Bill theres plenty of attention on what a poorer start this trading year is off to and not just any day or two days to see this kind of pressure but the two days to kick off the year traditionally not a great sign. Two other markets very quickly. Oil, yes, we continued lower again. Big time. Down another almost 4 on wti. We are now at 48. It did touch the 47 range and brent is threatening to go below 50 at this point. Lets show you if we can the 10year yield. It touched 1. 88. At its lowest point today taking us back the lows of last october. Yes. On your screen there, you are seeing the 10year u. S. Treasury note below 2 . The 30year well below 2. 5 . I mean, we are talking about levels we havent seen since the financial crisis and there is a big element perhaps of whats happening overseas but lets talk about it in the exchange. Markets see the dow off 92. Nasdaq off 39 and s p off 11. Joining us in that said exchange today, margie patel, david kudlow jeff reeves Samuel Stovall and Rick Santelli with us from chicago. Sam, i am going to ask you that question i was mentioning earlier. You know the stock market is down about 3 plus in the last couple of weeks here. Why is that do you think . Whats going on here . Well i think that an awful lot of investors bought into momentum heading in toward the latter part of 2014. They a lot of active managers realized they were behind the benchmarks and so i think trying to squeeze out as much alpha as possible and then basely after theyve had all those good names put on their reports for the end of the quarter now i think theyre lightening up on the names. We are seeing concern creep back in obviously, regarding energy and regarding earnings. S p capital iq estimates calling for less than 125 in earnings for 2015. Wow. Thats fresh pressure on the energy space seeing across a bunch of names today. Jeff would you describe the drop in oil prices as a spring or as a trap for the u. S. Economy or markets . It is a big concern. The biggest thing is Energy Investment. We saw halliburton lay off 1,000. Conoco phillips is cutting spending by 20 this year. Thats a big deal. Talk about the research and development you want at amazon but the Money Big Oil spends on investment, jobs rigs thats real money in the real economy and from a macro perspective, its more than gas prices and consumer spending. A lot of fields in fracking they dont have the jobs there, north dakota hit, texas will be hit and we have seen that so my biggest concern of a macro perspective is Energy Investment to see dry up and a big sucking sound. Is that why the 10year hit 1. 88 today and the 30year below 2. 50 . What do you think that was all about . I think its a culmination of lower inflation. We have energy adding to that. I think its still a concern of flight to safety. The u. S. Treasurys most attractive security in the world. So much uncertainty. I think that draws more buyers and keep levels very low even lower than we are today actually. Do you think they are forecasting . When you see those are extremes right now relatively speaking the levels today. Are they trying to forecast a much Slower Economy here in the u. S. . I think its not forecasting a lower economy. I think its showing that market is distorted by the fed buying so many bonds. And i think that also it says inflation is not going to be an issue and it really says other Asset Classes are more attractive than treasuries. Rick heres fascinating thing of drop in inflation and Inflation Expectations pulling treasury yields lower. If this suspect a financial crisis, somebody better tell the market well thats not what i think is going on. Just look at bund yields at 44 basis points add 1500 an youre right exactly where you need to be in 10s. We could argue the motivation for europes rates but you know, we could talk about the old party line. Theres not enough inflation. And we could all jump to the notion that Central Banks need to save us from that dynamic but i continue to ask one question. What are they doing to reverse it . I dont see anything. Coming to mario draghi little doubt in my mind today the treasuries really werent about oil and maybe they were an indirect offshoot to the weaker equities. Everybody in the worlds equities are weaker except china. I think its what the ecb floated as to the three choices of qure. It continues to like highlight that theyre going to do something magnificent but when you throw out there that theres three possibilities and the meetings january 22nd, a, the market is nervous, b, speckulator speculators are flooding into the products and also consider tracking the bunds and negative rates out the the 5year. We do not. The yield curve. At a 1. 50 about in a 5year. Todays intraday low on the 10 was the same as 1. 88. It was 1. 11 in 5s october. So the short end is thinking the fed is telling us the rest of the story and the rest of the curve dont believe it. Or believe it or see negative effects from it. I think the negative effects are here. Whether the fed or any central bank can reverse them. What do you think about that david . Well i think that what were seeing in the marketings now is about investor psychology and along with what rick said, uncertainty right now. The trade to bonds i think to treasuries is a flight to safety trade. Based on when people are looking right now oil falling, 4 5 in a couple of days, we have oil crisis selling precipitating selling in equities. We look across to pond to europe as rick was talking about. We have the ecb meeting in january that i dont think that he can deliver anything near to what the market is expecting. Okay. So what ends this david . Understanding whens driving it what ends it . What ends it . See if today around 1 00 was the capitulation selling. Earnings start coming in. Aside from the problems in europe aside from oil, when earnings start coming in people look at the u. S. Again and say we have an expanding economy. We had a quarter of 5 gdp. Looking for better than 3 next year. We have growing jobs. We have increasing wages now. And earnings coming in. People will come become and say the u. S. Stock market is okay. And thats where you want to be. Speaking of that bottom at least for today that we saw around 1 00 eastern, sam, you think its time to buy . Are there any sectors you see attractive valuewise here do you think . Well, the sector likely to show the greatest Earnings Growth in the Fourth Quarter and starting in earnest next week is health care and a group that still has relatively attractive pe ratios obviously very strong Earnings Growth and is one of those areas that while investors try to beat them down as we saw last week week before in the biotechs wants to bounce right back. Health care is an area that we would maintain overweighting. Erp looking at the s p 500 areas of green on a day like this and, bill you often thats where youre finding them. The rate place. The you till is and finding them in health care after the run we have had. Jeff, a quick question to you. Do you think this sfreng in health care can continue . Are there concerns on the policy front as today we look at the inauguration of the Gopled Congress . I mean i think health care runs far long time in the short term probably the best of a bunch of bad alternatives to be honest. I think the demographic shift to the boomers pushes this. Obamacare is bringing customers in. I dont think the gop will gut it completely and its a tailwind thats pretty good for 2015 and beyond. Anything you would be buying here margie . Well i think the industrial sectors actually turning out to be a sleeper sector. People are very negative because of capital expend yours relating. Energy Services Goods but thats all wellknown and so the stocks are reasonably priced for the cash flow. They have a lot of levers to improve the cash flow and might be a surprise sector and do People Better than people worried about. Would you buy a caterpillar and becoming lately a favorite short of bigname investors . Im not interested in caterpillar in here. I think there are industrials more tied to process industries much more better positioned aenl not so directly related to farming and mining which i think are sectors under pressure. Other areas will have attractive returns. Including john deere or others that you can let us know about . Not really related to the Agricultural Sector no. Other parts, process industries. Anything that can improve efficiency in manufacturing i think will do well. Okay. David, what would you be buying here . Anything . Going into 2015 technology is our most famous sector. Still . We think still undervalued and will do well in 2015. And i agree with sam and jeff on health care. Its a defensive industry thats become more of a growth industry. Has done well and continues to do well. Obamacare just adding to gains, revenue in that industry. I have to tell you, behind the scenes kelly and i were just elbowing each other as you said technology. Highest Profile Technology stock lately has been apple with that tremendous decline. Its experienced in the last, what . Since late november. Since thanksgiving peaked and not looked back. Does apple look attractive to you here . Apple is attractive. Apple has come a long way since the reverse split and we have seen or since the split and we have seen a lot of the Technology Sector continuing to do well. We think apple has a good year ahead of it. Okay. There well leave it. Thank you for being here this afternoon on a session where markets are off more than 200. The dow off only we should say 82. A rough start to the day. A number of data misses. Now attention turning to earnings among other matters. We have had turnaround tuesday twice today. Right . Coming up, closely followed wall street strategist byron wien with us today. Hes not making predictions. Non predictions he is emphasizing. He says the s p jumping 15 this year and that was before the last 2 days he made that thought known. Not a prediction. Sticking to that call . He will join us ahead. Drivers not wanted. Mercedes with the selfdriving electronic driving car in vegas. Phil lebeau will talk about it. Is it a problem of insuring Driverless Cars . Cannot wait for that. How do you that . Tom wilson joins us from vegas coming up. