Good morning. Welcome to squawk on the street. Hope you all had a good christmas. Im melissa lee. Were live from the new york stock exchange. Jim cramer has the day off. The latest s p schiller home price report has been released. The results being shown at the bottom of your screen. David blitzer will join us with a closer look at the numbers in just a few minutes. Lets get a check on how were setting up on this day after Christmas Trading session. The dow looking higher by about 15 points. S p looking at about two points at the open. European markets closed on this day after christmas. The uk and france among those celebrating foxing day. We start off with, what else, retail. Dips in spending in the midatlantic and northeast regions. Luxury sales also weak. Were coming off the worst Christmas Eve for the dow since 2006. As the president cuts short his hawaiian vacation to deal with the fiscal cliff, just five days to go until we go over. Threatening both coasts with workers snubbing up best and final contract offer. And more on the home front. Well have more on the data and whether it can keep one of the best performing sectors of 2012, Home Builders going in 2013. Data showing what some experts say is the slowest growth in spending since the 2008 recession. According to mastercard, spending polls units through Christmas Eve, retail sales rose just. 7 from the year before. The National Retail federation says it is forecasting a 4 jump in sales. Well continue to get trickles of data as we progress through this last week. It is still an important week, the final week before the new year in terms of retail sales for these guys. Historically positive the last five days of the year and blends into the first couple of days of the new year. Generally get a nice yearend effect. Well get claims tomorrow. New home sales tomorrow. Chicago pmi on friday. But this idea that retail is soft, was it the fiscal cliff . Was it sandy . Was it some sentiment that came out of the newtown tragedy . Its hard to say. But it may be a combination of all of those. We got a sense from the guests we brought on earlier this week, on monday, that it was not a Great Holiday selling season, as we ended the last day before christmas. And all those may be the reasons, carl. Im positive i didnt think people really understood the fiscal cliff. I may have been wrong. Perhaps it was something that weighed on peoples minds. The weather always at issue. It could actually have been warmer weather as well that contributed. Weve had some analysts say that because people dont feel they have to go out and buy a coat. Because it will never get cold again. Except today, when its 28 degrees. Well see how after christmas does. Internet also, it doesnt appear as online sales are up as p as anticipated. And perhaps they made up for the loss of the brick and mortar. You were pointing out before the show, luxury was not immune to this. You would think it would be more in tune to the consequences a cliff. You can take a look at the midatlantic and northeast regions, those regions account for 24 of National Retail sales. Within luxury, a big portion of that 20 is in the heast region. And so when you have that sort of double whammy, sandy, newtown shootings, fiscal cliff, all these things can combine to depress shoppers appetite to spend at this point. Well talk a lot more over the next couple of hours where the discounts really came. Theres a lot of talk about walmart and gap, and macys and target. And then what thats going to meet as they try to clear out all this inventory, really starting today, going into the first part of the new year. Those things have to get off the shelves. And thats going to affect margins one way or the other. Lets bring in jackie deangelo, crunching the numbers back at headquarters. Im going to recap what you said a little bit earlier. According to mastercards spending poll, the few weeks leading up to Christmas Rose only. 7 . A pretty big miss there. To give you perspective, after a drop of 5. 5 in 2008, holiday sales have seen a steady rebound since then, including a 2 increase last year. This less than 1 figure, bound to be disappointing. Online shopping also showed some muted results. Spending polls show web sales were up 8. 4 from last year, but that number doesnt stack up to the double digit growth weve seen in that segment over the last few years. Whats to blame for the dismal holiday sales . Hurricane sandy was definitely one factor. Experts say shoppers in the northeast probably bought less and used their money for storm repairs, then, of course, theres the uncertainty created by the fiscal cliff. They took the psychological factor into the mix. You know, at first it didnt look like it did. But consumers respond two weeks before a deadline happens. Its like they didnt get caught up in it during the thanksgiving rush, they got caught up in it at the very end, when it hurt most. Nothing like a pending tax hike to take the wind out of your Holiday Shopping sails. Dont forget, weve got a few days after christmas here where these are still in play. Consumers are going to use those gift cards when they head out to make returns. Of course, remember, those revenues are booked when the gift cards are redeemed, not when they were purchased. And theres a chance youre out returning things, that maybe youll spend a little bit more. Well watch the next few days closely as well. Guys, back over to you. Jackie, Early Morning already. Thanks for sticking around. So who were the retail winners and losers this Holiday Season . Rick beamer is the founder of the America Research group, a leading Consumer Behavior and marketing firm. Good morning. Good morning. Thank you very much for having me. Merry christmas. Same to you. Were tossing around all these theories. This is a significant mist here. Whats to blame . Let me cover your point that you just mentioned. Number one, only 8. 