Manufacturing contracted for the tenth straight month, and contracting at a faster pace. And this ban on Insider Selling will end in a few days. China put in some Circuit Breakers that remind me of 87 and they didnt know how the Circuit Breakers would work. They encouraged selling, not discouraged it. The communist party can be late at figuring out what to do. I would not count them out in terms of their ability to manipulate the market back up. One thing is certain of 2015, in the face of bad economic data, the market did not react because the communists propped it. They have abilities to stop selling, including making it criminal prosecution. It could be criminal again to sell. That we all know thats true. Could be a White Collar Crime once again to sell. So, the idea that you think china will be down multiple days f youre selling stocks because of that, the communist party wont let that happen. Some say the manufacturing data from december was not a big surprise, and perhaps it was the market getting spooked to a certain extent by the Circuit Breakers, the first time they were put into effect. Thats point blank right. When we have a new program on worldwide exchange, sara, mr. Frost. We caught there was great moment, had to cut to china you could see it was at first it was okay. Then they kind of it was like everybody realized, wait a second. Maybe there is a fire in the theater, but there was no fire in the theater. Wow, good time to go down. Did it undermine confidence as opposed to help it. At the same time you have a major breakdown in diplomatic ties between the saudis and iran, some other neighboring countries, downgrading their diplomatic status of iranian officials. People are worried about the prospect of war breaking out between shiites and sunnis. Had a proxy war in syria, proxy war in yemen. If you look at military expend didn expenditures of the saudis. This is important, we left 2015 in crazy town. Crazy town meant when oil went up, the market went up. When the dollar went down versus the euro, the market went up. We will face a test case this morning. The dollar is going down versus the euro, and oil is going higher. The machines are set off to buy, not sell will the machines readjust for 2016 . I dont know. They also have to take into account the fact that other commodities, ones consumed by china are going down. Copper, for example, i believe. Baltic freight down again. Those manufacturing numbers from december. We have a strange bifurcation that we dont typically see. Usually oil is moving down along with Everything Else or much of what china consumes a lot of. We had the first exports of oil from this country, went to a dutch trading country, no ripple whatsoever in the price of oil. More oil coming in. It has to be a hotter war than what we have now to drive oil up because the glut is so great. We were in a tick for tick market in 2014. Oil goes up, we go up. This will test that. Well test that today. People talking about january once again. Last couple januarys have not been good. Actually this first trading day of last year was very mild, dow down 10 points on the day. Doesnt look like it will repeat. When the futures opened last night, wow. Interesting start to the year. We had a down week. Maybe buyers come in. When china collapsed, we went back into that august last week of august mode, the last week of august, tremendous decline. Sometimes we forget how bad that market was. That is when mr. Bullard was so sanguine, reinvented that word, made it more than the s. A. T. , part of the s p. We went down. That was lock step with china. I dont think that will happen again. What we were most worried about is the fed hiking. The fed hiked. Other than the fact that we all have to ask everyone including dogs whether the fed will hike this year, we know the fed just hiked. Its unlikely it will hike now. I can turn to you, do you think the fed will hike next month . No we just hiked. Changes the discourse. Changes the discourse. We can do it. Were pavlovian, but it certainly has less relevance. The december move was warranted, and there could be four or more in 16. How can they see that far . Do they see around the corner . What do they have . Night vision . Nightvision goggles . Come on, guys. Stop it with that. The four four because it rhymes . Four on the floor . Four. What is that . The magic number . The lottery is 300 million. Play 444. Like moses malone, 444. Im done with this. Know were focused on college basketball, final four. Were focused on the playoffs in denver, any way. Thank you very much. I was finding myself, what do i focus on now that im a new york sports fan. Do i have to wait for the mets . I have to wait until 2018 for anything yes, you do. 2018 plan for my teams. Those sixers are coming around. Any minute. I wanted to go back to this idea of the fed and discussion of the fed. Im dealing with companies, im talking about kroger, netflix, talking about amazon. Talking about winners. Theyll be down today because people, like some guy decided to downgrade netflix because of rising costs. Whatever. You can make anything up. Today is a down day. I urge people to remember there were four hard down days during the sanguine period. This is probably day one of that. You want to start looking at the companies that were winners last year that are just going to have multiple compression year. You dont say ill buy caterpillar. But, jim s that let them come down. Let them come down. Its cold in this country. Retail ended on a warm note. In other words, it was warm. And you will get really bad quarters from retail. Im looking at a stock like lululemon, two upgrades, a note from jpmorgan, matthew boss, talking about the standstill ending with advent the first week of february. Watch lulu. Taken to a buy or outperform. That stock i know it was stock specific for you, david. Thats okay. Lulu did not go down after that horrendous quarter. I know it has nothing to do with the saudis, iran, china, maybe thats positive. Maybe. Maybe. Not the only research weve got today. Cmg taken to market perform saying earnings will not only miss this year but next year as well. They name buffalo, wild, jack and yum. Pop eyes doing a lot of playoff advertising. I read that note. Im cautious on being too cautious could. It go to 400 . I went to two chipotles in the last ten days. I was kind of like the only guy. Were you sort of alone in the line . Yeah. But i got a chipotle family. Theres some more people in the chipotles in the south that my daughter went to. In other words, antidotically its real bad. I walked by a couple, didnt look crowded. Walked by one, went to panera. Jacked. Been some empty chipotles lately. News out of gm, investing 500 million in lyft, going work with that company to develop selfdriving cars. Carl icahn may be smiling when he wakes up. So often we dont get this level of detail from these companies that are not public. Theyre telling us this values the company at 5. 