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Welcome back. Joining us looks like just slight down day. What a day its been. Up 80 points on the open this morning for the industrials. Then midday a big selloff down 239 at the low. And now we have come all the way back here down 63 points. S p down about 9. Nasdaq down 34. Heres the s p 500 heat map. These are all 500 components of the Standard Poors index and you can see green to red. Mostly red, obviously. Talking about looking for the ports in the storm. Alibaba up 2 today. Twitter making a big move up 7. 6 so whos to say it doesnt pay to take a careful look at the value out there . Driverless cars making a huge splash at the Consumer Electronics show in las vegas. Where we find phil lebeau in the middle of the fun there. Mercedes with the self driving concept car. Tell us about it. Reporter its very cool. We had a chance to go for a ride in the vehicle. One of only crews in the world to drive inside this vehicle. The fo 15. A couple of features stand out. Fully aon the mouse. If youre in the vehicle, you wouldnt have to hold the steering wheel. It takes you where you need to go. Fully electronic. On the door panels are touchscreen panels to surf the web, look at video. Communicate over the internet with other people. Very cool technology. Built into this car. Earlier today we talked with mercedes ceo and asked him, is he a little surprised how quickly Autonomous Drive Technology has come along. Heres what he had to say. I would really say at least i expected five years ago. And today, our cars in the showroom are autonomous up to 18 Miles Per Hour and were waiting for the regulator to allow us to do more. Technically we are there. Reporter almost everybody that ive talked with in the Auto Industry here said the same thing. The technology is there. It is coming so fast that weve heard predictions of five years fully Autonomous Vehicles and a number of executives said quicker. It is a matter of whether or not regular lay fors and the public are ready for these selfdriving cars. Back the you. You know i guess the word autonomous is better than driverless car. Thats a scary sound to it. The language is telling. After i saw in that audi yesterday, i feel like that futures already upon us. Great stuff. Thank you, phil. Good to see you. Reporter you bet. How will insurers handing the Driverless Cars socalled. Autonomous. Joining us from the international Consumer Electronics show in las vegas, allstate chairman and ceo thomas wilson. Tom, happy new year. Great to have you back. Do you say driverless over autonomous . We say autonomous. Its going to happen kelly. Its just too good for customers but it takes longer than some people think. Were not waiting. When you say were not waiting, tom, because this is a message it sounds like the industry is keen to send. The accident rate isnt going to zero and up end the insurance model. Why do you see it as attractive and playing the space . Well first, its good for consume earls because they spend a ton of money on their carls today. And all this technologys going to make it cheaper. Could be 200 a month or so in terms of lower cost and a long time because you got people to buy new cars fix the cars. Change the part number and parking lots and going to take tenplus years and not waiting. What we have done is using that connectivity. We have drive wise to give people lower prices improve the drivinging experience access other people in the low call area and we are in the marketplace today. But let me go back to the Autonomous Cars for a minute here tom. Accident wills happen. How do you assign liability . The guy, the person in the car wasnt driving. Whos to blame then . Do you blame the auto maker . How do you work that out . Thats what im trying to figure out here. Well, when there was when the entire system, bill, would be Autonomous Cars then it would most likely be a system failure and a commercial liability not the person in the car. But its going to take a long time before people give up the cars and in certain rural areas you will always have it. Because that meenls fewer accidents which is a good thing for customers, were expanding our relationship with them from not just not mixing the car when after its been wrecked or helping them get through medical bills and expanding the relationship to improve the experience with the connectivity. We can get in the car and give them money for doing it. Oerls want customers to pay a month and our deal is differently. If you sign up you save 20 a month. Let me ask it another way. If there is an accident are the automakers that make the Autonomous Cars opening themselves up to even greater liability if you point to them saying its the system failure and you should be paying for this, not the person in the car . I think there would be an increased amount of Product Liability. Keep in mind, they have Product Liability today. They have problems with the accelerators or brakes theyre liable for making sure the car works effectively. This expands it some but the benefit of machine to machine communication is it should bring the overall number of accidents down which means the total cost for everybody, whether its customers for Auto Companies or Insurance Companies ought to come down so its a good thing. This is fascinating, tom. Like you were just saying i think it could expand the Product Liability, certainly, would open it up some for the automakers. Some ways what you are saying is going into the technology, you better get the accident rate to zero. Well they clearly they want to do that. They want to keep the customers safe. Were saying not only mean fewer accidents, we are trying to improve the driving experience so if that car breaks down for example, with our drive wise application we can automatically dispatch a tow truck to take care of them. We can tell them where the traffic hot spots are. Tell the spouse how long it will take them to get home at the current speed and theres a lot of things we could do to expand our relationship with this connectivity. The connectivity is a good thing. Is it settled yet, tom, in the industry . Is it clear where that liability is ultimately going to fall or is this an issue thats going to be tussled over in the years to come . Oh i think it will be tus led over. There will be people to debate it. Software manufacturer. Not just the Auto Companies. They make a piece of hardware. They make some software. Theres a number of Software Manufacturers that make middle ware that goes into the car. Theres applications which might fail. So its the liability for keeping people safe is really everybody whos involved in the car which is why its important to make sure we get this right. So while im very excited about whats going on it will take a while to make sure we get it right. Theres not all Autonomous Cars in five years. It takes tenplus years to reconfigure the system. Phil said its happening quickly here. Theyre coming out fast. Good to see you. Thank you for joining us. Enjoy las vegas. Thank you so much. Nice to be here. Allstate chairman and ceo. I dont know. Are the drivers going to have to load up on more insurance or the automakers load up . This is an issue thats going to be settled case by case. It will be tussled as you said. For years to come. Were tussling here. Buyers and sellers are. Down just i wonder if its possible to be positive by the close. Well see. Maybe buy the dippers are coming out today. Much more ahead from the Consumer Electronics show. Wearables that people want to wear. Also up next investment guru byron wien to explain why he thinks the s p surges by 15 this year and down about 400 points last 2 days. Back after this pfr. So no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better td ameritrade. You got this. Alright, so this tylenol arthritis lasts 8 hours, but aleve can last 12 hours. And aleve is proven to work better on pain than tylenol arthritis. So why am i still thinking about this . How are you . Aleve, proven better on pain. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simp welcome back. We are trying to turn green here into the close. Takes 53 and the dow to do it. 7 on the s p and 30 on the nasdaq. We were off more than 200 points here before things turned around. A lot of pressure coming in the european session and again the outperformer on the dow today, see in the upper left corner is merck. Up 3. 