Transcripts For CNBC Squawk On The Street 20150102

March of 2011. We start off much like europe with weaker than expected pmis. Will that paint the first big data picture and supply information for the rest of the year . Im not sure. We just breached that big settlement from october 15th at 2. 14. The 10 year at 2. 13 bund getting closer to 40 basis point handle. Unbelievable the money into bonds. Lets bring in david rosenberg. Anything to worry about there with the miss in manufacturing . Its still a pretty strong number. Well its a diffusion index. 55. 5 is telling you net on net Manufacturing Activity despite all the problems globally in the u. S. Is still expanding. Its just expanding at a more moderate rate than it has been over the course of the past few months. Its still positive for manufacturing. Just less so. To me it still consistent with an economy id say chugging along roughly 3 trend rate of growth right now. Which is good. Its been a 2 economy since the financial crisis. Well take that 3 . We are starting off the new year with a very strong dollar much like last year. Dollar index at nineyear highs. How does that reshape the investment landscape, the economic landscape for 2015 . Right. I think that the ism told you that the impact of the strong dollar is probably going into industrial activity. Dollar strength reflective we have Strong Demand domestic issues in the u. S. Dollar is a price and relative price. Its telling you things domestically in the u. S. Are better than in most other parts of the world. You are going to find a lot of large cap exporters in the industrials, technology. You are going to find companies and sectors with high sensitive to the foreign economy. The sensitive to the translation effects of the firm u. S. Dollar will have earnings estimates come down over the course the next several quarters. Be wary of those sectors. What does a strong dollar do . It helps bring down import costs. Its beneficial for the consumer and very beneficial for the retailer. Consumer discretionary, areas of the economy that cater to the consumer because the consumer comes out with much greater purchasing power on a global basis. This is positive for the Consumer Base at the expense of large cap exporters. Question on the u. S. Equity market. Since we are starting off 2015 weve come off this great year third year in a row of double digit gains. We are getting valuations that are above historical averages. Do you think the market is fairly priced begin whats going on fundamentally in the economy and with earnings or is there a disconnect . I wouldnt say there is a disconnect. The u. S. Market certainly you could argue is moderately expensive depending on the valuation metric you want to employ, whether you want to take a look at it over the past 10 20 years. What is happening, the u. S. Economy and the u. S. Markets are getting rerated because of the fact the economy domestically is operating at a far higher level than the rest of the world. Youll find a positive correlation between where the dollar is going and where the multiple is going. I wouldnt bank on any further multiple expansion. It could happen. The markets as you indicated on the expensive side of the range for the cycle, but i think this is going to be more of an earnings driven year this year. Like it was most of last year. We had moderate expansion in the multiple. Earnings did a lot of the heavy lifting. You didnt have another 20 , 30 year. Call it whatever it was, roughly 11 , 12 on the s p. This coming year will be earnings dominated. Will be slower. 7 , 8 . A lot of that will come out of the fact that the economy is doing better when you put it into the mix, earnings should follow nominal gdp with a premium. That leaves you a roughly 8 increase for the year. How much do we need to worry about the low cost of capital and dislocations between the rest of the world and the u. S. . Is chief capital adversity affecting investor behavior, entrepreneurial behavior and the like . You could make that argument. Keep ing keeping Interest Rates lower does create distortions in the marketplace. Leads to distortions in resource allocation. I would be the first to tell you at some point well pay the piper down the road. In terms of the here and now and the coming year it comes down to where do you put your money . It seems to me the fed will be slow to raise Interest Rates even when the time comes. Bond yields are coming down. At this point, how much further can they go . If we dont get further decline in bond yields from here your total return will be barely more than 2 . It comes down to saras question about valuation. Valuation isnt in a vacuum. You look at the p multiple but have to compare it to where Interest Rates are. Thats why im not overly worried about how expensive the stock market is. It will come down to what the earnings landscape is. Which sectors to be out of in the coming 12 months. One last question since you raise the fed isnt going to raise Interest Rates and some would say will not raise Interest Rates at all during the course of the year. A lot of people are frustrated by that. In this environment, presumably if they did start raising Interest Rates prematurely, you could have a huge effect on the dollar, couldnt you . That could really upset the apple cart . They painted themselves into a corner, you could argue. It reminds me some what of what happened in 97, 98. The economy wasnt growing 3 was growing more like 4 5 . Unemployment at 4 . U. S. Economy was operating as greenspan said in oasis on its own. The u. S. Is 90 domestic demand. Its economy could go it along even if exports dont do well. My sense is that the fed has already telegraphed if they are going to start to raise Interest Rates, they are going to move gingerly. It will be at least a year or two before they get to neutral. There is great frustration in terms of financial repression for acute savers. When they start to raise Interest Rates, the level we are coming off of and the fact this is a slow go approach by the fed, rates will not go to any normal levels for years down the road. Really . Thats been a tail wind. 5. 8 Unemployment Rate where. Do you think well finish the year . Probably around 5 . Wow. You still dont expect an Interest Rate hike. Great to catch up with you, david rosenberg. A new year and new recall for General Motors. The automaker recalling more than 80,000 suvs and trucks for faulty ignitions. They filed this at the end of last year with the national highway traffic administration. Because it was a slow news flow. It is a new recall but compared to what General Motors posted last year its not huge. More than 83,000 vehicles. Most 2011 and 2012 trucks impacted by the fact the ignition may get stuck in the start position. There are no injuries no fatalities linked with this. Potential is there for it to be stuck. General motors issuing this recall filing the paperwork with the national Highway Traffic Safety Administration on new years eve. When you look at the total number of rails within the last year for General Motors what a staggering year. 84 recalls in all. 26. 9 million recalled in the u. S. S, more than 30 million in north america. Yet for General Motors and the other automakers who had huge number of recalls in the last year this surge in 2014 did not hurt sales. We talked to the folks who crunched all the recall data. More than 82. 6 million vehicles recalled last year. And sold were 16. 5 million. They were sold at record high prices of more than 31,000 per vehicle. When you look at this last year a lot of people will say the dealership stocks were the ones to look at. Autonation is a perfect example and the other publically traded dealership groups. They had a nice run, in part because there is a complete disconnect between seeing all the negative news about the recalls and the fact people are saying i want to buy a new vehicle. Its not stopping them from going in to the dealerships. Thanks phil. When we come back, retailers closing out 2014 on a high note. Consumer discretionary sector a 10 gain. Dom chu has more on that. Lets talk about where phil left offer auto parts, retailers and cars. There is perhaps optimism about the consumer. If you look at the Retail Sector you see the s p 500 is up 13 over the past year. If you look specifically at one part of the market, Retail Stocks specifically and the funds that track them you see the retail etf is up 12. 