5 consumers said that the fiscal cliff impacted their sales negatively. Only 45 of consumers are even following it. Now, sandy was another issue. 16 of consumers in the northeast said that sandy impacted them. So that is a significant fark tor. The other issue is, luxury was impacted because this year Corporate America held fewer Christmas Parties than in the past, because they didnt want to be able to broadcast their largess and all their activities. Keep in mind, 40 of retailers driven by the corporate Christmas Parties, when they were cut back, it affected the shoppers who were buying the holiday dresses and jewelry. So is this i mean, if youre looking for the true source of pain here, brit, in the trade, is it discounters . Is it luxury . Where are we going to notice this miss the most . Well, what happened this year is, before the season started, 74 of consumers said they were redig to avoid their credit cards as much as possible. So when you look at the winners this christmas, you look at walmart, you look at sams, you look at big lots, you look at amazon, and look at the people that really did well this christmas, you know, and dollar tree, think about that. Youve got a Discount Store, warehouse club, dollar store, and amazon, those are the five big winners. They kept over 75 of their customers at home. On the other hand, those retailers that lost, which were the Barnes Nobles, and bjs, costco, the gap, retailers like that, and lowes, those retailers did not do a good job. Keep in mind, someone like costco, which is now expanding their Business Model into the Business Community and small businesses, they can give up some consumer business and do very well. But look at the troubles that Barnes Nobles and bjs has, they lost over half their customers. Im a consumer at home, its the day after christmas and im thinking, are there going to be great deals. Because of the weak data weve seen so far through Christmas Eve, can we then extrapolate that the stores are now going to be more pressed to mark down items in order to move them into the new year . I wish i could say that. When i looked at the ads in the sunday newspaper where i live here in orlando, there was nobody cutting prices dramatically. Heres the problem, retailers at this level are publicly held. Theyre much more concerned about wall street than main street, more concerned about their earnings than sales. What happens is, nobody really changes their advertising plan. So what theyre doing is following this and theyre going to adjust in january. If sales are not good in december, theyve still got january clearance to wipe the slate clean. Heres one of the issues. Theyve got to be able to keep those stores empty, so when president s weekend comes, when they put the spring merchandise out there, because they want to have their spring merchandise on display. Thats not far off. Rude awakening this morning. Appreciate your time very much. Thanks. Thank you so much. Merry christmas. Same to you. On to the fiscal cliff this morning. The president cutting his vacation short in hawaii. The president plans to leave for washington tonight. Congress expected to return on thursday. President , guys, not expected to actually arrive in washington until tomorrow morning. No talks scheduled that we know of as of yet. All the attentions going to turn to the senate, which tends to be more of a compromising body than the house is. Yes. And the president is available in person if you should want to go over there and visit with him. Or perhaps if he wants to visit with anybody else. The consensus seems to be if you get some sort of a deal, its obviously not going to be the big deal. It will simply be something that extends the tax cuts for the vast majority of americans, at least those earning less than 250,000 a year. The consensus seems to be, carl, that if we dont get a deal by the second or third or fourth week, the super bowl week, well start to feel it in the economy. We had a notable selloff. There is typically a bias on Christmas Eve, but the worst Christmas Eve performance for the dow since 2006 because of the jitters about the fiscal cliff. It will be an interesting few days as Congress Starts to reconvene. And also as Corporate America is taking up this fight as well. Ceo Howard Schulze of starbucks urging workers at 120 Washington Area stores to start writing on their coffee cups, come together. Are you serious . Yes. Yes. That should help. I think thats going to do it. Problem solved. Between that, and the pins. I never thought of that. Can you imagine oh, good idea, Howard Schulze. But he says we deserve better. We probably do. Hes right. A lot of them are still on vacation. House members have been told theres nothing scheduled for this week. But you could be called back with 48 hours notice. So, in a perfect world, things could possibly come together. 48 hours notice and we have five days to go. Im not saying were not cutting it awfully close, but thats where things stand as of right now. New new housing data out tod home prices rose 4. 