6 . Its been doing very well. Cocacola again, as well. Walmart up there again. To the highs of the day. Tough session, as well for the financials. No surprise of the moves in Interest Rates today. And others as well. Courtney reagan on the movers beat for us today. Lets start with michael kors. The retail stuff, the worst performer in the s p 500 today. Downgrading shares to neutral from outperform citing increased promotional discounts for the handbags. Gold prices rise. Apple was on track for its worst sixday losing streak since october of 2011 but its rallying off the lows like the market. We end with ge. One of the worst perform earls in the doug. Downgrading the company citing earnings headwinds. Back the you. All right. Courtney, thank you. A lot to keep an eye on there. Despite the rough start to the year for u. S. Equities next guest expects a strong finish already for 2015. He is our old friend byron wien with the ten surprises for the year and joins us on the cnbc news line. Byron, these are not predictions. These are surprises. Things i think are probable events. All right. A better than 50 chance of happening. And, bill, you wouldnt give them better than a one third chance. Oh no, no no. Knowing who theyre from of course i give them a better chance. Up 15 on the s p when all is said and done for this year. Still after the selloff this week . Yeah. This is the 30th year of the 10 surprises. We have been together for many of them. Yep. Very often one or two of them start out badly. And thats happening this year. But i think earnings come through. The u. S. Economy is strong. In spite of whats going on around the world. The multiple is just the average of the markets. 1950. Were only selling a little over 16 times. I think we can sell 20 times at some point. So i think the combination of earnings improvement a little multiple improvement we can make the 15 . Byron, make sure people caught what you said. You think the multiple on the s p 500 can go to 20 times. Im curious, do you want it to go to 20 times . Well you know everybodys worried that were forming a bubble here but bubbles generally occur if you look historically at 25 and 30 times. They dont occur at 20 times. So the market you know has been oscillating here between 15 and 17 times. I think we can go to 17 to 18 without any trouble. And i believe stocks are attractive. U. S. Stocks are attractive at this point. Theyre more attractive than new yore years eve. You see brent crude slipping into 40 area. Is that or bad thing . Really feel bill the decline in the price of oil is positive, not only for the United States but for india, for china, for every country that imports oil. And i think its also a positive from our point of view for iran and russia. Because its more likely to force iran to the negotiating table on its Weapons Development policy. Its more likely to make putin more conciliatory on territorial expansion in ukraine and elsewhere. So i see oil as a decline in the price net positive. U. S. Consumer 71 . Average Family Income 51,000. Average family drives 15,000 miles. Uses 1,000 gallons of oil a year. And is saving a buck a gallon. Thats 1,000 tax free in their pockets. Im thinking the way Interest Rates are tracking oil to lower and maybe europe and other things and the surprise obviously already is low levels were seeing and unless theres no surprise to you. Where do you think rates are headed this year . I think the fed is going to act earlier than later. So most people are thinking the fed will raise rates in june. I think they may go as soon as march. And so i think short rates will go up. But i think the yield curve will flatten. Theres abundance of liquidity around the world and my view is that you are going to see long rates stay pretty much where they are. In f thats the case and the yield curve flattens this goes back to the old debate and the financial kri sis and the deep u. S. Recession. If it goes flat or invert this is time around would that concern you . Well if it only flattens im not too concerned. If it inverts i would be somewhat concerned but as inverting is an aberration level and even if the rates rise are so low. Were used to short rates of 4 to 6 and talking about 3 to 4 . I dont. Overall Interest Rates are attractive. Good for businesses and housing. I think housing and capital goods will be two of the favorable areas for 2015. Speaking of lower rates and i got just a few seconds on this one here you see europe slipping back into recession here. With all due respect, is that much of a respect . Given the rate that is are going on right now . Well its a surprise in the sense that draghi is going to engage in a vigorous program of quantitative easing and not going to work. Thats the surprise element of that one. In other words, people are counting on the fact that draghi is going to do what bernanke did and it isnt going to work. Thats the surprise. Yeah. Byron, always good to talk to you. Thank you v. A good holiday and a happy new year. Thank you. Same to you. With 30 minutes to go he mentioned housing, durable goods to watch. We are seeing more of a bias towards i dont what should i say, bill . More sellers than buyers right now. Thank you. Thats how we should say it. Off a quarter of a percent an the dow. Jpmorgan chase the biggest loser this week after Goldman Sachs said that the banking giant could be worth more broken apart than together. The idea picking up traction according to analyst mike mayo who argued for Bank Breakups over a few years and will join us on this one when we come back. 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S ps down 10 points half a percent decline there and the nasdaq, very interesting day for technology. Nasdaq is lower but high Profile Technology apple is positive again today. Alibaba. Twitter especially up 7 today. And there is the nasdaq 100 right now. Thats monster. Com at the top. People looking for jobs . Intuitive surgical. Tesla. Who would have thought a port in a storm like that . Tougher day for the financials and Jpmorgan Chase. Goldman sachs saying that the nations largest bank by assets could be worth more broken apart than kept left. Jeff cox wrote about this on cnbc and joins us now. Thanks bill. Breaking up is hard to do as the song goes and for jpmorgan maybe theres no other choice. No other institution faced more regulator pressure than jpm n. A much talked about note Goldman Sachs believes its time to split up perhaps into four or maybe two pieces. Goldman believes a split beneficial to shareholders, though it does note the difficulties involved taking apart such a massive institution. Now, guys the biggest obstacle here for jpm is the fed. After pushing jpmorgan to continue growing through acquisitions in the crisis the fed now wants jpmorgan to hold more assets than any of its competitors and you can see what thats done to the share price. Under performed the peers. Unwinding is difficult. Its the height of irony that this same regulators that pushed jpmorgan together now want to break it apart. Likely scenario could see a basic split of jpmorgan and chase. That would bring to end a fascinating era. Any event, the future is likely to be one of the streets most intriguing stories of the year. Bill kelly . Jeff, thank you very much. Jeff cox. Does splitting up jpmorgan make sense here . Joining us is kayla following this story all along and mike mayo who made this kind of call a month ago in his upgrade report. Mike this kind of blueprint put together to try to achieve economies of scale and earnings efficiencies and so forth and now i guess youre among those who feel thats no longer possible. Why . Well theres three reasons why a breakup of jpmorgan could be considered. Number one, efficiency has stalled out over the last three years. Two, theres more regulatory costs, Capital Requirements for jpmorgan than any other bank. And three, they had their share of problems last few years in terms of 2012 the trading loss. 2013 extra costs due to complexity. And 2014 extra capital due to size. So its some point no more excuses for jpmorgan. If they say they have more capital because theyre big and they have more costs because theyre complex, well okay. Dont be as big and complex. Or go ahead and show the value of scale. So the title of our upgrade note one month ago was prove it or lose it. Or in other words, put up or shut up. Show the benefits of scale to shareholders or restructure, break off. Sell off pieces. Okay. But kayla, do you think jamie dimon ever presides over a breakup of this bank . I think he could. That was the debate talking about who would take over a firm to succeed him and called too big to manage and there is an idea that perhaps theres no Single Person within jpmorgan that could run a combined Jpmorgan Chase and perhaps there were some leaders who could run either an Investment Bank with a lot of institutional clients or very big retail and Asset Management type institution. What i found most interesting in the Goldman Sachs note is this idea that jpmorgan a victim of its own success and only needs to hold so much more capital than the peers because of the ability of gain market share relatively stronger bank in the crisis and also that it could be, you know, a host of standalone institutions because of the various business lines at the top of the class and compared to citigroup and i know mike knows very well you break apart the pieces an you dont really have a lot of value propositions. Yeah. I mean mike what would the pieces be worth separate . If thats the premise, theyre undervalued, what are we talked about here . Theres significant trapped value at jpmorgan. We estimate the sum of the parts at jpmorgan equal to 80 to 85 a share and compares to current stock prize of 55. Whats interesting is if jpmorgan stock stays behind and under performed or the bank group the last three years, you could have the likes of carl icahn in terms of activist investors and Elizabeth Warren the regulators dancing a jig together celebrating the idea of maybe breaking up jpmorgan to make them more simple and to realize value for shareholders. Having said that i think first in line would be citigroup and bank of america which have not performed