5 . In line with the market. If you dig into it deeper you see the real standouts. Target stores up 21 . They have a new ceo brian cornell. Formerly from pepsico. They are recovering and up 21 . Peep are buying cars. There is optimism about auto parts retailers. Oreilly auto parts up 28 . Optimism whether people are buying more stuff to fix up their existing cars. The single best performing was staples up 50 . He wants them to merge with office depot. Some story lines for staples. Retail stocks have shown a strong fourth quarter. Can they continue that run with Consumer Spending in 2015 . Thank you very much. Up next 2014 was a big year for ipos. Biggest in more than a decade. Alibaba, gopro, king digital all going public. Will this year be just as big . I have a cold with terrible chest congestion. I better take something. Theraflu severe cold doesnt treat chest congestion. Really . New alkaseltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. [breath of relief] oh, what a relief it is. 2014 bought a slew of ipos. This past year was the biggest for u. S. Listings since the dotcom in 2000. What were the top performers of the past year and what is now on deck for 2015 . Joining us post nine david menlow president of ipo financial. Happy new year. To you, too. We raised 96 billion with ipos last year. And i didnt see a penny of it. How does it look for this year . This year has to be better. Sentiment, this is the layup kind of answer. Sentiment is really wonderful. The people who are trying to get their companies from a private basis to a public basis have a wideopen platform because everybody now is receptive and they know quality has been the upgrade. Is the pipeline as good this year coming . We dont see the pipeline as actively as we would like to. Shake shack started three months ago and now we have the actual s1 filed. The window has narrowed dramatically. It was a good year for ipo returns. On average up 19 beating the broader markets 11. 4 gain. Does that bring more interest to ipos this year particularly from retail . Its like dominos falling. Soon as everybody sees weve got rotational shifts within the marketplace Like Pharmaceuticals did extraordinarily well this year. Everybody believes its not just biotechs. A lot of talk about entrepreneurs who dont see urgency, plenty of capital, no rush. Will there be urgency later in the year . Yes. People need to be first into their marketplace to get the biggest market share. Example . If you take a look at food stocks. If you look at chipotle and what happened with that. Then go into chewys which came out this year. People say its another mexican concept. It spiked and started to peter out here. First in gets the largest market share. On the New York Post last week brought back the question of the future of the New York Stock Exchange and the floor itself ultimately. Alibaba was a huge event this year. 25 billion raised. Many people felt on that day it was qed. Can you give us color as to what that event proves or how you can monetize it in terms of the value of this platform and the nasdaq and how they compete . Its a very subjective subject you bring up here. I believe that the New York Stock Exchange has this aura around it that they can get anything done under any possible circumstance. Because of the Human Element . Possibly and the throwback the New York Stock Exchange has the impact panache. Companies are looking to do business the best way they can, fastest way they can. Once they are public i dont think there is a difference between new york and nasdaq. Virgin america. You were there for that. I was. 89 . Is consumer going to be more active than technology . We think of ipos and startup we think of the hot tech space. It was Consumer Companies that did well. I thought we were going to spend a lot of time on the shake shack and what happened in the ipo area for restaurant stocks. In the last five years, there have been 15 stocks in the restaurant group. Their return for the stocks that have been up which are 2 3 of those, 65 . If you take all the stocks even the five dourngs you are still looking at 31 on return. Why is that . I dont have an answer for that. Thats about the honest answer i can give you. Multiples out there are extraordinary. I think a lot are unrealistic. People are looking for, i guess i mentioned before chipotle. They think anything that becomes public will soar. Do you have a problem when people use percentages like that, but that include the first day of trading when its difficult for the average joe to get in . I do one metric that shows x first day. On that basis you would have suffered quite a bit if you didnt get the original ipo shared stock. For saras answer the consumer is there. Every single one of those, september for one. 1415 stocks opened at a premium. The one that opened down on those 15 restaurants socks was del frisco. The stock is up 86 . Good to see you. Always a pleasure. Have a great year. Thank you. When we come back which ceos will likely find themselves under a microscope as they try to revive their struggling brands. Careful with that selfie. It might be illegal. Some of the most notable and outrageous laws going into effect in the new year. Dows off the highs. As several companies try to revive their struggling brand, ceos are under scrutiny. Its an interesting list. Several ceos are overseeing changes in strategy they expect to reinvigorate their brands and hopefully quiet critics. Twitters dick costolo. His plan is to make twitter easier to use and introducing new services to attract new users. Mcdonalds will be unveiling a new menu. Ceo don thompson hoping this will be a recipe for reviving sales in the u. S. The biggest market in a lot of ways thompson is under the most immediate pressure because any results from this new menu good or bad will quickly be evident in the firms Monthly Sales figures. Yoohoo stock may be up over 128 in two years but critics say Marissa Mayer needs to do more as they claim the credit to the multimillion dollar stake to alibaba. Mayer plans to return that to shareholders. What will she do with the rest of the money . After a flat year for stocks sales and weak one for profits, coke is planning to cut costs and shed its low margin bottling business. Analysts wonder if muhtar kents plan will act fast enough to keep critics at bay. Ginni rometty tried to reinvigorate the lowest performing dow component. All ceos will be watched closely along with their stock to see if their plans bear fruit. Thank you very much mary thompson. A slew of new laws take effect today across the United States. Several hundreds in california. Jane wells has some of the highlights. Welcome to the program. In the uk is it the habit, every year do you have to have hundreds of new laws . Is that a thing there . Im curious. Not really no. Its a thing here. California alone has over 900 new laws. The biggie illegal residents are lining up to apply for drivers licensees this morning. Dmv hired 900 extra personnel to handle the estimated 1. 