3 in the 12 months ending in october in a 20city composite, beating analysts forecasts. It did appear as 12 of the 20 cities in both composites posted monthly declines in october. David blitzer will join us in just a few minutes to go over this data. Bottom line here, better than expected. Maybe this is enough to keep this sector going. A very strong sector in Consumer Discretionary overall. Home builders have really been a double in 2012. It wasnt until the second half of this word that you started hearing the words housing and gdp growth in the same sentence. Perhaps the most significant part of the economy for so much of the early parts of the 2000s. Well see. They do call it a sustained recovery. That is, s pcase schiller, and the recovery continues to gather strength. The best performing sector, though, financials. Financials, yeah. 26 on financials. Utilities the only one lower for the year. Nine out of ten s p sectors higher. That doesnt happen a whole lot. No. When we come back, Christmas Day may be over, but weve still got blitzer. S ps David Blitzer breaks down the winners and losers. Also, facebooks rally sign of things to come . Stick around for predictions. Kind of choppy today, as the markets watching for any sign of progress as the president comes back to washington. A lot more squawk on the street in just a moment. Lets get back to the key housing data out this morning. Home prices rose 4. 3 , after the 12 months that ended in october. That was ahead of what analysts had been forecasting. Here first on cnbc is David Blitzer, chairman of the s p 500 index committee. David, you talk about a sustained recovery in housing, of course. Monthtomonth, september to october dont look as impressive as year over year. I think recovery is sustaining itself in the third quarter. Housing added the gdp. Every reason to believe that will continue in the Fourth Quarter, and into next year. As you point out, the monthtomonth figures look a bit weaker, strictly because of the seasonal housing patterns. Winter tends to be a slow period. The seasonably adjusted numbers from september and october, october was actually a good deal better than september. A lot of the markets that saw the biggest busts are now seeing, i dont want to call it a boom, but certainly significant price increases, arent they . Without a doubt. Phoenix has got 13 consecutive months of rising prices. Its up over 20 over the last 12 months. Las vegas, i think, was up about 2. 8 this month. So there is a lot of strength in some of the previously horrendously weak spots. Southern california is another area that had been hard hit. It definitely rebounded. At the same time, david, some of the cities that had, you know, fair to best during the downturn are now showing some weakness, chicago and new york, the only two cities with negative returns in the month of october. Whats going on in those two markets . Well, i think the first thing to recognize is what you pointed out. They didnt have the incredible boom going on. So theyve been a lot more classic. Those are markets where i think there are some other concerns related to local economic base. New york is highly dependent on financial services. And financial services, despite the stock market, have not been doing as well as they might. And have seen a lot of slowness. And rumors of layoffs. So there are areas that are a bit weak. Even with those, i think on a National Basis housing continues to be very solid. Would you anticipate, david, seeing any sort of impact in sort of a higher income areas, in states, california, the northeast, because of the fiscal cliff . Do you think thats going to show up eventually in the data . Actually, i think the bigger thing thats likely to show up, especially in the new york metro area, is really a question of what seasonal bonuses look like. Traditional issue for new york city area has always been how good the bonuses are, if theyre real good people go out and buy slightly bigger houses than they had expected to previously. I think thats a bigger item than the fiscal cliff. The longterm question about taxes is clearly the mortgage deduction. Given they havent even got to the headline items for the fiscal cliff, they wont get to the mortgage deduction for a few weeks, if not longer. Finally, david, shadow inventory. We hear a lot about it, talk a lot about it. It doesnt seem to be the concern some anticipated, at least when we go back to 2012, 2011 to current. To some extent on a National Basis, i think the shadow inventory story is a little bit overdone. I think its gradually being worked off. Foreclosures have been or the number of homes in foreclosure have been declining in the last several months and i think are likely to continue to decline. Localized areas it can be a big problem, but nationally, i think its a little bit overdone and a bit overstated. David, were going to leave it there. David blitzer, s ps managing director of the s p 500 index committee. Thank you. Who will be celebrating the day after christmas . The bulls or the bears . The traders take ahead of the opening bell. A port strike is looming. Well ask Retail Federation matthew shay about the billions of dollars that could be at stake. Plus, what he thinks of the Holiday Retail numbers. Lets look at the futures as we head to the opening. 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