well over the last decade opposed to jpmorgan first in line for a splitup youre saying mike . Yeah. I think in the firing line f. The bear is chasing fair enough. If a bear is chasing you, how fast do you have to run . Faster than the lower prn and the slowest bank for the last decade is city group and bank of america. We think theyre sum of the parts worth more than 50 and jpmorgan could be split up for example, if jamie dimon retires. We have to go. In a word are there other highprofile calls to make in regard of jpmorgan and the breakup . No. This is something that the bank will have to address in the late february investor day when it usually talks about the benefits of being a big bank the synergies of the businesses together and present the math for doing so. It will. Thank you so much. Mike and kayla pressure continues on the financials and the market with the dow heading lower. With about 17 minutes left, the dow down about 86 points here and heading lower. Another day and another drop in oil prices. Jackie deangelis with the action of the nymex next. A programming note by the way, our friends at squawk box kicking off the 20th year with a brand new home. Just think of how much more hair joe started when they started the show 20 years ago. Starting tomorrow, check out the new digs starting at 6 00 a. M. Eastern time right here on cnbc. Welcome back. Another big day of big losses in the oil market and now the saudi prince is blaming weak Global Growth. Jackie deangelis has it for us at the nymex. Good afternoon to you guys. Thats right. Talk about pricing. We did settle under 50. 47. 93. Another 4 clip to the down side after the action of yesterday. You mentioned the comments of the saudi crown prince. Certainly having an impact on this market. In terms of the price action that we have been seeing that commenting and nobody wants to cut production including saudi arabia but traders taking this as a sign theyre digging their heels in as they have been. They will not make a cut any time soon and thats what sent prices lower. But also a lot of traders saying sort of provides some context to the fact of a little bit of out of touch of whens happening, too, guys. Thank you very much. See you later. Dows down 66 points. Who knows where its going to finish today . Well find out if 12 minutes time. We have much more ahead. Later, see how yields are falling. Is that new lows for Mortgage Rates and maybe spur more home buying . Thats coming up. Welcome back. Dow down 72. Just joining us check in see how the markets did today, very volatile day. A sharply higher opening with the dow up 80 some and then down 239 and we have since come back with that decline there of 79 points. S p down 10. Nasdaq down 41. Joining us jeremy hill and bob pisani, as well. What a crazy day. Yeah. Im happy we have come back. Restore a little bit of confidence a bit. It was defensive led. Consumers, Health Care Staples and the market spoken very clearly. Theyre buying bonds. Were at 52week high on many many big bond etfs including corporate bonds, longterm treasury bonds. Even jenny mays are at 52week highs. You put on a note late last year positivedepositing the possibility of long rates wont go up at the same time as the fed. Down to 1. 88 on the 10year. Why do you think this is possible . One of the things that we query all the time is if youre an investment manage we are a wide ranging mandate for the investments, why would you seek a risk free rate in europe and not in the u. S. . The relative value trade is a massive differential there. We find of often jest whats the difference between the u. S. And ireland . Ireland trades today a yield of 1. 2. The u. S. Is you know a little bit under 2 . That to me doesnt seem right. German bunds dropped 15 today. I got emails of Stock Traders saying did you see this . 0. 44 . Go to your point of comparative value. Right. Why wouldnt you come in . Any wonder that the bond market is rallying here . Yields reflecting a sentiment about our own economy or european economy . I think its a little bit of both. Its a fairly complex trade. What you have is an anticipation of european ecbled qe and may or may not happen. Largely in our opinion dependent on what happens in greece as well. Theres a huge risk around that. Thats one of the larger risks for european yields. All right. Let me get a break out of the way and come back we have the closing countdown and bring them back here and see how we do. See if we finish we are a little bit lower here and see how the final minutes go as we head toward the close here on closing bell. I mean the charts are going to be tell the whole story here and what a day it was. A positive opening. Looked like we might bounce from yesterdays huge selloff and then headed south. Treasuries going lower. At the low of the day, down 239 points on the industrial average. Then a comeback late in the session and now heading lower den. Lets show you the yield on the 10year, another wild and woolly day here. Down to lows we hadnt seen since last october. Right around noon eastern time when we hit that 1. 88 level and it was at the same time that the yield on the 30year went below 2. 5 . Around 2. 48 . Crude oil, another extreme. Were back the lows we havent seen since april of 2009. Now at 47. 79. Decline of 4. 5 in todays trading at the nymex. How much lower do you think oil goes and what does that is lower oil now bad for equities . We are trying to figure that out here. Bad for equities potentially because its batd for eess bad for other Asset Classes. How does it affect the high bond complex . Does that have a contagion in the stocks . Looking at oil, with e know theres a supply glut. Really what were looking is where is demand coming from . China . No. Emerging markets . No. U. S. . We have our own oil now. Thats the issue. Thats i think what to say it and lightly is freaking people out. Maybe change the conversation a little bit. On thursday hearing from retailers of November December retail sales. An impact there . Well, it is hard to quantify. Easy to lower oil Company Earnings estimates and hard to say we had a nice boost of traffic in the stores because the oil is lower. Thats hard. But well get the comments. National Retail Federation not changed the view. 4 increase in holiday sales. Im hopefully the news is good overall. Im suspicious of a transmission lag time between you get a giant quote unquote tax cut of oil but, you know do you feel richer . If youre a middle class person are you spending retail dollars or are you repairing the dlans sheet in disarray . Either way, it is good but we wont be as easy to quantify. Butigger upside with the stocks of a Producer Price issue rather than Consumer Price issues off of oil. Big story is very heavy volume. Heading towards 4 billion shares. All shares. Very heavy volume in the big stock etfs and bond etfs and 52week highs on a bunch of them and the market spoken. They think yields stay low for a long time throughout the year. Thats what the market is saying right now. Just like jeremy hill same thing. I agree. Thank you very much. Bob, thanks as always. We are going out after a wild tug of war between the bulls and the bears on the tuesday, the dow down about 120 points. With the s p down 17. Stay tuned now. The second hour of the closing bell with kelly evans. See you tomorrow. Thank you bill. Welcome to the closing bell, everybody. Im kelly evans. Another tough session on wall street. A look there at one point in the last hour the dow down less than 50 points and might be positive. Not the case on the close. The dow, another triple digit decline. Off 133. I bring that up because if we had back to back decline of 1 on the index, it is more significant from a historical point of view. The s p giving up 18 points. Nasdaq, underperformer despite the stronger moves there from the likes of alibaba. Talking about that. Joining me now in the panel, Carol Roth Dan greenhouse and Sharon Epperson. Also with us with more on the market is tim seymour. Dan, how serious is the fact weve kicked the world off on a down note . The year really starts as bad as we have seen this year quite infrequently going back 30 40 years and i think you go out today at about 2,002, well off the highs, sentiment deteriorated and everybodys trying to figure out whats going on. Im not jumping on the most bearish bandwagon and people talking about whether or not the u. S. On the verge of a recession and other sort of more dire u. S. Recession . Because of what happened with oil . Look at the Economic Data reports released over the last couple of days. Almost all of them missed. Thats an increased attention not the session, surely. No no. Ill say you have people david tyce on earlier and individuals in the market see the worst possible scenario. My only point is looking at the Economic Data reports released of late theyre doing quite poorly in relation to expectations. Carol eight out of eight data points weaker to start the year and perhaps no surprise to see the reaction. Im not so certain this is in regard to usda that points. I think that this is in response to two greasy messes. Oil and greece in europe kelly. Thats whats driving this. Market has not taken in and processed a lot of the data points that we have seen over the last several years. Im not so certain with the fed still in play in a meaningful way, Central Banks doing the same, that the market is really that hyper focused on whats going on from a u. S. Economic data point given the fact theres nothing that fell off a cliff. Theres slower growth. Sort of to be expected. So im looking at some different