1 Million People who may come in over the next three years. The big winner insurance companies. Insurance will be mandatory and perhaps eventually rates the rest of us pay for uninsured motors its will go down. Large airports in california must provide breast pumping station. No confederate flags, no stars in bars can be sold unless part of educational or historical purposes. What state entity in california is selling confederate flags . Its against the law for websites to pay a fee to remove that ugly mug shot they got a hold of. Students cannot be expelled from school just because they quote, willfully defy teachers. The california red legged frog made famous by mark twain is our official state amphibian. Wine distributors can ship wine directly into massachusetts to customers. Also massachusetts allow selfserve gas pumps to have a clip which hold them open so you dont have to freeze your hand in the winter. Illinois joins with states and cities barring employers asking about your criminal history on an initial job application. In arizona there is a right to try law which lets people try medical treatments that have passed first phase Clinical Trials but have not yet been approved by the fda. And new york . Im glad you asked. No more Tiger Selfies in new york. No more taking pictures of you with your big cat. Sierra eisen, im looking at you. Im not a cat fan. I dont know. Carl, do people take selfies with tiger . Youre the selfie queen. People are writing in. Im deferring to our new legal expert. Absolutely. I would say that if the cat is big how big is too big . If the cat is this big, is that too big . I think you have a constitutional challenge here. Is it all cats or tigers . Domestic cats . Its all big cats. They should outlaw cat selfies. And dogs. Why are you seen allowed to be whats wrong with that . That was a kitten. Cub. Excuse me. I didnt know there were that many tigers hanging around new york state. I dont know. Kudos going through all those new laws. Thats what we call news you can use. You bet. Im here for you. Jane wells out in california. Straight ahead. Utilities turning in their best year in more than a decade. Absolutely stunning advance, sending the year up 25 . Will gains hold for the new year . We are already seeing new lows for this year on the 10year treasury. Utilities in demand. Well have more after the break. Ir you. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any allergic reactions like rash, hives, swelling of the lips tongue or throat or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. You might have thought the utility sector might be in for a rough open. No. Its gaining ground again on the first day of trading. Joining us for a technical view of the markets is martin newton. Good morning. Thank you. You like utilities here. I do. The sector shows good signs near term. Relative strength. Top performer last year. Yields continue to go lower. All those are good reasons to still own utilities. Also the fact they are widely hated. Everybody thinks they should move lower. A lot of strategists, thats their worst performing sector. Theyve been right about the stock market part. Obviously utilities continue to work. Is this a prime example why Technical Analyst shows where weve been but not likely to go. Until they break down you are going to say theyre great . Theres been a lot of interesting developments the last couple of months. Utilities, moved to new recent highs. Youve seen relative breakouts over the last month and on a threeyear basis, you are challenging a fiveyear down trend in that market. Any signs of the market pulling back this year will create a bid for a lot of these defensive sectors. Weve seen signs of utilities and Consumer Staples starting to strengthen. Last year discretionary utilities was the best performing sectors. Tenyear treasury year is collapsing. 211. 30year yield broke 2. 70. It was a big surprise in 2014 and that is rates stayed low. They are heading lower. I think they do near term. Its been difficult to fight the move in treasuries. They are seeing that globally with sovereign yields hitting record lows. This morning we saw the german fiveyear yield move negative. As countries embark on qe and the u. S. Is trying to move against that. Markets seem to be embracing this move towards global debasement of the currencies as we try to fix our economies. The markets are cheering that. You wonder why markets are rallying. Can i stamp a big warning sign over all these moves we had since the day before christmas last week . We are on very light volume or lighter volume than normal. It is perfectly possible when people get back to trading properly the beginning of next week or after, youll see a reversal of these moves, particularly on the treasury market surely. Potentially. You saw a big spike in equities from the 15th to the 29th on light volume. You had problems in momentum in reaching the highs we saw. That continues to be an issue for u. S. Markets. Breadth and advance decline flattened out. You only see 55 the stocks above their 200 Day Moving Average versus 35 last summer. Crude oil peaked. You look at euro stocks 50 in june. The u. S. Market has been the best market almost globally. You raise a good point about the number of new highs. Vix up for two quarters. Was the hunt for 2100 misguided . S where is natural resistance . 2100 2150 there is a lot that suggests there should be resistance. New time allhigh territory is difficult unless you make projections. I do see a greater than average chance of the markets finally achieving their 10 correction this year. Really we are very late in the game in terms of not having this 20 correction. The third longest rally without 20 correction, each time those ended in 40 or 50 pullbacks. Im not a bear per se but we seem to be late in the game. The trend is ongoing. Most people that used a ruling did better than everything that are real concerns. The market continues to move. Its important to keep and track these sector relationships. Youve seen a decent move in financials that could be interesting. We didnt have any corrections. There were four big pullbacks that were sudden and scary. You expect the number of volatile periods like that to go higher . Would you tell people to buy the dip which worked so well last year . You have to continue to buy the dip until you see more Meaningful Evidence of technical deterioration. Two levels. 1962 near the december lows. If thats broken that would be a warning sign. Under that near october lows at 1820. Breaking that would give me greater evidence that the market could experience a larger than expected correction. We are 100 points away on the s p from that. History suggests this will be a great year when you look at the cennial patterns. Each of those were up 20 . Four up 30 . That statistic drives viewers bananas. Like the player whose last name begins with a d or t on a tuesday. Im suggesting a hitandrun mentality this year. Dont become complacent. Stick with the trend. Look for sector developments. I am probably more subdued in terms of what i expect for 2015 than a lot of people. A lot is because these divergences and breadth deterioration. If we can see heavy participation, i would be more bullish in thinking we continue on and do 20 . Right now im a little more cautious this year. Good to see you. Happy new year. Thank you. Lets get over to dom chu. Ive got more evidence of strong sales at the end of last year on the retail side. Rite aid, comparable sales rose last month. That Beat Estimates from the strong pharmacy department. Rite aid shares up 2. 5 . This continues the roller coaster ride over the past year. That ride has been worth it. Shares up over 50 since last january. Up almost 450 since the beginning of 2013. Thanks. When we come back 2014 was the big year for marijuana. 19 states considered regulating the drugs. Whats ahead for the drug in 2015 . Well get more on that later with the dow a 31 point gain. Other made the best toffee in the world. Its delicious. So now weve turned her toffee into a business. My goal was to take an idea and make it happen. Im janet long and i formed my Toffee Company through legalzoom. I never really thought i would make money doing what i love. We created legalzoom to help people start their business and launch their dreams. Go to legalzoom. Com today and make your business dream a reality. At legalzoom. Com we put the law on your side. The dollar is strong and treasuries are rising. Rick santelli, good morning. Good morning, happy new year. I would like to welcome our guest. Not a doctor for shoulder problems but for economic problems. I look around i see lots of debt. I see lots of comparisons that the u. S. Is doing better than everybody else. Is that really enough . No its not enough. The United States is xetively indebted. Thats the reason while you can have transitory growth spurts they cannot sustain themselves. When i look at the growth it has improved. It can improve for limited periods of time. But not on a sustaining basis. Thats the problem. You can have intermittent spikes in inflation or Interest Rates, but the economy is too weak for growth to sustain, too weak for inflation to hold up and Interest Rates, though they can rise, they cannot stay up. They trend downward. I like one comment you made. You said the economy is too weak for pricing pressure