The shine off. Europe higher, the price of brent getting relief. Back home, november cpi with a two handle year on year. Hat fed hit its target ahead of tomorrows decision . Anticipation from the markets. The feds twoday meeting starts today. Tomorrow is the highly anticipated announcement, will they or wont they . Shares of qualcomm are up in the premarket on news they will not break into two. And apples losses continue, one of the key suppliers slashing guidance today. First up, todays the day the fed kicks off the twoday policy meeting. Many expecting it to end with the first rate hike in nearly a decade. Futures are off their highs of the morning after 3m cuts its current year guidance. Oil giving up gains as well, wti hovering around 36 a barrel. Interestingly, the opec secretarygeneral says that low prices cant continue, and they reiterate their guidance that they think nonopec supply will come off next year. Definitely will. A lot of this junk bond scenario that we talk about involves 300 billion in debt. A lot of it has to default because theres not enough cash flow. Also i dont think you want to make a big bet and move into iran and spend a fortune if you dont have a quick payback. Many Oil Companies have cut back the big drilling budgets, there is still tremendous cash flow. The strong players in the United States, the independents, they have asserted themselves. The men from the boys, totally separate. You can tell who is doing terribly. Another critical thing, just back over 3m, my travel trust has a small position in 3m. Want to be bigger. Go through 3m, i know everyone will sell today. I urge people to look. This was not a shocker. Did anyone think that ing inge thulin would go up in this . 3m, is anyone shocked . The stock was up two bucks in anticipation of the meeting last night. If you want to sell the rally off of 3m, youre basically saying ignore everything that you heard about 3m weakening. Prior was 7. 60 to 7. 65, and they straddle next years guidance. I thought it was going to be about 7, honestly. Its amazing they can do these numbers. This is a big company part of the world slowdown. At the same time we have boeing with a much bigger dividend than i thought. 20 . Got a gigantic buyback of 14 billion. Enough big cap stuff in the marketplace. A lot of people are look at stocks like 3m and saying the world is slowing. Who thought it wasnt . I dont know, bullard . The fed . A couple guys in the fed think its not slowing. Is there any evidence . You have car registrations up 14 in europe. We had one china number that is good. Kind of a nogrowth environment. Its hard to grow in a nogrowth environment unless selling directly to the u. S. Consume ner their ho consumer in their home. The fed sees enough growth that theyll raise rates. Employment. Right. Even in the face of a bond market that has not seen tumult like this in quite some time. Continued yesterday. Concerns, at least, illiquidity is the concern. Is it a onetimer . Is it not . We dont know. I think its limited. No one will feel its limited while its happening, thats because the people victimized by it are regular individuals who went in, theyre not hedge funds. This is not like the bear stearns jaffey case, that was a hedge fund, where are they valuing things . These are individuals, unsophisticated that was the beginning of the turn overall when credit shut off completely in the summer of 07. If you people believe this will be that it cant be. Because the underlying credit of t being referenced was crap. And its not bonds. Its a structured loan. To find a buyer of a structured loan in a heartbeat, impossible. Who knows where these things were valued on their sheets. Id like to note. When they put out reports, valuations were not that bad. My point is you have the fed raising 100 billion maybe. Doesnt concern you. It does concern me. Im saying that the fed if you just base it on employment, the fed feels like it has to do it. I look at the world as slowing. To me, them raising rates is silly. Like at the structure products and think its but i think it will be limited. A week from now, it wont be as much focus as now. The people in this stuff didnt know what they were buying. A hedge fund if you had redemptions and these were hedge funds, you would be hardpressed. You said third avenue. There are other funds also liquidating. Ill put it out there that the reed fund, that was shocking. Thats like a plain vanilla fund. People writing that the high yield story is unlikely to dissuade the fed from moving tomorrow what do you make of the cpi number in light of that . I dont think theres inflation in the system. People say we have to normalize based on employment. If thats all they care about, theyll normalize. If thats all they care about. They run on employment. When you look at where is the spending going from the gasoline . You dont see it. When you look at what a Dollar General ceo who is very smart says, look, we have strapped consumers because of rent and healthcare, they dont care about that. They made up their mind. I think they made up their mind. Obviously, if they dont, at this point if they dont raise, people say they know something about the junk market that we dont know. That will really scare people. Yeah. If they dont raise it at this point, people will say okay, lets go back to the well and figure out who is failing . Theyre locked in. If they do a statement that says, okay, weve done this, well wait, people on our network will wait until the afternoon to say that you shouldnt believe them. Maybe until 4 00 . People come out and say dont believe that. So cynical. Qualcomm saying it has decided not to break itself up, despite pressure do so from partners and legal scrutiny from regulators. Qualcomm says maintaining current structure gives the Company Strategic benefits. The chipmaker raising fiscal First Quarter guidance. Theres dialogue on the other side warning about mobile issues, thats why a lot of apple suppliers are in problem. We have a piper jaffey number saying be careful. Iphone will be its a positive piece about iphone. At the same time i totally recognize when you have a supplier cutting very big, people will say that the supply chain is weak. I said over and over again, this stock sells at 11, 12 times earnings, thats because people expect that the iphone wont be as big. If you get upside this is like 3m. 3m at 1. 