Transcripts For CNBC Squawk Box 20141231 : vimarsana.com

Pim. Bond trading wrapping up at 2 15 eastern time. The saudi arabia stock markets, he has been admitted to a hospital for tests. There are reports now that sonar may have detected wreckage from the air asia flight which crashed after the weekend. It is the final day the 31st right, of 2014 . It is. Were done. This is it. Its actually the last day of 2014. Were on now for the sixth Straight Year of gains. That is the longest streak from 1991 to 1999. Lets just hope 2000 and 20011 arent on the horizon. Lets check the futures now. Yesterday with thin trading, well get back some of what we lost yet, up 42 almost 43 points on the dow. The s p is indicated to open higher by six points. And the nasdaq indicated to open higher as it gets closer and closer to that 5,000 level that we havent seen in such a long time. There is crude down 94 cents. 53. So below 355 even though thats supposed to be the bottom along with 60 65 70 75 and 85. Receipts take a quick look at the dollar. Well look at the tenyear note first. 2. 17. Now the dollar 1. 21 119 on the yen. And finally gold, now just under 1200. At 1198. And you cant end the year without a story about apple. Sales are expected to decline, apple expected to sell 68 million ipads in 2014. Sounds like a lot, but that compares to 74 million sold back in 2013. Amazon barnes noble and koogel are expected to post year over year declines and samsung should note expected to sell 43 million tablets and that would be up for them up from 38 million a year ago. Were going to talk much more about the year ahead for apple as it looks to recapture its ipad mojo. A south korean activist says he plans on launching balloons with dvds and usb copies of the interview into north korean. That was the idea when was here. One potential flaw in his plan only a small number of North Koreans would have the capability to play the month very. That might be a problem. As far as getting right . Not dvd players. You see satellite images, you know, at night unfortunately for the people in north korea. But its kind of a dark place. Maybe he could drop some dvd players these days. Lets tell you also whats going on with sony. New details just emerging about the fallout from that attack at sony pictures. The sexual street journal reporting the studio has had to resort to old style communications. They crammed a phone tree to update employees about the cyber attack of person to person when it first happened. The 6,000 employees were forced to improvise using cell phones gmail accounts and the Payroll Department had to cut paychecks manually. Data has been erased. At one point, they found an old cache of blackberrys. Its a very interesting story. Its sort of the goes into what happened over the past couple of weeks inside sony. A pretty good read joe. U. S. Markets were retreating yesterday from levels say the day before. Lets look ahead to the final day of the trading year and then weve move on to 2015. Joining us now, tom manning. Here on the set, steve blitz. From i. T. V. Investment research. I want to start with you, steve. What do you think about the economy and the 5 print that we had and what is the dshg what would you call it . What is the underlying rate . Its not five. No its not five. Its unlikely to be repeated. Probably the real growth rate is Something Like 275 3 . Its much more likely to be the what well see in the coming year. Something like 3 in the fourth quarter. Is it a on a scale of 1 to 10 what kind of an economy is it . Is it above five . You know, ill tell you what still a sluggish economy, he said. Its really not a sluggish of an economy. What we have to recognize currently in Going Forward is the trajectory of growth population of 25 to 33yearolds snor anywhere at steep as it was from 1965 to 1990. So this is a huge longterm dem grabbingic probably youre talking about right now. But youre saying what are we turning into japan . We have young people. Our dm demographics are the he sri of the development world. They have they get back to work. The old people do . Maybe, if the young people dont. So when i asked you if it was above five you didnt immediately say were above five. I think its actually pretty good. Its more like a seven o eight economy. Theres two basic factors, its not going to deliver the kinds of numbers that were using to seeing for this type of level. The employment picture right now. Strong enough to sustain wage gains . Yes, some wage gains, yeah. Also the global economy. Youre going to be pulling people from labor and capital everywhere in the world. Those wages will go up. That sounds like a positive back drop. Are we looking for 5 to 10 on the equity markets . We think we can get that. But its not going to be its not going to be without some choppiness. I think were looking for weakness in the First Quarter in the markets. I think its a little bit ahead of itself. We obviously have a few things in front of us that we need to Pay Attention to. The fed is going to start to raise rates later in the year. I think the market is going to get nervous about that. I do think were going to see some weakness, but i expect a fairley strong year in 2015 given the Interest Rates, even if theorizing decent Economic Growth and the fact that europe is like lie to start a qe Program Later in the year. I think were going to have a pretty good year in 15, but i dont think its going to start off auto a great 12340e9. So maybe give back some of these we have paid it a little bit forward with the moves at the end of this year . Yeah thats exactly what i think. Youre probably going to give some of this back in the beginning of the year. A little bit ahead of otherwise. I think the market is poised to sxernlgs a correction. I think were going to see a 10 correction at some point here in the first half of the year. We havent seen that in a long time. Once thats behind us i think investors will start to move forward. You dont count 99 as a 10 correction, either . Id like to see that 10 number. I mean this by itself well you know intra day thats what i said yesterday. More than 10 , yeah. Thats what the guy said yesterday, because it was intra day. I thought it rung out enough at the time actually there were people that said the earnings come mranls endsy would do. What did the multiple expansion numbers to do . I dont expect multiple expansion next year. I think the market is going to have to have at least modest expansion. The market is going to have to see Earnings Growth to get to that 10 number. I think we probably are going to see in that range again next year. But its going to be really interesting to see what happens when the fed starts to take their foot off the accelerator later in the year. You mean raise rates, right . Hrt. Raising rates. Steve, do you have like an earnings number for the s p or just macro . Im with macro. But i think the equity market looks to me like it can go 8 next year. Economists. I dont trust economists. But you think earnings per share growth can be what . Earnings per share. But i think it will be interesting thing about the equity market is that a lot of people, many people seem to think the equity market is overpriced. Where do you think its priced at . I think its priced just fine. Why do you think the number is is . What is the multiple right now, 15, 18 20 . No, its not like 16. What is yours, tom . Same number. It was zero Interest Rates. Why isnt it 20 . It can be. And even if ratsz were coming down from 10 the multiple could be r. But when theyre going from zero to four its an incredibly favorable theres nothing written in stone that says Interest Rates have especially the ten year which is where everybody finances, it has to go back up to 4 or 5 . Then you can make the argument clearly that like 2. 5 nominal tenyear rate is here for quite a bit of time to come. Then just in terms of where your money is treated best stocks it could trade with a richer multiple then because thats what its based on in other asset classes, right . To stay low, i dont know in were at 16. Weve got to run. Steve, thank you. Tom, thank you. We digit know British Petroleum needed. Is it investing all your money . Is that what you do . No no. Wouldnt you change that name at some point . I was going to ask you, you know, are you sure youre not going to spill a bunch of oil again in the gulf. You come on and people have a negative image of bp asset management. It is. Youre thank you for doing that here. Thats a good idea. Like isis pharmaceuticals, thinking, you know not as good a name as it used to be right . All right. Thank you. Whats wrong, andrew . Would you have bps it sounds like any minute there could be another oil spill. I would sympathize with him. You have that too. Coming up when we return though less ner is laughing. Play book 2015 the activist inskrefters worth watching in the coming months. Then here to take a bite out of this big tech story. And later, uber coming under ride in certain cities. As we head to this break, take a look in history. Welcome back to squawk box. Several cars were assaulted in chicago pap motoren anticipate salt plant wall partially collapsed yesterday. As i said in chicago, sending a mountain of sodium chloride on to a neighboring acura dealership, burying nearly a dozen cars in the process. It looks like snow. Fortunately there were no reports of injuries and officials said the salt inside the building structure was piled too high and its heavy. It caused the interior wall of the morten salt plant to collapse. When you see Something Like that you immediately thought snow as a weatherman, right, alex . At first glance yes. I guess we found out otherwise, right . Right. Meanwhile, this is incredible. Yesterday we were talking about this arctic air that was going to take over the middle of the country. The windchill values you factor in the temperature and a little bit of wind. Here in laramie, welcome, it feels like its 55 degrees below zero. Unimagine blg unimaginable. And through friday sliding across the plain states down into texas. High temperatures will be 15 to 25 degrees below our average. In places like amarillo with highs today in the low 20s. 23 degrees. 28 showing up for you in and around oklahoma city. At the same time youve got this storm system here in the western part of the country. Moisture coming into that cold air mass. That sets the stage today for snow in the panhandle of texas and tonight as we try to ring in that new year for freezing rain. And that could be problematic. Dallas to abilene. We were traveling aalthough long that interstate 20. Not the case in the northeast. Its going to be chilly in new york city for the big ball drop. 28 degrees to the midnight hour with clear skies. Farther south, also dry. A little bit on the cool side with these 30s. Teens and 20s across the midwest. Were looking at Clear Conditions here and a quick check on the west coast. We are dry in san fran as we ring in the new year. 48 degrees. Guys, back to you. Thank you for that. I would never want to be standing outside in times square. Have you ever done it . I have never done it. And you live there. As i kid i wanted to. I used to watch it on tv. Where do they have the relief facilities, do you know . I do not know. Theres a Million People. Im sure they must have relief facilities. Were looking at a live shot right now at sometimes square. Its better now, but it used to be one big relief area did it not, at one point . Its better now, right . Yeah. For adults or for everybody . For everybody. Yeah but at disney world, usually mickey doesnt cold cock people walking by. That happens there, right, with elmo and company . We had better get to our next story. Okay. All right. I just wanted to make sense. As 2014 draws to a close, cnbc is looking at what you can expect in the coming year. This hour though hedge fund activist kate kelly. January is Vacation Time for hedge funds. For better or worse are starting with a clean slate after marking their 2014 performance. But after two long years in activism, things arent going to be quiet for long. Bill ackman at it again. Though he didnt prevail in his takeover of the Drugmaker Allergan he made billions when it went private on him. Expect ackman to prepare for a new takeover. And Animal Health nut coetis could be one to watch. The sunsets on a crucial element of the countrys contract with other lenders on december 31st that made masters hard to settle. After that it will want to get rid of its pesky vulture investors who whom it owns 1. 