sometimes called inflation, sometimes called commodity action, whatever it is. I happen to agree with you. As i see rates to the five year negative in the euro zone. Tenyear rates closing in at the 2 level, are Central Banks playing the same sheet of music too often . Maybe its time to try to rewrite a few notes. Maybe if they worked more with the Political Class to come up with ways to reform and create growth, the prices they are looking for would follow. Agree or disagree . I think Monetary Policy is basically shot itself in the foot. U. S. And globally. They allowed too much debt creation in years past. Debt is an increase in current spending in lieu of a decline in future spending. The problem we could address the problems we faced domestically and globally. Only through fiscal policy. That requires shared sacrifice, Strong Political leadership. We dont have that. The rest of the world doesnt have that. As a matter of fact, let me interrupt you again. The word in the journal today is the president will work with the new congress. I saw that deal they made at the end of last year with the lame duck. In the last 30 seconds, my question is im not sure im going to sing kumbaya because there is compromise. This is going to address things that are ticking time bombs. When is the last time we heard anything about entitlements and we continue to spend more than we make. Entitlements are the key problem. Nothing can be done until after the new president is installed in 2016. And maybe not then. Its been a pleasure. I wish we could end it on a brighter note. It is the beginning of 2015. Maybe well get the world in order this time. Welcome back. Rick santelli live from chicago. Up next, polaroids gopro rival. Can they compete with gopro this year . The ceo will join us live with his take on that and the companys new ownership after the break. 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And in 2015 tax revenues from legal Recreational Marijuana will explode like a weed not just in colorado and washington but in newly legal markets in alaska oregon and washington, d. C. And hail threes three predictions. Bank on it. The one remaining hurdle in this allcash business is banking. The federal government has eased regulations so banks can accept legal pot money but most dont want to touch it fearing regulators will change their minds. In 2015 banks will change their own minds and start opening accounts because alternative Banking Systems will popup to take that business from them. Second. Pot pushback. Despite more spates legalizing cannabis youll see voters remorse as cities deal with a lot of people using a lot of pot because its legal. Third. Pot of probably coming in 2016 california. Where most of the nations home grown illegal pot is already produced in humboldt company. Fear of a takeover by big tobacco. Where are we on the banking side . Who will come in do you think to take this pot cash . Well they have already chartered, finally, a credit union called four kwourns fourth quarter. No Traditional Bank yet but the credit union has been chartered. It is waiting for its official number from the federal reserve. That is huge test. Because they said you can go ahead and have banking if you follow as these rules. I guess the cost benefit is stacked on that. Yes. What about the new products . If you want to say 2014 was the year o of edibles. The cannabis which is the marijuana blog popular the denver post. The hot new thing will be crystallized thc that you smoke. Like free basing pot that will give an intense high and this can lead to problems and more of the pushback that i talked about. Sounds scary. Does not sound encouraging. Well see if the states are equipped to deal with that innovation so to speak. Yes. In the meantime polaroid kicking up 2015 with new ownership. Ceo scott hardy from minnesota. Good morning. One of the names that investor viewers, anyone cant get enough of just watching a as the narratives and chapters go on over the years. But this cube is getting a lot of chatter. Do you want to talk about what it means for the company. The cube is a very interesting product. Its a lifestyle action camera whereas the dominanter competitor were focuses on more broad demographic. It is simple to and easy to use and priced at only 99. 124 wide angle lens. Shoots in 720 or 1080. This meant to go against the gopros . Its meant to be differentiated and unique. It can be used against those but really i see it grows the overall Action Sports market which is a Thriving Market in the camera category right now. I said to carl they thought it was pretty cute looking. And you mention the younger demographic. Is it sort of like a gopro for kids . Is that who you are going to be selling this too. It is only 35 mm square. So it is really small and has a magnet built into it. And my kids got them for christmas and the way they are using it and the different ways they are attachingics makes it much more fun than the typical sports camera. What is the future of this company . And i wonder, you know taylor swift famously put a polaroid picture on her new album to signify it was vintage, 1980s, that a good thing or a bad thing that you are associated with the 80s photos. Her album was 1989 t year she was born. And what it speaks to though is we have this huge interest, especially from the young female adolescent teenage girls who love instant photography. Question not build our cameras and do it fast enough from this younger market. And taylor swift, her whole album to me just speaks to the genuine interest that demographic has in our product line which is growing and thriving. Did you just say you have supply problems . Are you not able to supply the market . Is that what you just said. What im saying is there is so much demand right now for the analog instant photography products it is hard to build it fast enough. Were continually chasing supply to get the demand. Can you talk about the way that you have come out of the second bankruptcy and the family that is controlling you. I think they paid 17 million is whats reported. Do you have the resources to take a product gadget like this around the world . Because that is the Huge Investment isnt it. In this recent investment where they have infused capital into this Company Really is a testament to what weve been able to transform this Company Since 2009 when they first got involved. Weve really restructured to a strategic licensing model where we really are looking for curators of innovation and find finding people with cool new technologies and products and bringing those to market. We now have all the capital we need, stable capital with a longterm horizon. So were really wellpositioned for the future. Yeah i think it is interesting. A lot of companies that have been through distressed situations tend to, they are ashamed of the their past. I think its interesting, the stripes on the cube are almost homage to the polaroid from back in the day. You must feel consumers have affection for the brand at least. We certainly do. It has this iconic element in terms of things like you highlighted the color spectrum the classic border logo which is the white border. Our brands stand for instant, sharing, fun. And weve been able to apply those to our product line and we sell in over a hundred countries now and growing and thriving and going through huge resurgence. Scott thanks for your time. Happy new year to you. Thanks. The ceo of pole roild sno the dows lost more than 100 since the opening bell. Here is jon fortt with a look at the next hour. Were going talk about controversial stuff. Fred wilson says that the apple watch wont be as much a hit as other apple products. I take some issue with that. Well see if others do as el. And snap chat raised a ton of money while you were partying and the microsofts band has been doing pretty well at least as far as splice are concerned. Well talk to the executives coming up 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. Good morning. 8 00 a. M. In las vegas. 11 00 a. M. Here on wall street. Squawk alley is live. Happy new year welcome to squawk alley. Joining us this morning is jon steinberg. Jon fortt is back from the west coast. Still on west coast time he says. Yes. Well see how energetic he is. Ill be congressked out. No i wont this is so exciting. Ism was disappointing for december. 