indicators. Sharon, we are teeing up the time of year or should be going through sort of portfolios and looking at the performance of a couple of years thinking maybe its time to finally get into the stock market. Bam. We are off 500 points in 2 days. Thats what they should be doing. They should be looking at individual investors investing for the long term in the stock market. Youre not worried about whens happening today, over the next week or month or even this year. You really want to be setting yourself up for the longer term and now the focus should be on the fact of a company with a 401 k plan nut extra 500 bucks. Oil savings perhaps. Perhaps gasoline savings, exactly. Its discount season. Going to the mall discount season in the stock market. Why not . The problem is a lot of people may be looking that the and looking at the market fluctuationless or the dip that were seeing here at the start of the year saying i maxed out last year and i did it earlier in the year and i had a bigger paycheck and hang on to the money. Thats the wrong attitude. If you want to be in it for the long term be in it. Keep it in perspective. We are only modestly off the highs. Exactly. Still above the low from december. Definitely above the low from november. We know that the equity market pulled back here but again, not a catastrophic fall in prices. Looking back and looking at what the data shows in september and october how many people pulled out of their 401 k , pulled out of the stock funds only to have the market go back up . What a mistake that was as a longterm investor. Tim, what about people might be looking at the bond market, for example, trying to figure out what it is telling us about where the economy is headed . A couple of things. Differentials between the u. S. Bond market and europe we have noted and significant spread contraction. Whens it call mean . It just means when youre looking at relative value, no question u. S. Rates need to go lower. Looking at the price action in risk assets though im not sure that we are in the same place. So last year lower yields actually meant the market went higher. This year, the market saying hey, lower prices excuse me higher prices lower yields have us concerned. Back to oil, i dont think that prices is truth here. I think that things that investors should be watching it is very much about macro. Watch dollar yen. Below 116. Wait a second. You were saying that oil price here you dont think is real . I dont think price is truth with oil dipping into the 40s. You know youre in a place of supply glut a price war going on. You have oversold conditions. You have a number of energy funds that have been blown up effectively. Its been the violence of this move. Other people talked about that. Thats what you should be concerned about. This is not an orderly move and not a move that tells you u. S. Is going in recession. Thats absurd. The u. S. Growing 3 plus percent in 2015 and europe by the second half of 2015 will be north of 2 . Okay. Okay. Hold on to that thought, everybody. Talk about one sector, transports, getting attention. Selling off so far in 2015 after doubling the performance of the dow last year. Should you buy this leading indicator on the dip . Morgan brennan, is it still a reliable leading indicator if the transports that move crude are the reason its suffering . You have to dig down and take a look at the Different Companies within the dow transports. 2015 a really rough ride for the dow transports posting the worst twoday selloff in nearly a year. Two reasons for this. According to experts. First, investors selling 2014 stock winners to defer until next year and second continued slide in oil specifically whats slowing Oil Production could mean for the companies most exposed to it. For example, some of the railroad operators and maritime shippers. Keep in mind cheaper fuel fuel is one of the biggest costs for all of the transports could be a tailwind and as falling gas prices enable consumers to spend more on other things and analysts are telling me that the transports that specifically cater to consumers could be a buy and parcel carriers like u. P. S. And fedex are hiking rates as demand goes beyond capacity. Only stock within the dow transports in the green of tesla. Airlines delta, down 3 this year after 79 jump in 2014. But annual itselves consensus says a buy rating with 30 price upside over 12 months and similar for jetblue and united continental. Trucking stocks, Swift Transportation and westerner enterprises, two Smaller Companies with largely domestic operations and more focused on retail and thats really kind of a story with the transports going forward. Everybody ive spoken to analysts strategists expect the group to have another solid group and consumer facing transport that is are really going to shine this year versus ones more industrial oriented like the railroads. Thank you. Stay with us with thoughts from the panel on this. Carol . It is interesting to me it shines the light on the consumer story because were hearing that the price of oil is going to be so great for consumers but when you look at fed, and u. P. S. And certainly i know the Airlines None of that is getting passed on to the consumers and interesting in terms of rate savings . In terms of having savings out of it. Fedex and u. P. S. Raising rates in the face of cost of oil going down and so from from the consumer story, im just not certain how that plays out. A quick question and we have to get to earnings. Do you like the transports as a leading inging gauge. As a whole, obviously, theres as morgan noted, the rails are having trouble with the decline in commodity prices. Airlines down three or four days now. Truckers obviously deal with a different set of fundamentals. If you believe that the u. S. Economy is relatively speaking fine then transports should be a sector to look at. Lets send it out to Courtney Reagan with micron. Reporting First Quarter earnings of 97 cents a share, thats a nickel better than the street expecting. Revenue though coming in a bit shy of 4. 75 billion. The stock reacting after hours as you can see up about 1 . Back to you. All right. Thank you. Micron we talk about earnings season, people focusing on the alcaos of the world. Tim . We think theyre probably a place to be largely somewhat defensive. I think if you looked across the space in 2014 you got a number of guys that outperformed and negativity thats priced into qualcomm and surprise on the upside. Thats a top pick. Intel, defensive outperforming in the downward pc cycle and talk about this tonight on fast money because you have to find the pockets of stock picking and micron is support of the activist story, valuation story and probably also have a pretty good ride. All right. Fair enough. Thats all coming up on fast money. Thank you. Thanks to the whole panel. Catch him at 5 00 talking to the ceo of webmd live from las vegas. Dont miss it. Another big selloff on wall street today. Investors starting to get gun shy after five years of strong ganls . If the market is going down does that make sense, especially if its a supply issue and not a demand one . Or is it . Thats next. Youre watching cnbc, first in business worldwide. First impressions are important. Youve got to make every second count. Banking designed for the way you live your life. So you can welcome your family home. For the first time. Chase. So you can. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Welcome back. Many still pegging the slide of stocks to the slide in crude. Does that make sense . The common wisdom is it would if its supply. With us now Nicholas Green and also chris faulkner. Welcome to you both. Nicolaus, what do you think this is all about . Well, from our side of things, we are genuinely concerned about the offshore environment, we were concerned at 110. The reality is new field developments offshore are were struggling to make good economics at 110 a barrel. Clearly 80 a barrel things are significantly worse. Put very simply on the demand side, we are seeing we think a structural recession. Fewer big greenfield projects go ahead. Oil services after years of expansion are bigger than theyve theyve ever been. Does that jive with what youre seeing . Yeah. Supply and demand. He mentioned good points. Supply out of the United States. You have the opec and saudi situation. You have japan in recession. Europe in a potential recession. China pullback. I think the reality is now theres a lot of oil in the market. You know we near a new price era of oil. I think it lasts sub50 . No. Its a range balance situation between now and q1. We can stop producing on a dime and cant say everyone stop. It takes time. What were doing is planning months in the past so i think supply will come down as drilling slow downs into q2 and oil will go back to what it was any time season. Ill give you a sub 50 forecast. Brian reynolds who i love saying it could be 20 bucks for a decade. What do you do then . I think that at 45 now youre going to have producers who are going to get gobbled up by bigger producers, not making it in the storm. 20 oil, i dont know many models that show that sustainable. I dont know many models that saw this coming. This is this conversation is driving me crazy. It doesnt feel like this is about whats really going on out there. Why are we looking at this . Clearly the dynamic is mott appreciated by models or anybody in the market. I think the Tipping Point occurred when we reached 9 Million Barrels and saudi didnt cut. I think that theres just too much oil in the market. Demand is flat. Countries and concern and a number of things in the perfect storm basket driven the price down. I dont think it should have come down this fast based on fundamentals of 1. 