5 3w8 in cash. With crude at less than 60, expect someone like dan loeb or David Einhorn to go after drillers about inefficiency. With the pain theyre facing the Companies Might even appreciate it. Joining us now with more on this year had a great story about the highs and lows mentioned a couple other names in there. One of whom i had not focused on at all who had a huge year this year. Adage capital in boston. Its bigger than citadel. And youve never heard of them. How much money do they have under management . Sgldz 28 billion, not 28 billion, not that much. And what were their returns last year . 28 this year. And that put them where . Were talking about 7 times average stock. With huj fends, everyone is froze to come out with a lot of money. Its a closed fund that they dont charge fees except on what theyve done with the s p. Theyre actually going to make a little less. Most of the Hedge Fund Managers did quite poorly. The index you threw into december, they only gained 2. 5 on average. That is correct. So when you think about the big winners bill ackman hes always going to have a big year hes always going to be one of the extremes. Citadel, ken griffin, came back this year. He came back. Its a poor time for his personal life a public messy develops divorce. Hes raised 5 billion in extra money. But the returns were good. The returns were great. Up 23 in the equity fund. I think theres i think a mutual fund will take that. Who was the big surprise loser . I think your big surprise look john paulson, it was a big surprise for him because after the first of the year he was okay. Shire deal fell apart and he fell apart at the same time. Anybody else . Sure. Theres a fund called Mason Capital management. These guys call themselves risk albatross specialists. Down double digits for the year. Thats a pretty bad performance. Whats happening to those guys . Look you see rhode island right now is in a closed session. They wont say theyre pulling money from mason, but this hedge fund, it seems to be when they beat the market they say were geniuses. When they dont beat the market theyre saying were giving you uncorrelated returns. Its not necessarily one year of bad performance. Where does your point land do you know . No. This one is in the continually digits digits. Tepper has been changing his tune over the past year. In may, he was saying you should hold on to some cash. You should be no no what his performance was. Mostly just this year. But it was up. It was up. Earlier this year there was a big issue about talpers. In a year where the average is 3. 5 and the s p is what it is do people say, you know what . Maybe were making a mistake. Do you think thats an aberration. I think it takes more than a few months even more than a year for these changes to happen. I think if you talk to the pooi people in the industry its hard to find someone making a big move. But what theyve done is put this topic on the table. Weve seen years of money coming into hedge funds nonstop. This is really you know at least opening the conversation. Has paulson make any money since he has. He had a great year last year, up more than 50 . So the bad bet on gold year . I think last year he had done tremendously well. Up like 31 or something from what he icahn is hard because he doesnt v to charge fees. Anything he quotes is going to automatically work better than hedge funds. Thank you for coming in this morning. Coming up, if there was any doubt this was a big year for apple, well the Holiday Season seals the deal. More than half of all new devices activated worldwide in the last week came from the tech giant. And a stock chart tells the same story. Shares grew more than 40 in 2014. Were going to ask what tim cook is planning for the new year next. First, as we head to break, here is a look at yesterdays s p 500 winners and losers. Good morning and welcome back to squawk box. Im joe kernen along with andrew ross sorkin. You should just come clean. I have a cold. Were in a business why sleep is you dont get a lot of it. Precious. And when were able to do it im pretty good at it. Sleep . Yeah. Anywhere. I think that might be an age thing, which is pointed out by people in my family where you know, you ever see a person just sitting there and suddenly theyre sleeping . Like an old person . Yes. That would be me. Becky, thankfully is going to be back on friday. She should be well rested. Although they has a young child. We have jobless claims weekly initial jobless claims out a day earlier coming at 8 30 eastern. Well get that later this morning. And well get the latest look at pending home sales. A measure of contracts signed but not yet closed. And flu season. I dont think i have the flu, though. Flu season has reached epidemic levels. The most prevalent flu virus has mutated since this years flu vaccine. Once again, im glad i i got the flu shot. I just want you to know i got the flu shot then i have no fever. So i dont think that im the stupid thing, the vaccine was formulated, it mutated since then, so the vaccine might not even work. And how about that . Do you want to read that . Minneapolis fed president mariana katchalakotya says the risk of deflation there it is. You see, if you werent into that you will crash head long into na. Practice that. Id talk about him, kocherlakota. That was good. Not as good as his first name, naryana. Is he the one that says hes leaving . Somebody is leaving. Has he come on to the show . I dont know. Liesman has been with him. I dont know whether i dont think that we have, right . I dont know. Says the risk of deflation is glowing, that the fed should take that into account when it makes policy decisions. This guy has been a little bit more hawkish. He was at the center to the feds most rehabilitate policy statement which down played that risk and laid the groundwork for a possible rate hike later this year or as of tomorrow it will be later this year in 2015. Theyre crazy. They might get above zero. They may be an Interest Rate again. These guys are wacky. Theyre liable to do anything at in any time. 5 unemployment and a 5 gdp, and here they are thinking about raising Interest Rates. Crazy. Wacky. Crazy. Nuts. Lets check on the markets this morning couldnt come too soon. I think i could go to a quarter or a half. I think i would just make it be known that there is something called an Interest Rate that is charged, you know . At this point, its a dual mandate. They figure what have they got to lose . Zero inflation or whatever it is. What does it hurt . So we look at the future take a quick look were up about 40 points right now on the dow. Up six on the s p. And on nasdaq youre up nine. Riding along, its nice that youre listening to us but i found something called bluesville. Bb king. I never had it before on channel 70. Are you suggesting that if you just want to take a break, during a commercial or something, bb king. You saw oil, 53. What will 2015 bring for oil . What will 2015 bring for oil . And for the tenyear. You think a four handle . You think a three handle. I dont know. Im ready for its too good to be true to be down here. But i would like it. That would be great, yeah. Three handle . If its a three handle i think we have bigger problems. We have experts that didnt think there would be a seven handle. Who are we . Nobody. Nobody. Apple blowing away the competition this season. According to flurry. Apple is eating up and sliding off profits from the other new devices, leaving just a core from the testifiation around the world. Here to give us his take on how dominant apple will be in the new year is ed bagey. I just need to know about the watch. I dont like the watch. I dont want the watch. How come . Because you need a phone to use it dont you . You do. You do. Now, we got a glimpse of the watch in the fall but of course nobody has really gotten to play with it yet. All eyes are indeed on the watch. I have not found a wearable device that i feel compelled to buy. The big question is apples watch going to be the one . Certainly it looks nice, but begin, it was an early propoe type. Im waiting for the dick tracy device. How far off is that . You can get a call make a call. But you need the phone in your pocket, exactly. And youre still going to need the phone in your pocket for this. I dont know if its delayed, per se but clearly they showed it to the public and now its taking them a while to make it a public relead. Jaw bone the new jaw bone three, thats now been delayed for the next two or three months. Fit bit, same issue. They seem to have a delayed product. Is there some piece of the technology that they expected was going to washing or that was going to be he easier to manufacture than it actually is . That is my guess, but i dont know that for sure. Its interesting because theres been so much attention on wearables, next week is the Consumer Electronics show where were going to see a ton of these things. But again, we still havent seen that one device people will buy. If youre into fitness, youre going to buy a fit bit. Theres a lot of them with a lot more coming. I dont know exactly why there are delays but apple has to get this thing right because theres going to be so much attention focused on this device. Ed you know in 2014 weve asked this question a dozen times. Apple tv. Right. Is tess sa too sxevensive . Would steve jobs want to do a why not buy tesla and turn it into an apple car and just make it its unbelievable now, but really take it to the next level. Too expensive . Its pricey but if somebody would have done i, you can certainly imagine steve jobs doing it and it will drive you around, right . We might be flying the teslas around right now. That could very well happen. Just say i want to go wherever and it will take you there. As were moving forward and technological jumps seem to be coming even faster we need to start figuring out what is going to happen in 2015 and 16 with Something Like apple, dont we . No. I think 2014 was clearly the year of the bigger iphone. Everybody wanted that. We see what happens. Big success ago you guys pointed out. Im walking here down in miami beach. And lines for the iphone even know. Granted, ooims its christmas week. That surprised me. What is coming next year . You point to the watch, point to apple tv. I dont know apple is going to do a tv per se but i do think theyre going to scoop up the fed top box because theres a lot of competition in that space. Do you trust him, tim cook to continue to carry on the apple tradition . For a while, it didnt have that tradition. Youre a usa today guy. Im not going to ask you whether you buy the stock. But you think he is going to continue to innovate in the way we expect from apple . I think so. This was really a big year for him in many ways. And so there is no reason to think that they cant continue that momentum into 2015. Will they stumble . Certainly thats possible. The apple watch, i think it will probably sell well because of a lot of curiosity, but it could be a best. We dont know at this stage. There is a rumor going around theres a new 12 inch mac air book that could come out. And i read another rumor that suggested not only a regular operating system but somehow there can be touch capability. Weve seen microsoft move to a device their service, that works both as a tablet and a laptop. Do you see apple converging those two . Weve seen the two operating systems conversion. There is a lot of overlap today. So weve already seen that happen. Apple has been very careful, though to keep them separate. Microsoft got a lot of criticism for windows 8. It white sox for some people it doesnt work for others. So apple, i think, has to be careful here but i wouldnt be surprised if we see an even further push into overlap territory, if you will. All right. Is it you see what i do i say beg and i go with it. Its baig . Its baig. And then at the end, ill ask. Anyway, thank you. You got it right. Thanks, ed and happy new year. Happy new year. All right. Go ahead. What were you going to say . Are you going to see see it for the new year . I knew they were going to play some bb king. You know bb you know how great hes been his whole life. You know how old he is . Ohio old is it. Hes a little under the age of 89. I think he briefly stopped touring at 89 performing and touring. You would to get ip expired. At 89 hes out doing what he loves to do. You know where hes from . Where . Indianaola mississippi. I dont think albert king is related to him at all. Still to come on squawk box following . I am following you. Why uber is counting on tonight to be its biggest revenue generator ever. And then at the top of hour a case of the tech blues. Why ibm is trugelling to keep pace with its peers. Plus, why january could be a less than stellar month with stocks. But first, a quick check off whats happening in the currency market right now. Coming up uber expecting new years eve to be its biggest day in history. Were going to talk uber with all of its world of controversy when squawk box returns. Welcome back to squawk box this morning. Tonight could be the biggest money making night ever in the history of uber. They expect 2 million rides tonight into tomorrow morning, so if the company can deliver and pricing is consistent with that of last year uber could generate more than 100 million this new years eve. We have the managing editor for recode, great to see you this morning. Yes. A hundred million dollars, first of all, is that in fees to uber or revenue to drivers . Its going to be a hundred million revenue to drivers. Take 30 . 