55. 5 is a miss off the estimate of the 5757. Big ten names will continue to have access to easy capital but Global Capital markets look mixed and says facebooks big acquisition of oculus rift will have a bumpy road. And more interesting is what he tweeted early this morning about the coverage that his blog has gotten on our network and business insider. He starts by saying it is annoying that sproezedly serious Media Outlets like cnbc and apple insider report that it will be a flop. Analysts have it from 10 to 20 Million Units in the first year. Most of the stuff was indisputable. Such as Cyber Security will explode in 2013 in terms of bunchts. This is the topic everybody was fighting about. The apple watch conflict. Its so controversial. Saying its not going to live up the hyper. Here is where i think hes wrong. E hi says the iphone ipod and ipad were home runs. They were not. The ipod sold fewer than 2 Million Units first year. Ipad fewer than 6 million. Ipad sold a little under 20 Million Units. So i apple tends to hit more double maybe a triple. It is not until they lower the price and go after the mass market that these become home runs. I completely agree with jon. Whatever the sales in the First Quarter everybody is going to say oh it is a failure. Because the first iphone was exactly. A lot of people said it is not a business device. We definitely have to give it a few quarters. Flop disappointment, whatever we may see, he does say apple stock will be part of what he calls a flight to safety. Saying that route in the Global Capital markets the ib stability will lead teep to goth the flight to a safety. Whereas before that was gold and u. S. Treasuries. Now that means google apple, amazon and facebook. Not the traditional flight to safety. These are hardly startups as they like to call themselves now. If they are part of this flow of capital. Absolutely. And mentioned line and we chat and other messaging players will be a threat. And uber, air box, dropbox will start going public. All predictions i think are exciting. I have a hard time seeing how hes right both ways on apple. If the apple watch is a disappointment, can the stock really be a flight to safety . Because the iphone 6 and 6 plus have been run away successes this year. You are going to have tough comps next year. Do you think with the tough comps and the disappointing apple watch launch it is still going to be a flight to safety . Part of whats going on around the world. Weve seen that with the likes of microsoft and intel in 2014. Id be surprised if with apples tough comps if their flag ship new product isnt blowing the doors off people are going to all of a sudden bid the stock up. You have the buy back and returns to shareholder. You have pretty generous revenue streams. And you had all that when apple was 450, 500 and people were still boohooing. The only place you can put your money and get a return is these blue chip technologies. Thats why all these private companies are being bid up through the roof. We did ask wilson to come on and clarify his blog safe to say he said no. That was the bottom line. It is that time of the year again. The consumer electronic shows is going to kick off in vegas starting tomorrow. I think ces exciting again but not for the reasons people say. Its not because you see the future at ces because most of the hype stuff turns into absolute nothing. But ces is kind of the primordial soup. The ideas and technologies people are trying to put together. They are going to fail but if you think critically you can see pieces of the future. Were going to see a lot of the wearables and homes of the future that are nothing like homes are going to look like. Tro a lot of drones which will make you happy john. And i think that is the stuff. And along with app and applet technology. U. S. A. Today tries to argue it will be the drone show. Is that fair . Overstating it. No. That is overstating it. Ce ces is all about the tv show. The huge screens. Trying to sell the 3d screens. That didnt happen. Now better color gamut trying to go up against oled the thinner tvs are that still way too expensive. 4 k has already become big. The prices have come down but were going to see them pushing the next generation 8 and so forth. A sharper picture still sells. I think it is going to be super boring to be honest. 4 k is a technology everybody wants. I think connected home is a big story. I think its super boring. Ultimately when you have turned your lights on and off with your phone for the tenth time and unlocked your door. At a certain point yes the technology will make there. But it is not that exciting. How about jons point on tvs. Cars for one . Ten Car Companies are going to be there. I agree with you on the cars. But to jons point. Resolution in mega hertz is not an exciting story. You see over time it changes things but, you know. The developments for car, five ten years out . Or trends borne out in the near term. The you see the latest music stuff. The touch screens, all that stuff is real. I got to also mention Virtual Reality will have a good time another ces. Fred wilson also sort poo poo oculus and rift technology. Just because it doesnt have a big breakout year doesnt mean the technology is not real. It is going to take three, four years to bear out just like most of these. And i think at ces you see a lot of things coming on. I think it is a big theme for investors. The minute something comes out and doesnt get wide spread adoption everybody proclaims it a failure. But all these bigs things have taken years to happen. Finally today twitter just rolled out a new feature. It is called while you were away and helps you recap the tweets you missed. The feature pins what twitter considers to be the best posts and they have been testing this over the weekend. I got to imagine you were excited to see this. Algorithm. Twitters first years of algorithm in the feed. And its so funny because they never want to be compared to facebook and then they go and do facebook things. I just dont get it. I think will help or at least show signs they are trying to engage normal people in a service that arent on the 24 hours a day. We did see them speak out on that facebook front. But it is interesting that a company many have now come to define as the realtime source of news, your news feed is focussing on stuff that happened in the past. Trying to bring the logged out user in filling them in on things they might have missed. It has to play. Its smart. You end up missing most of the stuff that happens on twitter unless you are on it like some of us are a few times an hour. So they have their own news feed now. Well see if they are better at this than facebook has been. Even hashtags on facebook still feel clunky. But good for twitter doing this. This is what they need to do to increase engagement. We talked to eric jackson last week who argues just keep trying to be twitter. And that heated up in the last couple weeks of 2014. I dont like beating up on ceos i think the job is a lot harder than outsiders and investors give them credit for. Beat them up one quarter and next quarter they are the savior of the world. I dont think twitter needs to be twitter. I think twitter needs to stop being so much about the plumbing and being afraid of scaring off historical user base and actually do killer new stuff. Exciting things to build on top of that platform. And following through on commitments now. On the investor day they said they would pick up the pace of Product Innovation and rolling out things. They want to expand to the norms. At least the beginning of the year they are getting out new product. I remember when we went to talk to costolo once. You said the story was mo pub. From a revenue perspective. That right there on the screen is exactly what the street is interested in, right or wrong . Absolutely. And i thought with the revenue numbers consistently beating in the last quarter ha that investors were not going to carry art the moderate user growth but they absolute i did care about it. They need to broaden the log in user base because those are the most valuable user. Good to have the gang back together for the first trading day