5 million barrel oversupply in the market and you have traders and spectaculars driving it down. Turning to the panel here. Nicholas its dan greenhaus. Chris just brought up how japan is in a recession and europe and other observations. What areoccurred in the middle of june that we didnt know . Did we discover a supply glut . What happened then to lead to this accelerated decline . Its a good question. There isnt a very clear answer to that. The reality is even by september time the market wasnt fully clear to see the slide in the oil price. There were hopes of a decision in november to reverse it. Clearly that didnt happen. But no. Youre absolutely right. Our thesis in june last year was talking a lot about capital discipline, the effect this has on the Oil Service Sector and in fact how much of a reduction in demand we expected to see anyway at those kind of oil prices so the fact that the supply has continued, the fact that rig count hasnt dropped over the second half of 14 and the fact it took so long to come down means i think it did catch a lot of people by surprise. Youre right. Nicholas its carol roth. If this continues for some length of time looking at particularly the u. S. Economy and market a lot of people have said this would be very good for the u. S. Economy but the question is is it good for the u. S. Market . It seems to me in terms of earnings per share that Energy SectorFinancial Services sectors that could be hit very hard not made up by the potential increase of consumption from the consumer. Yeah. Thats pretty interesting. Theres a lot of debate adds you know. Is low oil price good for the economy or snot what we can comment on with some certainty for the sectors of the oil Service Economy which are really focused on offshore talking about the offshore drillers seismic players, multiservice providers and the construction guys in particular, you know all of these names are going to have substantially less work than they were expecting. In our we forecast new work by looking at the number of new projects offshore to get the go ahead in the given year and forecasting for 2015 half of 2014 numbers so 20 projects globally we think to get the go ahead. That is low when you think the last ten years we have had an average of about 75 a year and thats going to continue also out into 16 and 17, low numbers, about 50 of about a 50 reduction in demand in the offshore new projects space. Nicolaus its Sharon Epperson with cnbc. Covering the oil market for several years as i saw the price of oil go up to 150 a barrel, wasnt necessarily the discussion about supply or demand. It was a lot about speculation. So im wondering on this big slide that we have seen in the oil price, how much speculators have played a role in the rapid decline since june of course you say that there was no one event in june. Could the events be speculative activity in the markets . Youre dead right. I think we have to allow for that now. You know what kind of amounts . 20 of the slide. You know its not something which is easy to quantify and clearly the level of the oil prices dropped to isnt supported by the fundamentals of supply and demand. You think thats the case nicholas . Well, i think clearly supply and demand is key. But it probably doesnt explain why its fallen as far as its fallen. Whether you put that down to you know political drivers, the role of opec may or may not be trying to do in closing more marginal producers whether speculator speculators, theres more going on than pure fundamentals. Thats for sure. May have accounted for a good portion of the fall and not all of it. We are expecting that to correct upward. Im sorry. I didnt know just following the line of thought there. Chris, a quick last question to you before we go. Im curious, ceo of your firm, what you do in light of all of this. Try to eat or be eaten . Talking about layoffs here . No. I think its two things. One, theres acquisition opportunity. We are in a buyers market. Cash is king. Number two, though drill your best stuff. Drill your best acre and in the best sweet spots. No explorer story stuff and focus on a micro level on the best acreage fields. Thank you very much. Appreciate it. Thank you. 2014 supposed to be the year of Wearable Technology but they never really took off with consumers. Up next, head to the Consumer Electronics show for a look at the wearables that people might wear this year. Josh altman from Million Dollar listing joining us later for the outlook for housing amid this big move in yield. Stay tuned. But your erectile dysfunction that 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 medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any allergic reactions like 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 free 30tablet trial. Welcome back. For a few years it seems wearable tech is dressed up with no place to go because people didnt like anything enough to wear it regularly. Is that changing . Katie thompson is out in las vegas. Katie, with a look at wearable tech that consumers and yourself may actually want to wear . Reporter yeah. Absolutely. So the big thing with wearable devices is no one wants to wear them. So what do you do . You make them look like device this is people will wear. One of the one that is we have here is this activity pop. You can see it just looks like a watch. You can change the bands. Its pretty affordable. About 150. So this is definitely something people most likely prone to wear. Well listen. Its a step in the right direction, i guess. Contain your enthusiasm. Good to see you this afternoon. Appreciate it. Katie thompson. Yeah. No. Yeah. Go ahead. One more device the show you. Please do. Yeah. This one is misfit shine and its actually an activity tracker, as well. But you can wear it in a necklace or a bracelet. You dont have to doesnt look like a big bulky watch and an issue women would be more inclined to wear. Its the misfit though. I like it. Its like yeah. This is the misfit. Go ahead. This is the misfit swarovski and different than their usual device and more fancy and more geared toward women. No stunning. In fact. Thank you. Appreciate it. Our they kayety thompson. No problem. My next guest has a wearable for your head. Joining us now is hans vestberg. Good to have you with us. What should we be looking at here . I think that what were seeing is of course the world of connected devices. The networks are built out. We see a lot of potential of bringing the connected devices together. Here we see all gadgets having some type of connectivity. I think that this is really where we see a big change in the industry where industries are now coming together and using these devices for creating more uses and new ways of working. Tell me about this connected device for the head hans. I think that it comes to connected devices, we have gone from started connecting things and now coming into systems and you think about where connected cars and theyve been one of the most important things here at the Consumer Electronics show and now connected together and you start to doing things with them. You can manage traffic and not only that we saw, for example, in the ericsson booth, a helmet and a car and avoid security. So something you can build systems all these connected devices for the better of the society and, of course, thiss the whole idea to bring a lot of efficiency into the society with all these devices. Some wearable some maybe more for luxury or fun and many of them bring you lot of efficiency. Hans, are you ready to take on more Product Liability for Driverless Cars . Tom wilson ceo of allstate indicated thats frankly where its probably all going. I think that if we look at we are building the majority of the mobile networks in the world which, of course will be the connectivity of these ones these devices. What we see ourself doing much more and more is really to understand the type of applications and devices and how to use the network. I mean it is a huge difference of having a connected car compared to consumer doing youtube. We have always done is sort of guarantee until that and that will continue and evolution of the technologies is just enormous and how many people get connected at the same time. And also some big news trying to improve speeds on the Wireless Networks as well. We thank you for that and joining us this afternoon. Hans verseberg from vegas, thank you so much. We have some breaking news now on jcpenney. Thats right. A bit of a surprise. Jcpenney is saying that the holiday same store sales for november and december period up 3. 7 . Thats same store sales for november and december saying for the full Fourth Quarter which is not yet over they expect same store sales to be at the upper end of the previous range of an increase of 2 to 4 . Shares are rising for jcpenney. Up almost 10 after hours on this news. Back to you. All right. Thank you very much. A huge move there as we start to sift through what happened this holiday season. Perhaps one winner that is coming up, the Housing Market hit a speed bump lately. Will falling rates give the industry a boost . Thats next. And while we talk about real e estate estate, squawk box is getting a new home in new york city. They have an allstar lineup for the house warming party. So ally bank really has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees from the bank where no branches equals great rates. Hi. Pete and jon najarian here in new york city outside of the nasdaq, where we bring you live daily market updates. And today, we have a very special free gift for you. So many viewers email us wanting to know our secrets on how we trade options. So we put our secrets into a new book. And if youre one of the first 250 people to call in right now and just cover shipping and handling well send you a copy for free. 