20 to 30 . Theres a range. They are not taking dollar number one by any means. The big issue from a publicity stand point is always what the surge price looks like and how many customers take to twitter and facebook everywhere else to say they are ripped off at nine times whatever it is and they were desperate to get home and them remember last year, somebody actually went online and said that they had the surge was so high that they needed to raise money to pay for their rent the next day because they didnt know what the actual price would be. Theres no way you call and they say, no way for app hour. Does that ever happen . No. Its so market based. They just raise the price. Its a function of the fact when they surge price, it signals its not working. You know . Thats the idea of around uber that Social Security fast convenient, and cheap, or cheaper than what you normally pay. That seems just logically impossible. You think there no. It seems like there will be times where theres not going to supply, and if demand goes up the price goes up. Price goes up. Its a market economy at work. I thought they would do better publicly if not only surmg surge pricing, by lower pricing. When it was over saturated, they lower the price, and the customer feels, like oh this hour, 20 off everything because of the drivers out there. The thing is, they never have enough drivers. So all the customers for new years eve heres how you avoid surge pricing. For them they dont want people to all want cabs at the same time. Of course, a night like tonight, its not going to happen. Weigh in on this. I was on closing bell yesterday you were . I was. Arguing in favor of uber as they had a segment on whether uber and ride sharing was in the future. In new york city . I was in new york city. I did it from 30 rock. You did, okay. They did a vote among the viewers of whether ride sharing and uber were the future relative to people owning veegs vehicles. I was on the side of the ride sharing side and there was an expert from california on the other side. I lost the debate materially 80 of the viewers think that ride shareing will be a grand failure. This that way, it was like squawk box. Kind of sort of. I wanted to nowhere mr. Lee stands on this. Coming down to where, you know, we live in new york. Were not really car people. We dont we are not used to having cars or reliant on them necessarily in terms of owning them. I think the idea of you know one day someday in the future people wont own cars and they just represent time in cars whether its an uber service or a rental car service; thats something out there. People have been discussing this in terms of how the Automotive Industry could change, but it comes out to where you are. I live in new york. I, you know do you expect uber to go public in 2015. I dont think 2015s the year for it but soon thereafter. The 40 billion number make sense to you . Its a good question. That story of uber thats predicated on the ability to expand around the world. They need a foothold on major urban areas before copy cat services. Its just a service. They are not infrastructure based. I used a copy cat Service Called gett. Gett. They offer 10 anywhere in new york. Hard to get a car, you press the thing, and you really have to wait, but if you can get one and go all the way uptown its ten bucks, its a great deal. Its a promotion right now. I did it once, the rest of the time it didnt work. You have to try more than once. It could be a longer conversation. Which closing bell were you on . 3 00 . 3 30. Dont you have an agent . I mean, did you when they called didnt you say, 3 00 youre up at 4 00. You dont i was im a company man. Oh. Im a company man. You know im trying to you know, i love cnbc i love nbc universal, comcast, i want to be part do whatever the family needs. Big trouble for big blue. Worst buffet pick out of 30 stocks pick the worst one. In fact, one of the years worst performing tech stocks. Anyway, one of the worst in the s p 500. Whats plaguing the company and what it takes to jump start the stock. Plus todays guest host made a career out of numbers. Well get his market targets for 2015 when squawk box comes right back. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. The markets about to ring in the new year. The dow about to make its sixth Straight Years of gains. Will 2015 provide more fireworks for investors . Black and blue ibm beat up in 2014. Its going to be the worst dow performer of the year. What is it going to take to turn the company around . And want new year brings pay raises. The minimum wage about to move higher in a hand full of states but the fight over the wage hikes far from over as the second hour of squawk box begin right now. Welcome back to squawk box here on cnbc first in business worldwide, im joe with andrew and becky is off today. Well see her in the new year, in fact, the first trading days of the new year. We have ed, portfolio manager, and we are counting down to the new yore here in the new york city area we a 17 hours away. Times square is already getting busy. Up to a Million People expected to fill the streets to watch the ball drop on 2015 and you know what andrew . I would say that it probably will be a pretty safe place to be. Thanks to who . Who . Thanks to the new york City City Police department. Thanks to the nypd. When i went to 30 rock yesterday, times square is covered and whatnot. They organized everything. Without comment, mayor, anyway, go ahead. That was without comment. I didnt comment. I just mentioned someones name. Your mayor. In the head livenlines this morning, the merger complete now as of this morning. The combined company is walgreen boots alliance. Its a u. S. Based company as opposed to an inversion. That was the big debate over the summer. We have to tell you apple is on track to post the first yearly decline in ipad sales since the tablet was introduced but the Market Research firm says tablet sales in general, apples in particular should rebound in 2015. Watch for that. As the year ends which of the mayor world stock markets performed the best in 2014 . The answer . Do you want to guess . China . Saw it on the prompter. Countrys major stock index ended up more than 50 . Most of that in the last few months, so not so bad. We do have less good news out of asia. We have an update on the air asia search. Reports now that sonar may have detected wreckage from the air asia flight crashing over the weekend after debris and bodies were discovered. They battle bad weather in the recovery efforts. I dont know if you saw this. There was a report out that one of the bodies found had a life jacket on which created all sorts of questions about how much time the plane might have been in the air from when they had a problem to whatever that impact was and whether and why there was no distress signal sent, and, of course well try to answer the questions over the next couple weeks. Right. That, you know its you should have the black box, get an idea. Ive seen a lot of analysis in the nightly news that because the pilots never really responded right after they had basically asked for permission to go up, that they were dealing with something immediately where they couldnt even radio. Pilots have what they call tunnel vision in emergencies. You dont think about telling anybody about anything because you are trying to keep the plane. Theres a lot of copconjecture. If you leave automatic pilot on sometimes i guess it shows you something thats not true, and ice gets in the instruments. How cold was it . Well, at 32,000 feet if you are in a thunderstorm theres going to be ice. If you they do things like they pull up or do things that cause a plane to stall, and you cant pull out of a stall. All that as we find out will get more horrifying i think, but you cant help but think what its like if you had time to put on a life jacket you know anyway. Lets check the markets. Books are about to close on 2014 2014. Dows on track for the sixth Straight Year of gains. Longest since 1999. The nasdaq and dow up, not six straight but five of the last six. Lets check the futures now. This morning, we were indicated up 40 points. Most of the morning. 36. 95 and some change on s p and almost 9 on the nasdaq. Oil continues to trade lower. I would think it would give us a tail wind for Financial Assets but we do know that the s p has a lot more Energy Components now that weve become you know a more productive nation domestic nation for oil and gas, so theres downside i guess, but 53, almost 5 2 now. 53. 04 is crude. The tenyear this is what well watch closely next year. Again. If you would have polled people on december 31st last year the year before the year before and year before that they say 3 . It has not happened. They are saying it again this year. Well see. The dollar is below 122. 1. 21 now. You dont have to be a genius to think the dollar will continue to do well. If rates go higher here if germany allows qe over there, youd think ed that the trade would still be short the euro. I dont know. Well see. Finally, gold, take a quick look at where that is trading this morning. It was just under 1200. Still is down 2 at 11. 98. Okay. Ibm is hours away from dow infamy. They are on track for the second Consecutive Year as the worst dow performer. First time that happened to a dow stock since 1995. We have more on that story and mr. Buffets pick perhaps. Josh . Well, andrew, maybe its new nickname should be big black and blue. Thats how much a beating ibm stock took this year. Ibm shares nose diving some 15 . That means ibm has the dubious distinction here as being the worst performer in the dow by a long shot. A big knock on ibm is missed how disruptive Cloud Technology would be. It departments are moving to the cloud because they would rather subscribe to software accessed over the internet rather than buy it. You have the small cloud players that dont have and dont need a lot of infrastructure, and they can offer solutions that costs less. It comes in more quickly, and i think ibm, not to say was blind sided, but, yeah, caught off guard. The ceo is looking to grow the Cloud Business ogranicly as well as making accusations like buying soft layer, and they are scaling quickly at 4 billion, a relatively small part of ibms overall revenue. Bulls on the stock argue its not expensive, and analysts suggest that activists could get involved in big blues board room, but its the bears who are in charge of ibm right now and if this trend continues, they are likely to find more pressure from shareholders in the new year. App drew back to you. Okay thank you for that. Whats it going to take though to turn ibm around and is the right person to do it . Joining us now is david, a Tech Industry veteran and principle at gva research. David, is there a shot here . Is there a way for mr. Buffet to get money back . Certainly theres a way for buffet to get money back, but it involves radical surgery on the part of ibm. What you have to consider apart from the movement of the cloud is that ibm historically are strong in emerging markets. Theres news like places in china, a major market in and of itself that in china, they want to rely wholly on their own native or local providers. Talk about a growth story for ibm as the rest of the world moves to technology thats. Taken away. Obviously, what we need to look at in terms of ibm, we need to suspend the buy back the company says, look, we suspend dividends dividends, and theres a deal with warren buffet with a deferred. Do they hang on to the business . Is it that instrumental . That remains to be seen. Well see an ibm in smaller pieces by 2015. Is ibm protected from the activist investor, if you will but buffets investment in the company, or do you expect investors coming in to suggest radical change in the new year . I dont think to explain warrens presence in the company is being something thats going to keep other investors away particularly if they are successful in convincing buffet for the need for change. Certainly to the extent that warren has his own legacy to consider in terms of his investment track record, clearly, he himself, is going to be agitating probably for more