. See you later. Thank you for your thoughts on the markets today. We have about 40 minutes left. See what happens. The dow down 331 points near the lows for the session right now. And you see see two components in the industrials and positive. Everybody else negative. Cocacola and merck. Look at caterpillar down almost 6 . Certainly theres a downgrade. Maybe im reading that wrong. 5. 7 is what i saw. Move over there and see what it is. Chevron, as well off 4 . Goldman sachs down 3. 5. Jpm and dupont as well. Big pressure. The dow posting the worst loss in a month and last time we bounced back right away. What will happen this time around . More on oil as it skids again dropping below 50 a barrel for the first time in almost 6 years. Find out how low the pros think crude could go and whether it will be freebie march 15th. Welcome back. 35 minute it is go here and pretty strong declines across the board. The dow down almost 2 today. Off 330 points right now as the s p gives up 36. The nasdaq down 71. Morgan brennan, a couple of minutes to tell us about the movers. Oh my gosh well begin with the big oil companies, all sliding as oil hits a fresh 5 1 2year low. Chevron, exxonmobil hesse, bp all names in the red today and a tough day for caterpillar, as well. Its the biggest laggard in the dow. Jpmorgan downgrading the stock. On the flip side Gilead Sciences sigher after cvs health core said it would give preferred status and that stock up about 2. 5 . Rival abbvie falling. We end with Isis Pharmaceuticals higher after Johnson Johnson said it would pay the company up to 835 million to for the option to license drugs for the bowel. Cnbc exclusive, isis chief dr. Stanley crooke will be a guest on mad money 6 00 p. M. Eastern here on cnbc. Back to you. Good stuff. Thank you very much. Contrary to popular belief the santa claus rally takes place during the last five trading days of the year and the first two of the new year. Got that . That means that today traditionally according to the stock tradersal ma al maal almanac, this is the final day. Make sure the kids are out of the room right now but this year, at least theres been no santa claus, virginia. Historically, it does not bode well for the markets. Talk about it. Jeff hesch with us and ed kian. Jeff, so how many times have we had this kind of a move and whats it mean for the future . Well i mean this is only a down santa claus rally in the s p about 13 previous times since 1950. It is not a death knell for the market. We like to combine all indicators and when all three are down we have only had one up year 82 after a big correction and otherwise, you know, four down three flat so its not a great sign but its not end. Would be nice to see positive action the rest of the week and for the month. How much weight, ed do you place on the