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And what we are seeing coast to coast right now is theres a great article out in the New York Times today talking about how confidence in the market a lot of people who are bigtime spending luxury market buying type of stuff. It really just puts confidence back in and people are happy and buying. Is it about the rates . People buying at your levels in new york and l. A. Arent they using cash and overseas . Do Mortgage Rate vs a difference . Of course. Those are people thats not the norm. Its about borrowing and banks approving the loans and we are seeing regular sales of you know median price, a 740,000 . All of l. A. 500,000. There you go. Looking at real estate out there . No. I get paid the know things. You see it. Everything is moving. Fourth quarter is super successful. Now the First Quarter of 2015 its a question of is there going to be some type of adjustment . Right. Where are people buying . We are looking at the big drop we have seen in the oil price and a lot of folks are sayings the time to actually look into building a home. Building a home in a rural area because you dont have to pay the transportation costs as high to get there. Are we seeing more building more new homes built and what people are interested in now . Whats going on in truesdale . Great place. Everybody wants to be in the business now of developing. Everyone. So thats what we are seeing a lot. Schoolteachers investing in real estate and building houses because they feel like everybody else is making money out there so thats always a good sign. Trying to think of the implications of that one. Yeah. But what about the millennials . Are you having any millennials . Everything i see, every article is that the Millennials Want to rent, they dont want to buy an maybe a trip around the world. They dont want to be saddled with the baggage of a mortgage and maybe live with mom and dad forever. Right. So were seeing the rental market still pretty strong only because the prices are so high median prices and where you think the rental market is going down, listen still a great investment. Everybodys renting. A lot of my billionaire clients are buying units. Whats the hot market in l. A. . Bel air. Truesdale. There is something more going on. There was a sale for 70 million in hill crest and phenomenal. Wow. A billionaire gamer bought it. 3,000 a foot. I did see that. Does it translate from the midwest where i come from . You fancy people in new york and l. A. Thats fine. You fancy people. From chicago. Im the heart of the midwest and people still struggling on a daytoday basis. Where do you think that goes in 2015 . Well just have to see. Im in l. A. And i deal with some of new york and not the midwest. I love it. I dont have to worry about it. Right . We know what youre saying. Nobody cares about main street. Thats the problem. Josh i dont know if you look at this, people not investing in homes want to get into real estate and think maybe for the long term knob a reit. What kind of assets to be looking at in terms of those . Do you look at that at snaul. We dont. We deal with foreign money. Especially the russians. Full cash. High end. Are you seeing a drop in demand . Especially from the russian buyers, we have heard in a lot of markets epsilon don, for example, that thats really dropped off a cliff. I have not seen that personally in the highend market i deal with in beverly hills. Still hot market. Inventory has gone up a little bit now so well see what happens. Remember, the last few years have seen the influx of russian, chinese and Saudi Arabian buyers to get away from whats happened and preparatory of whats taking place. People talking about the house of a safe deposit box of the wealthy and not owning the property. How does that affect the market . Somebody said that when youre there investing the money it is not an on their return. It is just so they know they have the money there and safe and thats what it is. What you said. How many people live in the homes youre selling . Do they actually live there . I live in it. Exactly. Someone wins. You win at least. You think shes joking. Theres a very big article a month, two months ago talking about making the numbers up because i dont remember. Something like 40 of the pardon mes between 42nd and 69th street between lex and park avenue empty because they were foreign owned. Dynamic in london with entire streets with huge sales prices for the properties but then no cares in the parking spots. Who wants neighbors anyways . People in general. Its an issue of property taxes, too. Basically building are ghost cities in disguise hardly the way for prosperity generally. True. Blocking people out of the market. Yeah. Josh thank you. 1 million apartments are rent control controlled. Do you want to make a prediction . Still seeing a lot of action. I think its going to correct itself in the First Quarter. In the First Quarter . Right after the First Quarter. And then going to be better . No no. I think its going to correct itself after the First Quarter. All right. Well be watching. Josh, thank you so much. Thank you. Josh altman. Most americans enjoying the low prices at the gas pump. Could it spur a credit crisis . Well talk about that next. And for those of you who think the french sit at cafes all day, guess what. France is number one nation in europe for startup companies. Well see if it makes the hot list coming up. Welcome back. As you can see there, oil dropped and weighing on equity markets today and not the only ones affected. Drop in oil hitting energy companies, highyield bonds and if oil and gas prices stay low throughout 2015 could it cause a credit crisis . Joining me now with his name jim keenan. Welcome. Great to have you with us. Start with where you see the risks if Oil Prices Stay where they currently are today. Yeah. I dont think its isolated to the highyield market. You have seen a big move in highyield Energy Prices and over the last couple of years the shale boon and the Energy Recovery in the u. S. And about 15 to 16 of the high yield market 4 5 of the market. You have seen the high yield bonds significantly decline. That being said you probably wont see a lot of defaults in 10 2015 but 2016. But its not just the high yield market. Oils going to affect the Global Markets and russia and venezuela and nigeria and a pretty big impact on the global market. What kind of impact on the u. S. Though . How many more declines like this im thinking again about housing last time around does it take to understand where some of the risks are in the Financial System . How much is different this time versus what we saw in 2008 . Well i dont think we know. You still are the significant very rapid decline in oil and havent seen all the impacts. Obviously, theres still a supply demand imbalance. You have cap x cuts and production is increasing. You have a lot of supply coming on to the market. That being said you still see a global slowdown now. China, brazil russia. Economies are slowing down but the u. S. Economy is in pretty good shape right now so the volatility to see over the next year probably will probably escalate and were not sure what to see yet but vol is back and that is going to create opportunities for people. Take a quick listen. We had Elevation Partners roger mcnami saying yesterday the differences of as he sees it the drop in oil prices and drop in housing prices. Take a quick listen. I dont expect them to be huge because you have not seen the kind of synthetic products created around energy you saw around mortgages. I dont see baskets of synthetic instruments being sold to gullible Pension Managers around the world. I think everybody, you know the oil and gas market is not a place where thats been going on. And so i just dont see that risk right now. Is he right about that jim . Yeah. I think some of the difference if you went back to 2007 2008 we saw a lot of leverage at the household sector a lot of leverage at the Financial System and the asset liability mismatch tends to be pretty fragile. The way households or the way the Banking System finance themselves and getting a pretty big decline you have that liability mismatch and you see in other words, takes a small decline in price to wipe out the capital you might have. That being said we still have a lot of leverage in the overall global system and you have seen a major shift of that going from the household, the Banking System and corporates on to Central Bank Balance sheets or fiscal Balance Sheets an well see impact and inflationary data and the lack youre seeing the impact. To say its different in 2008 or 2007 yes, absolutely it is different. The system reduced significant amount of risk that we saw at that time frame. But oil impact will have an impact or the slowdown of china, you know is going to have an impact of the overall economy and so from an opportunistic standpoint we think the market is fine. The u. S. Economy is fine. There are more risk in the system. And so you have to be a bit more balanced with the portfolios and high yield probably produces 4 5 returns. S p is likely to produce high Single Digits and risk to that number. It is an interesting point, as well, because a lot of what you have talked about slowing economy and the Global Concerns are all factors pretty negative for high yield, junk or the kinds of lesser quality names people might be holding so how much could we see spreads, for example, widen between some of those names beyond what we have already seen and the benchmark treasury yields because they keep sinking . Yeah. A slow economy is still fine. All right . Its a recession you start to see risk to operational earnings and when you look at the high yield market today, its 600 over 7. 