significant changes. When you say significant changes, are those structural changes done by current management or calls for new management . The current management understands the company well and the challenges well. I think hes been dealt a difficult hand. She basically inherited a strategy annunciated by predecessors to get the company to a 20 eps number and from that standpoint a lot of the Financial Resources went to shrinking the base of shares outstanding. She, by the way, she and others, the cfo, argue you with pursue buy backs and Dividend Program at the same time you manage your research and development and all that. Revenues are below just making the argument. I made the other side of the argument before. Well, your argument works for ibm. David, this is sad to watch. Im telling you now, hitting up the numbers here apple 660 billion in market cap. Google, 362 billion. Google. Microsoft right now has market cap of 387 billion. Facebook, a cap of 222 billion. Ibm, 158. All those companies have a bigger market cap than ibm. This is the preimminent tech company of the world in our generation when we were born david. This is sad. Sad. Sad. Sad to watch. Its not just that but its painful. The thing you have to consider like watching kodak in slow motion. Look at hewlettpackard, Something Better and closer example, and we know where they are going now in terms of breaking up the company. Certainly, we think that whitmans done a capable job there. Or oracle 199 billion versus 158 billion. They are multiples of the cap now. Right. The other thing to consider is when we look at the Cloud Computing model, obviously, ibm should be investing in data centers, not dividend. And getting revenues to grow, right . Right, right. Amazon is expandsing. They dont pay a dividend. Google, same thing. From that standpoint ibm has to let people in the finance side go to the back and basically bring the technology forward. Main problem ibm has is buying companies, obviously, its more expensive. Granted, they are not buying uber. Thats a 40 billion valuation. Look at the other companies out there in the technology space, whether its dropbox, fox, prices of the companies are up because the stock market is stronger. How many times can you bring Something Back from the dead . Had to do it once, and paul did it. Is it possible . How many times can you do it . Three strikes youre out . At ibm, its possible. They have the largest patent portfolio in technology. Dont you hate, andrew, when people talk about patents worth a lot . They had to stay with blackberry. They had patents. David, we appreciate it. Happy new year. Happy new year thanks. What about you . Buy ibm . Not individual stocks. Who says you cant . Qma . Who is that . Financial, financial, yeah. Anyway this years big gains loosen up. You know youre on squawk box, give us information here. Maybe not. History any guide . Running through the numbers, and a wave of states hit by minimum wage hikes this week. Well debate the Economic Impacts of that. Later, what happens when you mix an old typewriter with a cup of waffle mix . Huh . The answer to this riddle involves a big bucks kick starter campaign. Its cool. First, as we head to break, shark tank, a wish fortunate new year. My wish list in 2015 more green technology. I also want Financial Intelligence in schools for kids to learn at an early age. Bring back 8 tracks and kevin needs to stop offering royalty deals. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 Straight Years. One pill each morning. 24 hours. Zero heartburn. December is one of the best months of the year for investors, and this years santa claus rally was in exception. Will returns carry over in the new year . Dom chu joins us. Good tips . Yes. So speaking of 2015 talk about this thing that people call the january effect. Its an idea that perhaps stocks rise in january. All the tax selling that happens in december some of the weakness that we see gets resolved in the month of january, so we asked our partners at Data Analytics firm to crunch numbers. They looked over the last 20 years for the s p 500 and the dow. You see januarys a mixed bag. You cant say its a positive month. S p is up an average of just about half a percent, but it is positive, 60 of the time. The dow, however, posted an average loss of one tenth of 1 . It seems flat. It just tells you the s p, the dow, both large caps are not really stand outs to the upside no matter how you look at it. Thats over the last 20 years. If you look at where the sector stand outs are there are a couple places in the market you want to Pay Attention to because over the last 16 years, the reason why we chose 16 is because some of the sector etfs along for only that long. The best is the xlv, the health care etf. Its up over 16 years. The worst performer is material stocks, xlbs. Its down 1. 7 . January, interesting enough people always say, oh its generally positive mostly december, though that the positive one you want to focus on for the month of the year and just to keep an eye on health care and Energy Stocks are out performers. Guys . January effect is real. So it december. As we know now. December. All the money managers. Over the last hundred years, decembers up 1. 5 on average. 73 . I never believed in month of the year effects my whole career, but after this 20 years, the december effect just keeps happening again and again and again. Its people its involved in all the frequent markets. Theres marketing, and these guys need to mark it up. They have to look good at the end of the year holding up stocks that are winners, right . It reverses the next year. Some of the low priced stocks sold for tax reasons then get bought. January, for many years, is considered a small cap month. Right. Last few years, its not been good. Its a mixed picture. The point is something longer term, not just month to month. People talk about the january barometer as well right . As goes january, so goes the rest of the year . The folks at the Stock Traders almanac point to the success rate of 77 , they say, of how the month of january does. This year it did not work. January was a down month. We have an up year this year. It didnt work in 2009 or 2010 either. During the quantitative easing campaign, the stock market has not traded like it has over 50 years. All right. Are you exercising . Trying. Eating protein . Eating well . Yeah. Keep me updated. My resolution. Work on everything you said joe. Okay good boxers are the most important. Eve of the new year and with that comes prognostications with the Market Performance ahead, but ed bucks the trend in the forecast. He expects double digit returns for stocks. Probably 10. As opposed to the high single digit consensus. Ed is our guest host today, portfolio manager. Be surprised with 15 . I would be surprised. Delightfully so. Rather than 8, youre 10 . Crazy. Youre nuts. 10 to 15. Yeah. Why . Well i think this coming year is going to be a year where we see valuation increases. I dont think greens growing faster than they did this year but i think with interest rating will be as low as they have been, and i think they are going to stay fairly low, that it makes sense that stock market valuation should be higher because if rates are lower, you need higher than normal valuations. Thats the driver of returns in 2015 and beyond. I kind of am with you on that opposed to what most people say to us here. I think its been an interesting 2014. You look at 15 out of the stock market but the leaders were the defensive sectors. Utilities up 30 . Nothing to do with matching Earnings Growth. Well, i think it had to do investors wanted two things they wanted safety return from government bonds, and they wanted income. Utilities did well. They wanted safety within the target. They bought lower beta stocks Like Health Care and utility. My point was it was not the appreciation in the stocks that did not match the Earnings Growth. Thats right. It was higher. It did get some pe expansion this year. I think thats going to carry over into next year. At 16, i dont know why you cant get some even if rates do rise because its still you do the discounted future value of buying up a fixed income vehicle versus something in the stock market, and the stock market is more attractive. I agree. Look at before and after the financial crisis. The bond market had a gigantic jump in valuations. Take germany, for example. The bund used to yield 4 now its down 50 points. The dividend yield, the dax was 2, 2. 5, and now its close to 3. The United States is not as dramatic, but theres a run up in bond prices and bond valuations, but you have not seen the same thing the dividend yield on the s p is not as high. I wish there was a pe equivalent to the valuation in the bond market. I wonder what it would be called. 50 times earnings. Right. The bond market is 50 times earnings. Would you take that stock guaranteed to have no growth . Of course not, but essentially thats what you get. Well talk more about it. What were you doing the entire time we were talking . Writing notes about you. Back and forth. Could you count anything that we said . I can recount the entire conversation. Coming up Small Businesses called the engine of Economic Growth, but as the new year begins looking for news my friend, theres a challenge for new employers, minimum wage hike. Does it provide a boost to employees or a business killer . That debate still ahead, but first, 2015 wishes from our favorite guests. My 2015 wish is a functional u. S. Congress. Steady and sustained growth in the United States and around the world. Peace, prosperity, and hope everyones on the right side of the stock market. Coming up minimum wage hike taking effect. Raising the wage of 3 million workers. Does it make good economic sense . Well debate that issue when squawk box returns in just a moment. But im a bit skeptical of sure things. Whys that . Look what daddys got. Ahhhhhhhhhh growth you can count on from the bank where no branches equals great rates. 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. Welcome back this morning, in the headlines, wall street wrapping up the years with several reports today. The first number to watch, initial jobless claims out in about an hour, and claims are expected to rise from last week, up from 280,000 the prior week. Well get the latest on pending home sales and weekly report on Mortgage Applications from the Mortgage Bankers association, but its announced theyll release the data a week from today on january 7th. Hold your breath longer. A federal judge recommending approval in a lawsuit settlement to challenge a former Abercrombie Fitch executive, after they failed to release too many shareholder claims. Does he still have the private plane . Wear the boxers . Remember that whole thing . Boxers . Remember that . Seating assignment for the dog. Phil coal lips right . Take me home. I like that part. Had to wear flipflops. They needed the whole thing changed. That needs changed. Saying only the cool kids can shop here. That needs to be changed. What about the naked pictures . Right setting, right context. Or almost naked. Not on a billboard and not with 14yearold models. What about you . What about me . I will tell you when we landed in italy, there was a naked breast on a billboard. Things are different. Its not like this everywhere. My wife would support the dog having a seat on the plane. Right. So that seems sensible. Under the seat. Yeah. Its good if the modelling career. You look like a lot of those guys. Thin six pack. Well you know. A big win for underarmor the athletic gear company signed andy murray in a deal valued at 23 million over four years. I would have i would have preferred bill murray. Anyway, great for tennis. Tennis players, you gloss glossed over the bill murray. Hes a good golfer. How much would you pay him . Bill murray . Yeah. Have to discuss that. Murray had been under the andy murray was under contract with adidas expiring this year and the spokesman said he would wear the shoes through the first half of 2015 and according to analysts under armuoour took second place behind nike. I own one pair of their sneakers. They are good sneakers. They are on their way. We had kevin plank on. We talked. Theres no reason he doesnt think he cant someday pass nike. Nikes market cap, is that above wonder if thats above ibm at this point . Bet it is. . Its not. Its the its only 83 billion. It is half. It became the biggest Apparel Company in the world, and the guys not that old. Phil knight at this point. 21 states and kevin plank is like, your age, isnt he . Hold on ill tell you. Maybe 48. A little over 40. 