of 2015. Lets check the markets. Early rallies selling off losing most of the shine. The doorway had beenw had been looking at its first up session in four but a lot due to weaker than expected Construction Spending and factory data coming in this morning. S p, nasdaq both down about half a percent with oil leading much of the decline. Lets look at oil right now. Brent a pretty steep selloff. Its come back from lows of the morning. Down by about 1 and a half percent. It had been done by about 3 below the 56 level. Both brent and wti hitting multiyear lows. Wti still down about half of one percent. One other sector in the red and that is casinos. Gaining revenue in macau now we know is down 30 for the month of december. And that will impact las vegas sands, winn and mgm, all of which have exposure to macau. When we come back snap chat just got another massive round of funding. The latest valuation could put the messaging app at the same platform as uber and is shaomi. Call it valuations gone wild. 2014 the year of sky high valuations for tech from 46 billion for chinese smart phone maker xiaomi, 4 1 billion for uber drop box, airbnb. Are these sustainable . Or are we on a bubble watch in the private market . Joining us is glen solomon. Good to see you. Nice to see you. We start this conversation goempb. Given that it is a new year. The Market Dynamic is completely different but do you think well see these Tech Companies fetching continued high valuations . Or do you think there will be are reset . Lets look at the drivers of high valuations in 14. I can identify three. First it is a golden age in technology. Cloud and mobile are mega trends driving huge new industries and i expect that to continue. Secondarily, private Market Options are as attractive an alternative to i pos as ive seen in my career. You can raise more money and faster with more certainty at higher valuation without diverting much of your time and attention in a private round versus an ipo. So thats been a reason why companies are staying private longer and why valuations for these Companies Continue to go up because they are really very Large Companies frequently. And i expect that to continue as well. And thirdly, if you look at the buyers in these rounds sure vcs continue to participate in the high priced rounds but largely you are seeing crossover buyers. Long only funds and very sophisticated hedge funds getting in involved. And they are doing it because they are looking for growth. Difficult to find growth in the public markets. Sure. And there is still plenty of growth in the private companies. And so i expect that to con as with el. A lot of the valuations are justified by huge revenue numbers but the availability of the capital from early to late stage, you mentioned mutual funds as well. Thats allowed this trend to spill over to a lot of companies that maybe dont have the same revenue capabilities. Im thinking of the square and fab and yo. A lot of these companies that were able to capitalize on just the wave of valuations that dont at this point in time have the numbers to justify it. Do you think there will be a divergence in these two types of companies this year . I think you are right in that there are several companies that have very Strong Financial profiles and are raising money at maybe high multiples but still somewhat reasonable based on the financial profile and prospects for these companies. There are others that are far more speculative. The earlier companies that dont really have a financial profile to justify the valuations they are seeing today. And i think in those cases you have to say that the investors who are investing those rounds want to get involved with companies they think have the opportunity to grow longterm. So they are not making quick bets. Obviously when they are investing in private companies they are thinking long term. So that is definitely one reason they are looking at longterm bets. Glenn . Yeah. What about where the revenue is really going to come from in 2015 and beyond . A lot of advertising based companies are out there trying to get their revenue there. Do we see a decline in the popularity of those and a shift towards sbrpz . How do you think that aspect shakes out. Towards enterprise . Good question, jon. Hink the advertising model is still viable and were seeing a shift from traditional Like Television of course and more digital and mobile formats. So there are a lot of players going after the dollars. But there is that lot of competition with the facebooks and twitters sucking in a lot of the dollars. The googles of the world. So younger Companies Going after that pie face much steeper dimension some of the enterprise plays or Companies Going direct to consumers and finding way to monetize directly that way. Glenn, earlier mark cuban rote that cvs are the new nasdaq. They see all the up and coming deals and manage the share liquidity and who gets access. Ipos provide the access to those who have outgrown the other. Do you agree . And is that dangerous . Carl look. As i mentioned before the private market alternative is as attractive as ive seen nit my career relative to ipos and i dont see that abating any time soon because there is so much demand nor growth. And it is frankly is somewhat onerous to be a Public Company. So i understand why management teams and boards are making the decision to stay private longer. I still think that, you know, as Companies Get large there is no way to beat a freely trading market. So i expect companies to continue to tap the public markets. I think though that the days of the 100 million ipos for Smaller Companies are not gone. But well see fewer and fewer and more Companies Staying Private longer and going public when they are bigger. We will look to see what the pipeline stands to gain this year. But glenn we appreciate your time this morning this. Thanks. In the meantime watching the markets here. Dow is down almost 50. At the highs of the day we were up 128. Facebook bought whatsapp for 19 billion. Could snap chat be worth that much . What did we find out what the companys latest filing . Ese ally bank ira cds really do sound like a sure thing 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. Well it is a happy new year, if you were short the dow at about 9 45 this morning. Weve lost about 160 on the dow. Ism was the disappointment. More importantly fixed income. The 30 year bond is 2. 68 and ten year to 2. 10. Well keep our eye into whats turning into an pretty ugly day. And. 2014 was a big year for music, well if you were taylor swift and bigger for streaming services. Shares and music downloads fell 20 in the u. S. People flokd to spotify and pandora. Streaming increases more than 50 . Simon hobbs is in europe. The u. K. France and germany are negative. Peripheral europe doing well. Everybody is back at Work Together with the exceptions of the swiss. Euro zone trading data wasnt very good today. The big news out of europe and its why you have seen potentially the move in treasuries in this country is the interview draghi gave. It took the euro to a fresh four and a half year low. The head of the European Central bank said the risk of deflation cannot be ruled out completely. But is limited. People might expect prices to fall even further and postpone spending. We are not there yet but we need to tack this will riskle this risk. That is a clear indication they may go towards sovereign purchases as part of a broader qe framework. It pushes the spanish and other italian yields down. And the banks higher because they are sitting on that debt. In the meantime a lot of people might find it quite strange but lithuania became the 19th member of the euro zone. And the Prime Minister there was the first to take euro notes out of an atm. You have to understand that for these baltic countries for those who got their independence of the collapse of the soviet union, this is part of a much bigger and Political Security initiative to be at the heart of the it is a big day for them. A move towards importantly, a move towards the west. First two weeks of the year. Well get to watch greece i assume. Elections on the 25th. And the European Central bank on the 22nd and the greek elections on the 25th. We saw greek stocks rising today. I