57, i dont know why it was there. Everybody knows that apple iphone is weak. When every day someone comes out and says apple iphone weak, i say thats why its at 1. 111, maybe it should go to 108. Last April Barry Rosenstein joined me and took a stake in qualcomm. At the time, they said look at a split. Didnt endorse the idea, they did get two directors on the board. While this may not be that large of a surprise, something we did not know about is the composition of the special committee of six directors, including the presiding director, tom horton. Used to run american airlines. Delivered them out of bankruptcy. So, he was one of them. Two independent directors, my point is they did do a deliberate look at this. It wasnt as though the board just en masse said forget it. They did take a close look. I totally agree with you. They seem to think, simply put, these two businesses do derive value from being together. That chips, you know, i. P. Comes from the chip business. You get a lot of intellectual property coming out of the chip business. And the money from i. P. Goes back in to the chip business to help it continue to grow and develop new i. P. And that there would be terminal value destruction if you separated the businesses. There were plenty of analysts out there who thought the same. Looking at goldman, research from earlier last week. They say unlocking some of the parts value by splitting up the chips licensing business would not be a good move at all. Value destructive in the ll longterm and unlikely. They have a lot of things to worry about, not the least of which, will samsung go their way . They had the good deal with jao mi, perhaps the beginning of momentum there for a company that needs it. Some say they should buy back more stock, though they have already committed to a large buyback. So well see. Not great investment thus far certainly for jana. I agree with the special committee, serious special committee. I felt division is not what is needed. What is needed is intellectual property being held up and not being dismissed by big dust kerker customers. I should add i put a call in to mr. Rosenstein, i did not hear back from him. Its about payment. The Chinese Companies are yuusi the technology this will work for 5g. For what. It worked for 2g. 3g. Okay. Do people hate qualcomm . Yes. Does it have a good yield . Yes. Is it part of the cohort which is cell phones which is like the goo within gowanaus canal. I disagree with that analysis, but thats what people say. The upgrade cycle is not working out. Thats what people say. Absolutely right. Everyone who wants one has one. Tim cook said specifically thats not the case on the last call. The stock acts as if the value of the stock reflects that theres not going to be anybody other than china buying a new phone. Maybe india. Maybe a couple cheap ones in india. When we come back, the selfproclaimed king of all media striking a deal. Howard stern giving sirius xm a boost. Well talk about his new deal. Look at the premarket. Close to session highs. Get to more asset sales of ge, some lofty price targets, initiation over at amazon. More squawk on the street from post nine in a minute. Sirius xm rising in the premarket. Howard stern announcing he is staying with the Satellite Radio Service and will continue to produce and host his show on sirius xm for the next five years. The agreement gives sirius access to sterns audio and Video Library for 12 years. 33 million subs in the u. S. And canada, a large part of that is due to howard. Definitely. This is a combination, howard and auto sales stock. You have go both going. When both are going, stock goes higher. People bought low when they didnt think he would come. Howard is still king of all media, car sales are good. Its Liberty Media that owns or controls this company. Owns a majority of the stock. Nice price they got in. They did. Most of the cash flow thats generated from this company, free cash flow, goes towards buying back stock and accruing up their ownership stake. Talked to jim myer a month or so ago and we talked about their key asset, mr. Stern. Howards show has never been better. Never been better. If you listen to it, were just really pleased with where it is. If you listen to howard, howard will tell you he couldnt be happier than where he is right now at sirius xm. He will tell you he and i have a great relationship. We only disagree on one thing, thats value. All kidding aside, im very hopeful that well get an agreement done with howard. We very much want howard on sirius xm for a long time to come. Apparently they got their value figured out. 12 years. Wow. Thats big. Big, longterm take that off the table. Even jim cramer doesnt sign 12year deals. I dont sign 12year deals. No, i dont. Good point. Maybe you could. Maybe we cant deliver the value. Um i i dont know. Well take that one off the desk. We discuss that during the commercial. Someone just mentioned to me, lebron signed a lifetime deal with nike. Lions gate trying to get hunger game prequels off the body. A lot of Media Companies want to lock it in. Nfl, they want to lock in because everybody fears youtube. Did you see these nfl contracts . Iger rolled the table. In terms of signing up free espn, signing up these longterm deals. One of the key questions for disney, monetizing that over a long period of time, where you have agreements that perhaps say you can go down as 80 of subs in terms of what theyre obligated to offer the package to, should get interesting. They had to look at what Google Alphabet can do. They finally got someone who understands sports. They get that International Rights contract may need to be forced to monetize it broadly simply