42 years young. Unbelievable. Isnt it . Anyway, 21 states set to raise the minimum wage kate rogers has more. Some workers ring in the new year with a raise you mentioned thanks to annual cost of living wage hikes in the midge mum wage and increases voted in midterm elections. Arkansas connecticut, hawaii maryland massachusetts, nebraska, rhode island south dakota, vermont, and West Virginia are the ten states with hikes on the way thanks to both ballot measures passed in the midterms as well as moves made in the 2014 legislative session. New yorkers, the lucky ones get an increase today, december 31st. While Small Business owners feel the pinch, so too will franchisees caught in the cross hairs of the fight, and wages falling 15 app hour, according to the franchise association, there are more than 770,000 franchise establishments with 18 million employees nationwide. The ifa says all franchises will be impacted in some way in these states, and that 85 of the membership believe they are negatively impacted by the changes. The current federal minimum wage at 7. 25 an hour and National Average after the hikes kick in is 7. 75 an hour. The top five franchises will feel the impact is subway mcdons, kfc, burger king and 711. The fight picks up where it left off after congress meets in january. Back over to you guys. Thank you, kate. Lets bring in the senior fellow at the center for american progress. You figure, christian, we off camera talked to ed. I guess, if you just look at it and do the math you can understand if a company has a certain amount of money to pay a certain amount of employees if the wages go up per hour it means less employees, but the argument from people in your camp is that if you raise up the bottom for society, people at that part of the income stek trum have more money to spend on goods and services and therefore you get jobs in other places to make up what you might initially lose in the specific companies. Is that how it works . Well thats one way. The other part is i mean, thats one of the arguments. Its more buying power. Its not just my argument. Walmart makes the saim argument. I mean the big retailers, else the ones caters to low wage workers and lower income workers are worried, and they are silently, at least not opposing a minimum wage in connection with, but saying they could easily handle it. One positive benefit is greater buying power. The other part is we know if the minimum wage goes up, people are happier in their jobs less turnover, increasing productivity. Companies can easily recover the cost of the higher minimum wage. You see the companies can recover it and its slightly higher prices. Were talking minimal price increases and slight cuts. Chris, the argument that it has a negative the argument it has a negative effect on employment assumes the companies have absolutely no way of raising prices and no profits. I understand that. We know that neither one is true. Right. We know that its not totally in elastic either. You cant go to 40 an hour and not expect that to be negative to jobs. Were not proposing it. Im not saying anyone is proposing it. But theres a point where it becomes negativing and in general, price controls do not work because of the way the price the way supply and demand works. Price controls . Remember nixon . Wage price controls . Wage price controls. In general, if you skew the normal dynamics on supply and demand, there are things that happen that are negative. Would you agree with that . Youre painting a counter factual that no one is talking about. Nobody at american progress. Its talked about, christian, it is. No. At this otherwise raise it to 50 an hour. If it was not talked about. Look, at this point its a Research Question where the breaking point might be, but none of the minimum wages on the table, both state and federal level, are anywhere where we expect pressures, in part because we are talking a very, very small fraction of the labor market. In templerms of the impact, were talking a lot of people, but earning relatively little money. The total income going to people who would be impacted by a higher minimum wage, talking about the federal level at 10. 10 an hour is 3 of income. Raise the incomes by 10 , thats a small fraction of the economy that has that would be phased in over two to three years. Youre talking very by making that point, why has it been so front and center and not only that but the two or three youre talking about, a lot are young people just getting into the work force, working part time youre wrong about that 90 are 20 years old. Why is it a priority if it affects such a small amount . Small portion of income. Its 2 of income. It affects 30 Million People. We have a problem that we have a fairly concentrated group, a large group of people working in a low wage labor market but in terms of the overall economy and effect on prices and profits, its a small share of relatively vastly growing economy, so it would affect a lot of people but its not costing much money. Its spread out over time across the economy. Everybody would rather have stronger growth and stronger economy, and 25 years ago, every economist would have said you raise the minimum wage its bad for the economy. Theres. Research to suggest that the answer is nixed. If i had a suggestion for you, christian, talk to awe for brooks, do joint research to say octoberively, thats the impact of a higher minimum wage. We have a great natural experiment in the country. Its a great opportunity to study. Why not let states decide . Let me be clear. When we say the evidence is mixed. Largely, evidence says it has positive employment effects or no employment effects. The studies that says its negative are outliers. The serious studies, one of the most heavily study. There was a good study last year, but the point is maybe higher minimum wage leads to higher productivity and motivation and so forth. Its not fully established. Better off in the long run and the people making the minimum wage to make a strong case that guys like joe agree with its better for the economy. Just making the case based on ive been here often enough i like talking to joe, but trying to convince joe is im not the right guy. Hes convinced by evidence. The in the end like this is one of the most heavily study issues. We know theres a number of mechanisms by which the minimum wage works positively in the economy. The first one is it raises buying power. The lowest paid workers in the economy, 90 of them are older in 20 years. Most of them work full time. So this they will spend this money immediately. It will be direct boost for the retailers catering to the low wage labor market. We do know that higher wages i cant argue with him because i have to like talk over you to get a word in edge wise. You cant full buster and expect me to be convinced because i cant hear what you say eventually. Andrew, why do fast food employees or fast food managers talk to anyone in the business and they say it has a significant effect on what we can do . What do you expect them to say . Of course theyre going to say that. They are the ones deciding whether to hire more people or not. If i was the ceo, i want the lowest price in every market. . Thats what marketers do with prices and wages. The question for christian, though they are just bad people. Its not that they are bad people, but they have the motivation as a ceo im trying thats what the economy is based on. I want the best people for the lowest price. Usually let when you have slack in the labor force, people come in and work that. The question for christian christian, help me with this. One of the things you mentioned to joe, and joe said was that a lot of these people were either in college or these were first time jobs. Give us numbers, if you have them entry level positions, that these are entry level positions because one of the things we have seen over the years, you look at ups, for example, a lot of the people who started on the truck ended up in management. Same with fast food and retail. Those who benefit from a higher minimum wage youre talking about people who are between existing minimum wage and the new level is slightly above that. Youre talking 90 of the people roughly 80 to 90 are 20 years and older, more than 50 work full time. They tend to be predominantly white, disproportionally women, primarily the main breadwinners for their families. You said mostly over 20 years old. That seems entry. What are the numbers over 30 and 40 years old. I dont know off the top of my head. Youre talking theres substantial people affected by higher minimum wages at higher wages. This is not the Typical High School worker. The typical worker is a single mother working full time in the health care industry. The other part i want to say is your affecting people who are vulnerable in the economy who have not seen raises from a stronger economy in the last few years, but the other part is most of the wage increases are modest predictable, especially the ones indexed to inflation. They are small. That contradicts counters, for instance, with the price increases businesses saw from Higher Energy prices over the last few years with the exception of the last few months and higher food prices. Businesses can easily handle those. They should be able to higher the higher minimum wage as easy as that. Well have brooks on. Hell point out people hurt the most are people that get crowded out as the minimum wage goes out and college kids make more money, and them the people who need jobs do not get jobs at that point. Thank you, christian. Little evidence to support that. All right, i know thanks. All the evidence supports you and higher minimum wage. Thats why the other side of the aisle, the entire republican world agrees with you on this. Theres no research on the other side, right . 80 of the people like higher minimum wage. Okay. Its the most popular measure. Its not been done yet on a federal level. Why is it hard to get through . Well the last one enacted in 2009. Thats politics. Think of nebraska or alaska no merit to the other sides argument whatsoever . No. Were talking minimum wage increases in 21 states. Most of them are not necessarily hot beds of liberalism. All right. All right. Thank you for the debate. Its one that continues. In the meantime a kick starter project that met its goal at the 11th hour. Keyboard waffles for breakfast. Thats when we return. Its a cool new product. Back in a moment. Welcome back. Brek fast turned inventor fount success on kickstarter bringing on the keyboard waffle iron. This raised more than 66,000. The concept is know reality. They are set to ship out in april. The keyboard waffle iron is a branch out of chris who is here right now on the set to show us how it works. What does the shirt say . Control alt delicious. This is the waffle iron . It is. Youre a graphics guy on David Lettermans late show. Yes. Thats what you do. You had this idea . Started back in college, actually a concept we had to repurpose a typewriter so i came up with the idea of the making the waffle iron put it online, it was viral, and i had people asking me to make it. Is it real . Had you made one . No, it was a concept, but the picture was out there, and people wanted it. It went on for years to the point i said okay i have to make this thing now. Its gotten to the point. Too many opportunities missed. And, you know i have to like had you been on kick starter before . I had not. I talked to people who did. Whats the cost of manufacturing this . Goal was 50,000 for a thousand units, and so i have a little bit baked in for profit, and manufacturing. Selling online, williamssonoma . I hope to but the focus is on line for now. Well see. Have you seen how many things a waffle iron can cook . Yeah. Its a novel idea. I like it. Its a computer thing, but i got something for my wife, 17 things you can do with a waffle iron. You can make eagles in there. Vegetables cookies, you can make, like all these different things. What else . Brownies hash browns. Number of things. Your deal is going to be its in the shape of a computer but i think we need to bring back the waffle iron in a big way. Are there other shapes after this . The real tech people want a number pad, extension of the keyboard, like that could be a hash brown, but sticking with the keyboard for now. Its universal that everyone interacted with no matter if youre a senior or a child, you dealt with a keyboard. They are great waffles. Whats the best waffle mix . We got to go. The blueberry mix is one ofmy favorites. Its just classic, but simple. Out of the box, though. Out of the box . I use the trader joe one. Simple. Chris, thank you. Yeah thank you. Coming up the biggest target for hackers in 2015 1 the device you carry every day. The cyber threat to cyber phones and thats next. The next hour time to roll the dice on casino stocks . A closer look at