think people are getting a little less concerned about the situation. When we come back, is Marissa Mayer transforming yahoo into a Cable Company . We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Welcome back to squawk alley. A happy new year. A lot going on in tech. Joining us this morning kara swisher the coexecutive editor of the re code. Hi how you doing. Where do we begin . I guess well start with Marissa Mayer. Business insider reporting talks of a deal are on going. And might be interested in buying cnn from time warner. Variety pushing back. They are not buying cnn. That was a ridiculous report. Around the time when Rupert Murdock was in with time warner a number of buyers were mentioned and they were among them. So was abu dhabi. Shes not buying cnn. Shes just not. It is an interesting idea but a very Old Fashioned idea. The new Companies Getting funding are doing newfangled ideas and i think buying a Cable Network is the past. Sorry to say it about cnn but it is an Internet Company and the question is does she want to be a Traditional Media Company . Its an interesting idea but im not sure investors will like it so much. And she doesnt have unlimited ability to do these. They are doing well on search. The long tail stuff okay but the premium advertising not doing as well. Do they need to develop a product there . The Media Business is hard. Shes sort of borrowing tim armstrongs concepts from aol but hes moving into the parameteric and video. I think her acquisition of the bright role is more where they should be going, not buying a giant Cable Network with reporters all over the world. I think you know how reporters are to manage. Its a difficult acquisition. But they are not buying cnn. Scripts is interesting. And they have a lot of food content that could be interesting online. That seems to be the thesis, that the show or a segment about making pasta from five years ago would still play well on the web today. Does that thesis make any sense to you. No. This has been bandied about before with yahoo and msn tried it. I its been tried before. This is an old idea. And nothing new here. More things like bright role and ad tech and targeting and snap chats of the world. I think investors would be mad if she spent all that money on that and didnt give the money back to them. You make the point she doesnt have unlimited resources but how big a deal could she potentially do . Millions. Look at these prices for snap chat 20 billion, uber xiaomi you cant afford any of those. The really good stuff is expensive. So the question is can she bring something together that is smaller. I think investors probably want her just to give the money back. And that is the more interesting thing is the tax thing that is going to happen which weve been writing about. Which is more dull but splitting the yahoo property from the alibaba stuff and creates a very smul yahoo and allowing investors to take advantage o buying or selling the alibaba or the japan stock. Ha it is transaction thats important here. And arguingly just as important to the is to be. And yahoo have very small. The as very small Little Company and that is interesting in a lot of ways. For a lot of people to buy it to me that is more interesting. In the meantime, fred wilson making waves this morning. Whats new. Bearish comments on the apple watch. Says wearables will not live ups to the hype. And after we covered it. Business insider covered it. Wilson took issue and went off on twitter. I dont think Everyone Wants a computer on their wrist but plenty will and im certain apple will seat lot of them. You would think that the words we write would be good enough for them and they would not need to produce new ones. So we got grounded today as well. I guess. Dont look to Marc Andreessen hes all grumpy all the time. No im teasing. Wearables, i think a lot of people take them off the wrist. They get them and get excited and spend the money. And it still isnt quite there. I think the whole sector is probably, you know i think it is a very challenged sector still. I have to take something back. When i went skiing with my kids this past week. Every person had a gopro on their helmet. It was fascinating. I dont think how long it will last but it was something everyone was wearing and enjoying which is fascinating to me. And that is a wearable too. Second best performing ipo after lost last year. And wilson also writes you could see the latest slate of the maturing tech Companies Going public in 20u152015. You had said uber will wait longer. What about the rest . I think they all could. I suspect 2016 to me will be the year of the larger ones. What your guest was saying before is why not stay private . They have all this money. They are doing very well and get shielded from a lot of scrutiny from investors. It makes a lot of sense. This place is awash in money. So that is a good situation and they are getting Public Company valuations already. So do the investors pressure to sell . Doesnt seem like it. Do the employees need them to sell . Doesnt seem like. Ibm window. We have companies on the bubble like box. Do you think they are feeling better on 2015 or is it going to be cautious well if Interest Rates go up will the market be good . I dont know. You dont want to have a bad ipo. They are one of the companies that could really suffer in an ipo or if they can get their business in a little better shape. Im not sure what they are going to do. Look at whats going bonn with twitter. It goes up and down and up do un. So these companies these newly Public Companies struggle a lot and question whether they should gopublic right awe wau. You mentioned snap chat. 486 million is the amount they raised in the latest round of funding. From a pool of about 23 investors. And could put snap chats its close to 20 what i had heard. This is previously report they were doing this funding round and its a lot of money. And there are tons of moneyxiaomi was like that. People are really looking for places to put their capital. Ill bullish on snap chat. Another thing i see people use at a certain age. They have a lot of Advertising Opportunities if they manage it correctly. You just wonder why they need this much money. Some reports say they originally set out to raise 40 million but the supply of cash just awash right now. How can they possibly spend that . And how will this end . They dont have to. They just have it. There is a danger to having too much money. But ebay when it went public had most of the money raised when it was private and they never used it. The problem is if everybody is raising money, everybody thinks they need to be raising money. So it is sort of like an arms race. So snap chat wants to be in a position where when the money dries up and the money will dry up they want it in the bank. I think that is probably the emp impetus. A lot to work with this year. Yes. And it is our anniversary carl. You havent gotten the present from me or the flowers. Yours is on the way. Hope you like diamonds. Kara swisher. Is software the the lead man between the microsoft band. Dow is down 23 but first, rick santelli, this 30 year pretty interesting. It is going to get a lot more interesting. That is what were talking about after the break on the santelli exchange. 2015 is going to be another tina. There is no alternative. Another tina head turner. Whats the fed got to do with it. All after the break. Coming up at the top of the hour, new year new trades. Themes our team says will dominate the market this year. Plus j. P. Morgans David Liebowitz reveals his best place to invest in 2014. And who will be crowned trader of the year . The winner pulled it out by less than a half percent. Amazon had its worst year since 2008 and its really hurt jeff bezoss personal wealth. According to our calculations the ceo lost 7. 4 billion dollars as shares fell last year. He does own just 20 of the company. Here is an odd coincidence oracle ceo a very good year. Larry ellisons stake is now worth 7. 