than over cable subs. Culturally i dont think that just my analysis, alphabet people, youtube people were not interested in sports. Im not kidding. Ive been behind the scenes doing a lot of work on this. Theyre not as interested in sports as fox thinks they are. But that can change. And cbs, les moonves. After the mad dash, the opening bell, espn and disney are here celebrating College Football. Well get to that. In the meantime, futures close to session highs. More squawk on the street from the nyse after the break. Me on, come on,why ya sleepin . Come on what time is it . Its go time. Come on. Lets go, lets go, lets go. Woooo hoooo yeah i feel like i went to bed an hour ago. Yeah ill make the cocoa. Get a great offer on the car of your grownup dreams at the mercedesbenz winter event. Its the look on their faces that make it all worthwhile. Hurry, these offers end january 4th. Thank you santa every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. Starts at 6 30 a. M. On the vo rush hounose. Und here but for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Victoria stilwell, you appear on tv working with canines. Are you a dog lover, watson . I do not own a dog. But i work with veterinarians. How do you do that . I help them analyse over one hundred thousand pages of medical studies. Thats great. cause they cant exactly tell us whats wrong with them. Isnt that right, rosco . Rosco. Who is a good boy . Who is a good boy . You are. Yes, you are. Watson, i think you need to work on your dog voice. Where are we starting . Kmt, most people have not heard of it. They do tooling for a lot of big industries. Here were talking about china automotive, u. S. And china, coal mining. Oil and gas activity. Theyre saying this morning the Company Expects as much as a 30 to 60 decrease in previously announced guidance. 30 to 60 . Time for the fed to cut, right . Whats going on in the industrial economy. Theres the industrial economy. 3m, i already said that was telegraphed this was not telegraphed. To have 30 to 60 decline is different from a shade down. Shade downs are perfectly reasonable. What is caterpillar going to do off this . Stock should go down. Lets watch caterpillar off of kennametal. Like ingersollrand what have they been doing . Not as much oil and gas, but kenna metal, has metal in it. Sell it. You wouldnt be scary clsa who came out today and said oil stocks time to buy. Hess, total, stat oil, wow. Bp, hello. A lot of people like chevron today. People want to call the bottom in oil so badly that they even like royal dutch. Are they going to do that deal to buy bg . Bg to me is grad gilbert. They point out most of the consideration is in royal dutch stock, which has also suffered as much as bg has. The real give up is about 4 billion euros or so when you throw in a break up fee, even less than that. You could buy the debt of 100 different Oil Companies in this country and come up with a nice parcel of oil that may be good at 35 bucks, 40 bucks. Seems like they didnt need do the bg deal. I think this deal will go down as a fairly stupid deal. Fairly stupid. Stair fairly stupid, not tot stupid, but fairly stupid. They hate the starwood deal, the jarden deal, the newell deal. Pfizer allergan, but they love vrx because it stayed independent this is like a different opposite world. Look at that. Hes walking off. Its fine. Everything good, david. Well talk some deals and valeant next. Announcer sleep train thanks all those who helped make a difference last year for thousands of local foster kids. Thank you for helping foster kids. Thank you for the school supplies. Thank you for the new shoes. Thank you, secret santa. And thank you for donating money. Announcer your generosity proves that while not everyone can be a foster parent, anyone can help a foster child. Thank you. Thank you. Gracias por su ayuda. [baby coos] thank you. Youre watching squawk on the street, live from the Financial Capital of the world. Day one of a twoday fed meeting today. Cpi hits 2 year on year. Oil managing to climb almost back to 37, jim. Were in a market that oil i was doing work last night. Alphabet, formerly known as google, ticked up 20 when oil went up 75 cents. No correlation to anything else. I did a correlation analysis on mad money. It was amazing, thats what controlled things. When youre in that environment, anything goes. Meaning that if oil is going to move a stock like alphabet, if oil is up, youll have a nice day. I think its ridiculous. It is totally ridiculous. People are not spending additional gasoline money. Theyre saving it. Corporations have seen no benefits. I understand why we have seen only the down side of oil going down and very little of the upside. You know, oil is in charge if oil is in charge of alphabet, its in charge of everything. Yeah. Comes on a day where moodys cuts their forecast for 2016 oil prices. They go from 48 to 40. Average for the year is they say even if we get more consumption, its not going to match the increase in fly. Theyre right. Its all saudi arabia. The saudis have to stop. Nobody will save the fossil fuel industry. Lets get the opening bell at the s p, at the bottom of the screen, more green than yesterday. At least until that turnaround happened. At the big board, espn, celebrating the College Football playoff semifinal games on new years eve. Specifically the orange bowl, the cotton bowl. Over at the nasdaq, csw industrials doing the honors, as if disney doesnt have enough going on with that star wars premiere in l. A. Last night. 360 disney experience now we just need cable subs to go from 29 92 to 98. Thats not happening. Its gone from 29 down. Dont be negative. Since it it was october 30, 2012 that disney bought lucas film, 4 billion in cash and stock. Since that time, bizny disney u. Lucas was paid partly in stock. Disney has a history of reinventing itself. Were looking at cable numbers. That is looking at Something Like abc. I remember when abc first started going down. Everybody sold disney it was a bad idea. The franchise, many diff