Gaming Companies in the new year. That was fun. The evolution of luxury continues. The next generation 2015 escalade. Welcome back a new article on cnbc. Com a major threat for 2015 is mobile phone hacking. More people use smart phones for tasks traditionally performed on computers, and hackers are following the money. One security expert said there were four times as many mobile attacks in 2014 than the Previous Year and you can read more about this story, and you should on cnbc. Com. When we come back if america will be the principle driver of Global Growth in 20 15 that is the question. Whats the best way to profit from it if it happens . Were going to put that question to a pam of experts at the top of the hour and plus a live report from las vegas as sin city prepares for a winter storm. Well come back to the last hour on the last day of the year. Final trading session was year with a dow on the six year winning streak. America the biggest growth driver in 2015 . Las vegas bracing for a rare snowstorm, but are casino stocks heating up . Jane wells has the best bets in the gaming sector. If you dont have a bottle of bubble lyy for the new years toast its not too late. Raising a glass with a wine expert from food and wine magazine. The final hour of squawk box of the year starts right now. Look whos here. Welcome back to squawk box here on cnbc first in business worldwide. Im joe with andrew, and becky is off today. Our guest host ed going now to sydney, australia, as the world turns, quite a soap opera. We do this every year different parts of the world that slowly ring in the new year. We are counting down here midnight est, prepareing for the ball drop. If youre a fireworks fan, set your dvr, although fireworks on tv, well it doesnt work. Tokyo rings in the new year at 10 00 a. M. Eastern, hong kong at 11 a. M. Midnight in bangkok is noon eastern. Paris celebrates at 6 00 p. M. , and london at 7 00 p. M. Kind of weird, though that right now in all those places its a different time. It definitely is the present here and its only 8 00. Its hard to get my arms around it. Well watch the fire works in central park tonight. Its a different day in other parts of the world. Its like relativity. Checking futures ahead of the final trading session of the year. Futures indicated higher up maybe 30 points 43 now on the dow jones rs and s p called up six, and nasdaq called up 10. Europe shortened trading day, and ftse closes at 10 00 a. M. Eastern time. And France Closed moments ago at 8 00 a. M. Eastern. Lets tell you about other stories. There are reports that sonar detected wreckage. This comes after bodies were discovered. They continue to battle bad weather. Also, flu season reached an epidemic level. I have a cold not the flu this morning. The cdc says the most prevalent virus mutated since this years flu vaccine was formulating meaning the vaccine was less efgsive. Chinas stock index was the best performing indegs this year but emerging markets, the best was argentina. Despite the debt default and a currency crisis. The index logged the annual gain of 59 . So not bad. Next year america is poised to be the driver of Global Growth. Its been that way for a while. Once in a while we pass off the baton, but were important always. Chinas slowing down. Ja japans in recession. Greece is a mess again. Here to handicap us on the road ahead in 2015 for your money and the global economy, the chief economist at by melon, and the Senior Vice President and senior portfolio specialist at westwood. Dick, starting with you. We have not seen you in a while, and you were stubbornly bullish the last few times that we have seen you, and i think about the economy as well and its played out along what i say you you know this was sort of the way you thought it would end up . Sure. It was my view wed transition from five years at 2 growth to three years of 3 growth. Look at what happened to the stock market, its gone up in the last 18 months, not because profits were surprisingly strong. Its gone up because people have stretched out the time horizon in the future that they expect the economy to expand and they expect that profits will expand. Even the economic bears said whoops, gee, its not going to be a double dip recession. Debts not going to crash around our ears. We have a sustained economic expansion. I think that this economic expansion is going to last for another several years, which means you can think about whats the valuation of the stock market for the against the earns of 2016 if were still in the continuing economic expansion in 2016. If you think youre going to start a recession in a month, its a different story. Thats not happening. For a long time for the last two or three years, a lot of people attributed the gains in the stock market to the wealth effect the fed generated through the reserve. I disagree with that. It didnt hurt. It didnt hurt. Do you think the fed also ser ren got lucky with oil slowing down amight have been behind the curve if we were isolated . A little bit. Its not an inflationary economy. Globally. They got lucky there. The two times we had a big plunge in oil prices without a u. S. Inflation, we got the stock market to move steadily higher for 18 months. Now, it did reach rather high valuation. There was a crack in oil prices in 198586, and in those 18 months up good. Up until 87 we had a good run. We had a crack in oil prices in 1998 and 1999 through march of 2000 was a good period. At the end of those, we had high valuations. I think that Weak Oil Price supports a continuation of economic expansion at a better than the pace we ran in the first half decade of the recovery plus an extension of Profit Growth and of the bull market. David, you had 8 next year. You want to comment on what dicks been saying . Yeah i dont disagree what were seeing is Economic Growth and Earnings Growth has been a factor in driving the market but also pe multiple expansion, particularly the last few years has been a huge factor largely a function of quantitative easing and fed policy so we are constructive on the market next year. We any well continue to see stocks go higher. We think the u. S. Economy will be the leader but as investors adjust to a change in monetary policy, youre going to see increased volatility. If you add that in with uncertainty about global Economic Growth and what Central Banks are doing outside the u. S. , that volatility will be a factor. Its not going to be a straight line. Theres going to be volatility. You have to be much more selective as investors. You cant throw money at the market. We expect cyclical sectors Like Technology and Consumer Discretionary to perform better this year. We dont expect health care in the utilities to continue to lead the market because thats more about a defensive yield play, but overall, that volatility will be a key factor Going Forward as we adjust to it to a different environment with the fed. Okay. Do you see the temperature year finally moving higher today . I think itll move somewhat higher, but i think that the ten year treasury in yield. In yield, are priced in a g 4 ten year world where theres a competition in owning bunds, which are probably going to be reduced in supply if the ecb goes to quantitative easingeing versus jgbs and guilds in the u. K. So foreign qe is drying up the supply of high grade sovereign bonds meaning you get a slow upward drift in u. S. Long rates rather than a spike. Im worried about 2018. I think by that time everything comes due. Wage inflation, fed has to tighten hard but right now i dont see the spike. Why 18 . Whats that . Why 18 . Because we have an easy fed as greenspan was easy in the mid2000s, they build up a Wage Inflation and the Oil Price Collapse of 2014 will generate supplydemand changes that give you the Oil Price Spike of 2018. Were going to slowly cut back the investment in oil and productive the price comes raging back . Not raging back in a month or six months, but you go down three or four years later, youll get that spike. Thats kind of what weve seen over history. When you way over do it on the downside in oil prices give it a couple years, you way over do it on the upside. Keep in mind recessions are triggered by Oil Price Spikes. People talk about lehman brothers. We had oil at 145 july 4th Independence Day of 2008. The big recession, almost always come from the big spike in oil prices. Im not worried about 2015. Im not worried about 2016. Not too much about 2017. I think the bill comes due in 2018. Thats too far in the future to worry about now. Dick also maybe we are in a low inflation environment. Inflation is not a natural thing. It feels that way for open of our age living through the 7 0s and 80s, but its about the same as it was earlier. With the shift in demographics, more older people, people are price sensitive, they do not pay higher prices, and the deflation seen in places like japan and europe are what the world is going to be like. Low inflation is the new normal. My view is that the Financial Regulation of the banks has been so restrictive that its going to pool up access liquidity thats not flowed into the economy because of that contraction their regulation. As you move a couple years out, and they are not going for new rounds of financial restriction on the Banking System i think some of that access liquidity timely gets mobilized, and the velocity comes up. Not happening fast but i expect an upside inflation surprise around late 2017, 2018. This is a cyclical economy. Every time inflation is low, they say its low forever. Every time inflations high people say its high forever. Same with oil. If its high they say, wow, we have peak oil. Well we ended up with was Peak Oil Demand opposed to peak oil on supply. Supply and demand. David, the bull market is in tact and were in a, what mid inning of a baseball game . Usually you get a period of over valuation and sort of speculation. Are we near that yet . No i dont think so. Look at flows into equity funds. Were not seeing that. Youre seeing flows going into bond funds. Youre not seeing access bullishness. Youre not seeing the other signs that are indicative of a market top. That would include valuations and oil prices and include Interest Rates and yield spreads. None of those are indicative of the market top and i agree that the economy is in the mid phase of its growth cycle, and we should have several more years to go and as long as the u. S. Continues to be the leader globally, youll see a strong dollar. That benefits consumers here in the u. S. Consumers are in a great spot today. They continue to spend. That augments Economic Growth here positive for the stock market. What inning . Fifth . Fifth, going with you on that one, joe, yeah. Do you think dallas the cowboys are going to win the super bowl too . Oh, wow. You know what . If they win this sunday they have to go to green bay. Thats a tough road to hoe ubut its nice to the in the playoffs. Patriots. Patriots . You getting a new suit by 2018 . No, i brought this to make you happy, joe. Hes like the guy in australia. I noticed. No one noticed in australia. I understand that. Its a beautiful suit. If it matches. If he gets something, he goes with it. It matches the hair. When the hair turns black or brown, then ill change the suit. He counts on me to mention that. Thanks, david, thank you dick, thank you. Thank you. Up next when we return 2015 the year to roll the dice on casino stocks or is it the beginning of a downturn in gambling in america . Our own jane blackjack wells, spins the prediction ball after the break. We hit the tape at 10 00 eastern, and disney and getting you ready for your new years eve toast. All that and more when we return. Zblmplts welcome back futures above 50. They were listening to dick and ed david, and the s p up 665, and the nasdaq up 11. We may close out the year as most of the year went with a gain you figure whats your s p . I think we might get a 10 to 15 gain. This year i thought wed get 15. Better than i thought. All right. Different cook probably andrew. Right. Scientists from berlins robert Coke Institute believe they found the source of the worlds biggest Ebola Outbreak they traced to to a 2yearold boy who died in a village. They believe the boy was infected by an insect eating bats that inhabited a hollow tree near the boys home. Thats app interesting piece of the puzzle. Detective work. Well take a hard turn here. As 2014 draws to a close, we look at ways how to make money in the coming year. This hour its gaming. Heres jane wells. Predicting the future of gaming is risky. So much is changing. As we gamble on 2015 heres three predictions. First, high rolling chinese gamblers have been holding their financial cards close to the vest as the Chinese Government curbs vip junkets, theres smoking restrictions and want economy loses steam. 