4 billion more than at the beginning of the year. In which he abdicated the top title another oracle. You can hardly call this a reversal of p fortunes though. Ellison and ballmer, retirement has been very good to them. Ellison is not retired. Exactly. Lets get to the cme group and rick santelli. A lot of information we can gather right from the get go. Very similar to last year the first couple weeks of january set the table for the entire year for the fixed income side of the equation. Lets look at charts. A bund chart interday. Do you notice . 40 handle. Yes it breached 50 basis points. The five year over there, a whisker negative. Negative yield. The two years, a bit more at five basis points. The ten year 210 as it sits. And lets remember a couple of things. What are the big interday lows . October 15 2014 a day that will live in technical infamy. The integral low for five is 111. 186 for tens still way below the market. 267 for 30s. Not only are we close or closes to touching it today beactually touched it on the 16th of december. Lets look at the spread between the two. 50 basis points add 160. 210. It was 167 this morning. Remember i said it was going draw it down. You already could have made 7 basis points. Yes it is a well worn shoe of expression but nothing look at uber. How many people are on air and we have the best people when it comes to whats going on in nasdaq land. Uber 40 billion capital. 40 billion is where it is priced. Why . Because there is no alternative. I heard three people today say you have or the crazy to buy treasuries. Total returns to date last year werent bad especially for 10s and 30s. But where is the money going to to go . You ever give up salt or sugar . Its hard because you get used to those tastes. The issue is you dont need to be a major brainiac. To know how to invest in 2015. You have to put it somewhere you think you can grow because all the other variables about investor taste are pretty much in the hands of central bankers. Case in point, whats going in the euro zone . Why is it happen . Hmm, maybe because they suspect quantitative easing. And draghi better deliver because if he doesnt were going to have a wild ride in treasuries. But for now watch the spread. The lower they go most likely the lower we go. And if you would have put your money in uber a year and a half ago rick up by a multiple of ten. The question is where will it be a year and a half from today. Will wearables have a break out year finally in 2015 . Microsoft hopes sew with the success of the band, matt barlow will join us when we come back. First trading day of the year. First losing day one in about five years. Potentially two in a row. We have not historically in the last year or so seen new money come in at the beginning of the month. The ten year was 298. Not many predicted this. Guess weve learned you cant judge a year by its cover either. Microsoft launched its version of the wearable just a couple months ago. It sold out in stores in limited quantities but expects to be back in stores this weekend. Joining us from the nasdaq matt barlow. He led marketing for microsoft band. Got to tell you i have a microsoft band but i also have an iphone and blue tooth connectivity turned into such a problem. It is in a drawer somewhere at home after i was wearing it faithfully for a couple weeks. What is the story with the band . Are the quantities up . And do you have the blue tooth problem fixed yet. We are excited about the band and we have definitely seen a lot of people come in and take the band home and use it. So im sorry to hear about the challenges you are running into but a bunch of other people using those devices are having a great time being fit with the microsoft band. You have mentioned online this is an acknowledged problem with bluetooth. You are trying to get a fix. This steams highlight an issue potentially when you are trying to make products run on other peoples platforms. Has that problem, which you have acknowledged out there exists has that cleared up yet . With any roll outs youre going to have updates that occur. And were updating software and usable. Im convinced of seeing people using the band with all platforms moving forward. And the it is a great thing to use as you know. We talked leading up to the holiday at the price point. 199. So it fits squarely between some of the other fitness band and the forthcoming watch. What has proved true about that price point . Is that the sweet spot for a product like the band . The thing we find with fitness devices of all types and now were seeing with smart watches and the wearable space, people are looking for value. And i think what we have microsoft band being great for fitness. 24 hour heart rate monitoring online gps and guided workouts. And working with any phone, that 199 price point is certainly magical. Not only for a gift in holiday but certainly this time of year where people are trying to make best use of they are fitness new years resolution. Microsoft health and microsoft band is a great way to get started. Fred wilson noted venture capitalist throwing cold water at least on apples offering for the year but there is this bubbling skepticism about wearables and whether or not were all really primed to be wearing things on our elbows sleeves, wrists whatever. How do you address that skepticism about a sector that traditionally has a lot of excitement. With any new technology or trend there is going to be a lot of skeptics in the building. But the proof is in the usage. And when we see people who are fitness enthused folks using the band and seeing the benefits we provide 24 hours a day like i said the gps run mapping, notifications coming to your band. Even the sleep tracking is really amazing. To me it is showing more and more these features that customers care about are going to allow them to jump into the category even earlier than some of our biggest skeptics are saying. I think it is an exciting time for wearables. I did enjoy the gps tracking the heart rate tracking things like that. But i also wanted more in terms of graphing over time how this goes recommendations for better sleep. Is that mart of the strategy Going Forward to deepen the services. You hit it right on the head. The big thing was entering in a bold way which we did and now it is a matter of upgrading the services and features and more. Weve got great partnerships that well continue to build on. And great features well continue to build on and i think is going to make microsoft band this game changer in wearables we know it can be. Skepticism out there and i guess that is a good thing because it gives you room to sprooiz. Matt thanks for joining us. You bet. Thanks a lot. Adam levine has a new years resolution. He is fending off the haters on social media. Well tell you in a minute what were talk a these ally bank ira cds really do sound like a sure thing 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. Plenty of us have new years resolutions. Many have already been broken. But adam levine highlighting bullying on social media saying my new years resolution is to address and combat the way people hideously treat each other on social media. My resolution please be kinder. How do you fight that. Kill them with kindness . With cuteness maybe because hes a good looking guy. Facebook hired a head of empathy. Twitter has said it will work to try to clean up the site and approximate you will back some harsh words. Robin williams daughter giving up twitter because of all the mean things said following her fathers death. She did. But she came back. If gaga ever said im done there would be an issue. In the meantime dow is still in the red obviously. Down 28. We havent had a negative last day of the session of the year. And negative first day of the new year in a while. Some technicians looking at the calendar issues of all of this in what is supposed to be A Santa Claus rally. For the s p the last time with we saw the last day and the first day in the red was 2008. Of course we remember the circumstances of 08, 09. But the losses today are far lower on a relative base. That is about where we are. In the meantime you are going to go vegas for ces. See you there live monday. Live tuesday. Monday im gonna the ground gathering all that info so i have something to talk about on tuesday. And lets head to post nine and the half. Jim lebenthal, josh brown, steve weiss, dan greenhouse and john corpina. Oil slick, the selloff continues. And Energy Stocks you should be buying and where buyers should be be ware in