5 yield and a pretty big discount to 1. 5 5year or 10 10year. The market is pricing in bigger discount than default. Over five years, away from whats happening in the market most of the high yield market and most of the corporate sector in the u. S. Continued to derisk and dpundfundamentals of an economy is pretty good for credit markets and maybe morris i can for equity markets. Thats interesting. People should take note. Going back to the issue of the pricing versus defaults you dont think we might have a real increase, a surge in defaults a default wave as some are calling it . I think it is really hard to see a significant spurn to defaults in 2015. Ill give you a couple reasons. One, over the last five years the economy has and most of the corporates have derisked in the economy and only last 18 months to see risk come back into the system at the corporate level. Two, is part of that derisking is was extendeding out the liabilities and pushed out the maturities, you know beyond three years and so you really need a recession or a corporate operating earnings decline to see a risk. For energy its a decline for the quarter. No doubt. Most high yield companies with the leverage putting on in the high yield Energy Sector they hedge out a lot of the production for 2015. Or over the next 12 to 18 months and between 50 and 70 so its hard to see a companys with liquidity really defaulting over 15 and thats why you see production cuts and oil, supply and demand balance likely come back in 2016 and then defaults in 16. All rightment bottom line is credit boom keeps going for then . I would say its more balanced. We dont view it as an opportunity. But looking at the market most of the worlds fixed income assets trading less than 3 . And so, an area to get 4 to 6 theres a place for high yield in a balanced portfolio. Its not an opportunity but its a place thinking about a balance between equities and rate strategies. We have to get you back at 2016 looms to talk about how thats evolving. Thank you so much for being here. Thank you. Really appreciate. Up next, whats burning up cnbc. Com with the hot list and tomorrow talking to the ceo of Discovery Communications and set your alarms for 6 00 a. M. For squawk box in the new stud youio in the heart of manhattan. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. The good times arent rolling anymore . Dont believe me thats topping the hot list. What . Oh yes. Whats going on . It certainly is kelly. Bill gross, the bond king now janice but people still key into what he says and he came out with a note saying the good times are over. And so people are piling into our writeup of that note. Hes seeing low Global Growth and thinks a lot of Asset Classes might start posting red numbers after awhile so thats hot on the hot list. Following straight from that we have an analysis of what other commodities, like oil, are taking a dive. Youve got sugar, plywood, soybean oil, all this is creating fears about deflation wave hitting Global Growth on top of the slowdown that were seeing, so john schoen put that together for us. Our readers are eating that one up as well. Because we have all this panic and worry going on we have another piece about correction protection, what kind of things people can pile into to guard themselves against a downturn in the markets that continues on, things like bond etfs, solid stocks that have dividends on a regular basis, some option plays, and, yes, everybodys favorite safe haven, gold. There you go, kelly. Thats whats boiling for us today. Gold has been surprisingly and perhaps eerily stable reminds you of oil before the collapse we just witnessed. Thats all ill say about that one. Thank you, allen. Good to see you at headquarters. Heres another hot story today and something you dont see often, its a check for 975 million. Courtney reagan has the story. Do you have the check . We have a copy of the check, of course we dont talk about divorce settlements that often, but this you cant ignore. Harold hamm delivered this check for 974. 8 million to his exwifes legal team. The full cash value of what he owes based on a judges november ruling, but sue is rejecting that offer and that check. Hamms fortune is expected to be about 14 billion. Saying the nearly 1 billion is not enough. Hamm appealed it, too, saying it was too high. This is an action he tried to take to settle it, i dont think its going to work. Back to you. Courtney this is unbelievable to me. This check came from the lawyer how are we sure its legitimate . This check came from the lawyer, sent to us as part of the filing. This is a check he wrote, he signed, she handed it back, said no thanks. I dont know what you think, the facts banks in this country can clear almost a billion check, personal check. Personal check. It was just bonus season. I will say why would you write a check . Why wouldnt you do it by Wire Transfer . Thats more expensive, Wire Transfer. That costs 25. Why would you write the check when youre waiting to hear the appeal on the fact youre contending it was too high . Meant to make a point. Way to make a point, write down 970something million. I did not know you could write underneath the line. If you run out of space. See its not he ran out of space. I didnt know that was a thing. If you run out of space there, you can go to the back of the check. I write a squiggly line were not talking about billion dollar amounts here. The bank probably said whatever. Next, final few minutes for the stock market, well see what it means for tomorrows trading session with the panel. Were back in two. Youre driving along, having a perfectly nice day, when out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . Liberty mutuals new car replacement will pay for the entire value of your car plus depreciation. Call and for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch to Liberty Mutual insurance and you could save up to 423 dollars. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Welcome back. Ten minutes before the close, the dow is off by about 40 points. By the time the bell rang we were off 130. Another pretty weak finish. Is it a reason to worry about tomorrow, dan . Listen to some degree not to use a gambling analogy, which i despise, but every day is a spin of the roulette wheel, so to speak. Clearly, the market feels heavy and moments the market fills up more rapidly than others. We know the give in wait for it to stabilize, but i think a lot of people are turning their eyes to friday. The Economic Data reports have missed and friday is another miss bears are going to come out. Whats the forecast . Interesting thing is one of the things we didnt talk a lot about was the soap opera that is europe, and is greece staying or going and whats that mean will it really have some of the effects some of the people think that it might, so i think thats something thats going to play out over the next couple of weeks here. How strong does the jobs report friday need to be to quiet those concerns . From my perspective, im contrarian to dan, i dont think that this market really pays that much attention to what the jobs report is. If its something thats a wild fling, a wild miss then perhaps its going to have some effect but as long as its around where theres the expectations are, i dont know that its really going to have much of an impact. I wonder, sharon, if we should drop everything and buy a house, or try to anyway. And not in new york or l. A. Where the prices are so high. Need to go in the midwest. I think people need to think about a longterm strategy, and i think what this is showing us is you never know what is going to happen. Think of what happened in october and september when we had those days with big drops and what the gut reaction was of some investors, and then what happened after that so you have this whole year to go through, and if youre thinking longer term, you need to be invested keep in mind that you can contribute 18,000 to your 401 k this year 24,000 if youre 50 or older. Reach those maximums and try to continue to contribute to other longterm vehicles like an ira. If you cant buy a house. If youre a Small Business owner, you can contribute up to six figures, so make sure youre talking to somebody about a defined benefit plan or contribution, really serious money for Small Business owners. Now we know you can write checks for nine figures. Thank you, everybody, for being here. Great to see you this afternoon. Fast money coming up with melissa lee. Whats on tap . Two oil stocks you can buy right now, even with oil where it is now. Also got the ceo of web md in a cnbc exclusive. Great stuff coming up. Straight over to you guys. Nasdaq studio overlooking new york citys times square. Traders tonight, another red day for stocks s p closing down nearly 1 today as oil got whacked, closing below 48 a barrel at one point it did look like we could get a turn around adds we saw impressive reversals in apple, tesla also which closed up half a percent and alibaba closing up more than 2 . So, second down day in a row, first full trading week of the year, tim, what did you make of today . Five Straight Days for the s p, youre in a place the market s