20 15 aint going to be better. However, japan may green light casinos. Second dont bet on gaming in vegas as sin city recovers its evolving because americans visit and spend less on gambling and more on parties and events. In 2015 they host the massive rock and rio festival and they are trying to lure a Pro Sports Team with one new stadium project. Third, a better hand back east. Deutsche bank sees the bipeginning of a turn around due in part to lower gas prices. The first of three new big operations will open in massachusetts next spring bringing in new competition and watch closely for the impact of that. Okay. We are joined now with more on gaming in the new year. Jane you department mention Atlantic City. What do you think is happening there, and what that represents about gaming in this country . Well, it is sort of the big question mark going in. They are going to have a huge summit next month on what to do about Atlantic City. Four of the 12 casinos, of course, closed in 2014 helping the remaining eight, but as caesars says we want to make money there. Theres other issues. The Online Gambling situation in new jersey has not brought in nearly as much money as they thought. Will the state allow poker stars to join and kind of rejuvenate that market . Then there is a move in northern new jersey to allow for more casinos in other parts of the states which could hurt Atlantic City because all the online new casinos, and things happening up in massachusetts, new york it adds more competition while the city is just trying to recover. Fox woods and intractable situation down there, jane. You look at it board walk ocean, right near new york city. You can think of all the reasons, like wow, long Atlantic City, but it does not work that way. Its a chicken egg thing. You have to fix the city before people want to go there for gambling and you were going to fix the city from the gambleing revenues. You know what i mean . They are discussing potential aid packages and taxes. Im not sure. You know, you tell me. You guys live over there. Would you rather, hey, go to Atlantic City or go up to boston when the new property opens and check that out you know . It was nice in Atlantic City ill go to the ocean, luxury hotels, all that stuff, but its not like that. Yet. I dont know. I dont know what the prospects are. And with all the competition, pennsylvania and everywhere else, you know i dont know. If you had to go long or short on Atlantic City, what do you do know . Bet on black or red . I dont know. Four casinos close down in one year you know and they had some new ones you know, they got some buzz. Right . Jane, whats the margin issue when it comes to all the places yo you say theres less gaming going on, but making more money on all the other things but the margin it less on other things, right . Yes you are correct. But that is the way its going. Heres whats interesting in las vegas right now. Nevada, as a whole in november timely snapped three months of lower gaming revenues. The strip, though still down. The strip is still taking in less money month over month in gaming revenues. Overall, revenues are improving because people spend on hotels. Youre right on the margin. An interesting thing on the new numbers pointed out from the strip. The numbers down only 1 , which they see as a good sign meaning the problems are not transferring to vegas as much as one expects. There was one surprise. Slot numbers finally turned positive. That was the real weak link in gaming revenues. I dont know why that happened. Maybe because of easing comparisons, but slots finally turned positive in vegas, but, yeah people are not going there to game as much. They are, you know thats why they want stadiums in. They are going to try to get a team. You know . Nice restaurants. That kind of stuff. Well its fun. In the olden days, we reported on a casinos result and they missed numbers because one guy, one guy, like a whale the whale. From asia comes in and takes us for 18 million. It was fun. There was an extord their item one guy got on a roll. Theres a movie coming out, a remake of the great movie with who was in it last time . James maybe last time but, oh awful. This time its mark wahlberg. Oh theyeah, looks fantastic. Dont bring a credit card when you go. No, no. I dont gamble. I cover the pot industry. I dont use that. I no. I do have you know why i like going to vegas . This is the truth, fitting into what i say, it has some of the best restaurants in the world. There is so much great food in las vegas. Fat and broke. Bad combination, jane. Story of my life. Coming up jobless claims out a day early because of the holiday. Closely watched data at 8 30 a. M. Eastern, and disneys banner year. The author of fortunes cover story will join us. Talking about las vegas, a rare winter storm. A live report later this hour. First, it might be the worst buzzer beater that youll see all year. Well show you that next. 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. Look at the rate of return weve made on some of our recent options trades versus what we would have made had we just bought the stock. Theres no comparison. To make the best returns in todays market, you have to learn how to trade options. And our book will show you how to do it for free. Jon has been Trading Options for more than 30 years. Pete is one of the top 100 traders in the country. And our book will teach you how to trade options for free. So call now. [ male announcer ] call the number on your screen now for your free copy of jon and petes new book. Thats. see the number on your screen call now. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. This might be the worst buzzer beater all season. The university of florida taking on rival, florida state, in College Hoops last night. Tied at 63. Three seconds left. Florida state inbounds the ball gets off a long shot. That was short of the basket but the gators accidently tips the ball into his own basket for the game winner ouch. Florida state wins. See this oh perfect tip off the glass, and they lost florida did, and 16563. I doubt if thatll be the last one, especially with the 64 teams starting not far off. Playoff in College Football this year. Exciting, the four teams there. I know. Good teams in the nfl too. Although, the eagles does not seem fair. Carolina, the eagles. Cold but a great time of year to be a sports fan. Best time of the year. Coming up when you return the closely watched jobless claims minutes away. Bringing you the numbers and instandpointin instant reaction, plus live from vegas with a rare winter storm. We return in just a moment. Whys that . Look what daddys got. Ahhhhhhhhhh growth you can count on from the bank where no branches equals great rates. Mmm, progressive insurance here. Ever since we launched snapshot, my life has been positively craycray. Whats snapshot, you ask . Only a revolutionary tool that can save you bigtime. Just plug it in, and the better you drive the more cash youll stash. Switching to progressive can already save ye 500. Snapshot could save ye even more. Meat maiden bringeth to me thine spiciest wings of buffalo. 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. Seconds away from the big number today, weekly jobless claims, jim is standing by with the numbers, jim, please. Good morning, joe, happy new year. Numbers are 298. We expected 290. Last week reviced from 280 to 2le 1. Continuing claims come out at 2353, better than expected. Thats good. Its been up and down the last couple week so that should placate a couple people. Numbers are increasingly important Going Forward because were trying to see if job destruction in the Energy Sector bleeds in the picture. Its too early for that. This is an okay number. Just a little disappointing. The stocks ignored it. They were up three coming in, are as well, and the ten yearyearold is 10. 18 where it was before. The bigger story today is crude. If it accelerates down that causes nervousness. Joe . We get nervous when it goes down. Well take it for what its worth, jim . Its just how fast it goes down. Right. If it cascades lower, nervousness happens. If it finds a plateau, then the market starts to relax. Keep in mind the last two days it was breaking on a consolidation pattern, picked up steam, and it has not. I still think its going lower, but im not as sure of that as i was two days ago. Its strange people that dont follow commodities, that it could pick up speed going down at 52. Its just you know its hard to believe something we were so sure was worth 90 a barrel almost set in stone that its worth that much, and it cant hold 52. Thats just very hard. It absolutely true. Because theres, you know, theres certainly a value to crude, and just remember this is something thats cartel controlled for 40 years, and they release control and let the market find the price. Im not saying that 50 and 40 is the price. Im saying once we start to wash out everybody long for years, you know we might explore prices on the down side we should never be at. Right. Thats the point where you buy, but its not found the bottom yet. It goes 47 48. Thats the point we tried to make in the show and there was a cartel for 40 years. When you control prices and you set it and you let supply and demand do what its going to do sooner or later, all the things build up this is what happens. Its a the cartel back might be broken. Well see in 20156789 thats a big story to watch in 2015. They are worried too. Great point, joe. One of the reasons they do it is to gain market share again, watch people like russia, iran, us, out of the picture now. Might be finished. Could be, i hope you are right about that. Fracking did it here not new york, but in the rest of the country. No doubt about it. No doubt about it. All right thanks jim. Youre not going to be the they have not approached you for the chicago job . They have i showed them the resume, they are sbreged, dont let it out its on the down low. I wont. Jets are looking for someone too. All right. Lets get back to the guest host for his sentiments on what the Market Action this year means for next year. Ed, just continue along this oil thing. It is unbelievable to watch. Accelerating downside, 52. How does that happen . Well incremental costs for a lot of facilities is 60 or so so i suspect tm itll bottom at some point, but its a huge benefit to the u. S. Economy to have lower oil prices. There is a negative on s p earnings. We talked about that. How does it happen . We think of things that have inherent value. It is supply and demand. There was a tremendous increase in supply coming in the United States, and essentially, the demand growth slowed down quite a bit both because of china and because Greater Energy efficiency in the u. S. And europe, and elsewhere. So slower demand growth and then a big increase in supply plus a lot of people scrambling who really needed the revenue from oil. You dont think that theres something ahead demandwise that we should be concerned with and that oil knows about it and we dont . You dont think i dont think so. I think, real its a supply story more than a demand story. Demand is not going down but it flattened out, and that combined with increasing supply. The interesting thing we talked about is actually in the bond market. The same supply and demand story i think is under appreciated. That is you have tremendous demand for fixed income product coming out of foreign investors, coming out of retirees and pension plans. The supply of new bonds has gone down or the increase in supply has gone down as a result of falling deficits starting in europe and so forth. A lot of the things we think about that seem mysterious or due to the fed or another thing comes down to the end of the day at supply and demand. Is there a Tipping Point in terms of the price of oil at which point you say, you know what . What was once great is now a real drag. Well, of course, it depends who row are. If youre an oil company in a Oil Producing states lower prices are bad for you. The United States. Is there ever a moment in the United States in which you look at the price and go we have a problem. I think the answer to that is no. Now, unless the price is down because we have another recession or Something Like that. Lower oil prices is a thing in itself, just isolated a very important positive stimulus for the overall u. S. Economy. Do you have have you factored in gop senate . Do you care about what happens in washington . Were going to hear app interesting state of the union, and weve seen some foreshadowing of what its going to say, and, you know, success has what is it . Success has a million fathers and failure is an orphan . Something like that. Whatever it is. People will take credit for the unemployment number for employment picture is better 5 gdp, no inflation. We are hearing this but the other side can say gridlock is great. I mean, what did it . It was not anything those guys did proactively. They didnt do anything. They didnt bring a bill to the senate. Is gridlock good . Yes or no . I dont think its bad one way or the other all that much. What happened in the country, you had the professor on the other day, we had a financial crisis, took us several years of slogging through and now that process is over. Its a natural part of economic activity. Makes us feel like we have nothing to do with anything then. Its not washington. Its not business. Its nothing. It takes time to come back from the financial crisis. Its the logic of the economy. Its the driven by the private sector, and washington does not matter. Back in the old days on the south side i did a study of did it matter whether republicans or democrats had the white house or the congress . If you control the variables like inflation, Interest Rates, the answer is its not statistically significant. Does not mean policy does not matter. We just debated the minimum wage. Youre an obamacare guy. I dont know what you are. You tell the private sector but fine with the government stuff. No im not fine with all the government stuff. I would. Im a capitalist to the core. I work on wall street but at the same time, i think that there is a role for policy to make the country a better place. I hope maybe with less gridlock is there a possibility that they make it a worse place with too much policy . Always possible. Face it at least you can concede that. Weve done things in the past that set us back decades. It could happen again if we dont get the retirement situation in order. Listen you always have to consider what policy does if it has a negative effect on free functioning market, thats a bad thing. Acknowledge most of the prosper piity is from the private sector . Absolutely. All of it. Okay good. Im a balanced guy. Right between you two. Physically and philosophically. I dont know about that. Coming up strong year for disney. Up next talking to the author of the fortune cover story, the companys media moves, and a big bet on china when squawk box returns. A south corey ya activist plans to launch balloons with copies of the interview into north korea. Youre right, andrew. Put an eye out. You can hurt someone if you drop one. Weather permits, plans to begin the air drop in late january. A flaw that we said, only a small number of north korea can play the movie, and they would say, what is this . Use it as a frisbee. What do you think of a usb if you didnt know what it was . I dont know. It would be tough. Theres a cover story on bob and the empire of tech the companys stock skyrocketed this year up 24 . With more on this story and other matters that we are watching in the new year is the writer of the piece. Senior writer at fortune. Goods morning, glad to be here. Three questions whats going on at disney. Obviously, the stock on a huge run. They had a huge run. The question mark over the company is, can it continue . Can it continue . I think so. At least for the foreseeable future. Its a diversified country. Theres espn abc, the parks and resorts it runs animation, and theyve got a lot coming up in the pipeline too. I mean, espn amazing, such brand loyalty. It is thee reason a lot of people still subscribe to kalecable. Unbundling is the trend, espn is safe when it comes to that for the future. They got a park opening up in china for the first time. The Shanghai Disney land park. You know the animation side theres new pixar movies coming out. Theres a stars wars film in 2015. Theres a lot in the pipeline. I think all of those things are going to continue generating a lot of money for them. When we look back at the purchase of lucas films, do we think he spent the right amount of money . Too little . Too much . Overpay . I dont any so. Well know soon probably, well see if the new film is a flop. I dont expect it to be, but you have to keep in mind that bob, the ceo of disney did not just buy the Star Wars Franchise here, which is huge in and of itself, but bought a company that has this pretty large special effects. They do special effects for a huge range of movies not just star wars. Again, he brought in technical talent and new creativity. Thats always been huge at disney. Looking into the crystal ball what hes been doing is being on an acquisition tear. Look into 2015, what are the other pieces of the puzzle that you imagine he may need or want . So i think that a few things new medias definitely a focus. Theyve already bought maker studios, just recently for 500 million. Well see those acquisitions and thats a youtube channel, basically. I think well see more and more of that. You know there were rumors that disney was in talks to buy buzz feed. That did not materialize. I dont know if that would have made sense for them even but well see new media acquisitions. You know, not just from disney, but from other Media Companies as well. And as a result of the disneys success, what do you think news corp. Has to do . Well, news well, so they are making a lot of acquisitions itself and i think that well see a lot more of those. They will mostly smaller. You know, both companies havent had the easiest time successfully buying and integrating, for example gaming, social networking. I mean, we all know about the myspace flop, of course but they still struggle a bit. You know, on one hand, they need to acquire because its hard for them to build stuff from within but on the other hand, they dont always make the right bets. This is not their bread and butter, so i think they need to keep making bets. They need to make bigger bets in this area. Right. This piece is framed up around the idea disney is a tech company. Steve jobs was on the board. Whats he learned from them . Hes learned a lot. Bob not only surrounds himself with people steeped in technology, but uses them as advisers. The best example of that is the relationship with the late steve jobs. As soon as he became ceo in 2005, he reached out to steve jobs. At the time, things were ugly between ons and former ceo, michael isner. Pixar was falling apart, so igar, first day on the job literally reaches out to steve jobs making that a priority to fix the relationship with pixar later fire them later, just the very next year, but spiked up a partnership with apple and with jobs, and these two would advise each other. Abc, owned by disney of course they were the first to put tv content on itunes just as an example. You know, they were early pioneers in developing for ipad. They have a mickey mouse brand, apple smart watch coming out next year. After jobs death, its continued to be a tight relationship and partnership with the company. Were going to leave the conversation there. Thank you. Congratulations on the piece. Thank you so much. Thanks. Like a mickey mouse watch a bad a mickey mouse you know, its cool. Thats yeah right. Oh, that well thats a mickey mouse you know . She didnt mean it that way. This is actually a watch. Las vegas braces for a rare snowstorm. A live update from mike seidel and white castle is moving away from the core business. You wont believe what the fast food chain is offering. Whats happening . No more burgers . This is why we do these. People stay tuned. Andrew, stay tuned. Welcome back to squawk box. White castle looking to add to its healthy menu options. The burger chain introducing veggie sliders. They will sell for 99 cents each with a limited time only depending on the customers choice of sauce, calories will range from 150 to 270. By contrast, the beef sliders range from 140 to 220. The healthy veggie burgers have more calories than the sliders. Such is life. The electric powered cars are dirtier than the gasoline. Just like everything. Some people are vegetarian. This makes you a lot did you hear that joke . A vegan, a guy who cross trains and what was the third one . They all walk into a bar. I forget what the third one was. You know how i know what they were . Because they all told people within two minutes. Vegans, why do they tell me theyre vegans all the time . Because they cant eat the other food. Im a big fan of vegetables but veggie burgers, not so much. I dont want to get too politically incorrect. But it was a vegan, a cross trainer, and an atheist. Also, someone who has a rescue dog. Oh, its a rescue. Anyway, las vegas bracing for a rare snowstorm. Mike seidel joins us from sin city with more. Hey, mike. Reporter hey good morning. Were waiting for maybe the first few flakes in four years. Right now its cold and windy. Its 34. The windchill is 25 out here on the strip. Keep in mind its almost 6 00 a. M. Here in vegas. Still a few people Walking Around the streets but a lot of them have headed indoors. Because it has been cold you dont get the foot traffic you have in the heat of the summertime. The last time they had an inch of snow here on the strip was almost six years ago. Theyve only had an inch of snow or more four times in 35 years. This is fairly rare. Its going to stay cold right on through today, into new years day. In fact, midnight tonight here on the strip, look for temperatures in the mid30s. Again, maybe a few flakes of snow this morning. But certainly that will be it. Then it just stays cold. By the weekend, andrew and joe, it will get back up to about 60 by sunday. Average high now is 56. So from the desert we shiver. That beats wrapping around a pole in a hurricane or a blizzard or something. Youre doing okay out there, mike. Thank you. Appreciate it. Coming up if you havent picked up some bubbly to ring in the new year its not too late. Were going to talk to executive editor from food and wine magazine. Some of the top choices for your midnight toast when we come back. New years eve is a big day for the sparkling wine industry. More than 20 of annual sales of bubbly take place in the last three weeks of the year for holiday celebrations. A look at the sparkling wine market including a rising popularity, food and Wine Executive editor is here. Thats why you cant speak because youre just a magazine guy. Im just a magazine guy. Can you help us with i mean, do you know, andrew what champagne and what it has to come from . Can it be good sparkling wine if its not it can absolutely be good sparkling wine. It cant be champagne. It really sounds like semantics almost. Its that question. With european wines, they tend to think of everything identified as geographically. Its legally legislated that way in the eu. Its not in the u. S. But why is per second koe taking over . Its affordable. Its fantastic for the price. Like this franco we have in front of us. Its become incredibly popular. Its up 37 the past year. Lets try the prosecco, shall we . We dont need to toast. You dont get necessarily the kind of refinement you would get with an expensive champagne. For 15 a bottle and holiday entertaining, its a great deal. Prosecco has become so popular. Do you think the quality has suffered . Whats happening, probably the quality is suffering in that theres been a giant proliferation of brands. So if you go into a store now what is the premium, premium prosecco . Is there a dom . There are a few proseccos that are at the lower end of the champagne pricing, like 30 a bottle. Thats really the highest end you get. Its a slightly different production method. Much less time consumeing. Sort of a different market. What was that dessert wine you give out for christmas . Really good. Its a great sparkling dessert wine. You just are like he knew it. You should get a job where this is the thing you do. Talking about wine or something. So the dom, you still have to spring for like 200. The dom rose we have. We got to do a toast. My kids grew up in this studio. Come on over. Were going to they wanted to come in today. Theyre sad and nostalgic. We are moving next wednesday to new york city. Were going to toast to 2015. The 20th anniversary of squawk box coming up. And a great new year. For everyone. And to our viewers. To our wonderful viewers. Becky, whos unfortunately not with us. Were looking forward to a fantastic new year. Thank you, everybody. Cheers. Cheers. Drink up. Youre not allowed to drink up over there. You can smell it. Okay. Join us next year of course. Squawk on the street begins right now. Happy new year to the guys on squawk and to you. Good wednesday morning. Welcome to squawk on the street. Im carl quintanilla. David and jim are off today. We close out the month of december, the fourth quarter, and 2014 today. Barring a crazy session, the s p will post about a 12. 5 gain after the worst decline in two weeks yesterday