5 billion. What i found most interesting is that together the companies will work to create what theyre calling an autonomous ondemand network. Essentially i think they are putting in place at least the idea for the future of having an ondemand network of cars that drive autonomously. Therefore gm would be the provider of many of those cars. I dont know if its 10 years, 15, quicker, slower, but the day is coming when we have autonomous fleets of cars out there. You have to start to wonder what is it going to look like in that world . We talked about fang. Facebook, amazon, netflix, google. Alphabet is going to be down hideously today. On thursday it will be downgraded because you cant take the pain and then buy. Theyre ahead on autonomous do i want to own the network or the car company . Wouldnt i rather be in an uber or lyft in a world where people may be paying me a monthly fee i just want to own the technology. Of the Autonomous Car itself. Yeah. What are annual sales in a car industry where you have fleets of Autonomous Vehicles roaming the streets at all times . Thats up to my kids. People in urban areas dont need to have a car. Barclays talking about it being cut in half. Tesla made its 17,000 quota. It did. Ferrari now free you dont want to engage in this world. You dont. Im not as fearful. Its not fearful. Sounds good. I think General Motors, thats good, threw a half billion at them. I would rather them throw the half billion at the dividend. I like income, not a selfdriving car. Maybe one day ill like a selfdriving car what would be the insurance on a selfdriving car . Higher or lower. We will talk to dan ackerson at 11 00 a. M. Stay tuned for that. When we come back, an exclusive with San Francisco fed president John Williams as well. How will Global Growth worries affect the feds Interest Rate strategy. Another look at futures. More on the china selloff, too. More squawk on the street in just a moment. Aflac. Ohh ah ah aflac aaaaflac tadaa hes not a very good magician. He paid my claim in just one day. One day . shh how does he do it . In just one day, we process, approve and pay. One day pay, only from aflac. Going to open with a selloff here. Dow futures down about 322 points after disappointing overnight in china. Apple falling in the premarket snapping a sixyear winning streak on thursday. The dow component posted a decline of 4. 6 last year, down about 22 from the alltime intraday high of 134 back in april. Its been a while since it had a year like the one it just posted. This is the year where the company has to prove its more than just cell phones. Skyworks clinked with cell phones. Anything with cell phones people have decided it will have a downturn. I think apple needs to come up with the second revenue stream whether it buys it, produces it, comes up nike with a wearable that can take off. Buys pandora. I saw rob peck downgraded pandora. I mentioned last week why would apple buy a failing service . Apple needs to develop another revenue stream. Those who sell it are saying they cant. I think it can. Those who sell it also seem to be focused on all the different data points that are offered out there from various services about foxconn gave its employees longer Vacation Time or time off in january that wouldnt typically be the case. We keep getting these reports but they do seem to have an impact. Foxconn the assembler of the i phone. Do you own the stock because its inexpensive and you believe the company will come up with a better revenue stream . It doesnt have that now. People say i dont want to own a stock where it may have down earnings. How are you supposed to replace revenue stream with the iphone and anything comparable . Its a virtual impossibility. Is it. The iphone is the most the things they have shown promise in, like cars, do that globally, what theyve done with the phone, would be very difficult. What is mobile besides mobile . Cars. So i have proposed i proposed so tim cook they should buy netflix when netflix was a quarter of where it is. It was a good call. Good call. Now, tim, you can buy harmon. Why harmon . If you go to a harmon plant, you will see its deeply embedded within the bmw, mercedes, lexus families. You cant get in. You cant with apple car just get in. You have to be there in time to insert your 1,000 brain into a car. They need to own mobile car internet of things go with mobile phone. That would be a revenue stream. Just buy harmon. Harmon was going go private at one point. Kkr, kkr ended up buying a piece of it. If tim cook listens to me could be. My wife listens to me. Does she . Check that. Maybe theres a shortage of people who listen to me. Everest and bug listen to me. The pets. I would tell that you harmon is the key. Harmon. You need to have mobile car to keep mobile cell phone. Its the only other air of great growth that apple can get into besides having a product with nike thats 300, wearable products. Tim, youre off to the races. Happy new year. Well get cramers first mad d dash of the new year. Look at the premarket as we get this thing started in about 11 minutes. Those new glasses . They are. Do i look smarter . Yeah, a little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. About 8 1 2 minutes until trading begins in 2016. A Global Market selloff to start the start of trading for the year. Well see where we get after we begin trading. Right now we can get to our mad dash, first one of the year as well. Some years begin the way they ended. Fidelity decides to leave American Express. They have an infinity deal. And embraces visa. Remember how we thought costco and American Express wouldnt be that impactful. Turned out when those split up, it was very bad for American Express. All i can tell you, david, this was one of the worst performers in the dow last year. The question is when will they make changes to stem this decline . Changes as in what, management . Yes, management. This is it. I think ken has done a great job over the longterm, but this is a stock that is you can leave home without. Okay. Where is karl malden when you need him. He lived a healthy, long life. Lets move on to netflix. We happen to have a baird analyst later on today. A man who has the guts to downgrade jessica conjones, downgrade narcos, downgrade net flick. International expansion worries, pricing issues on content and potential rising churn. David my god, look at that thats a head and shoulders holy cow. Reasonable downgrade. Price target is where the stock is. Totally reasonable. Its more about price, saying maybe its priced in the expectations in terms of international. This is the kind of stock where i say dont make the first move today if you want to own netflix. Its up a great deal like facebook, amazon. Theres no need to be a hero on day one. The only stock i will tell you if it opens dow that i want to buy is lulu because of the two upgrades and the note from jpmorgan. Netflix is like, okay, ill make a rnd caeasoned call. I liked it all the way. A little dicey. Thats why im so glad were having him on today. Yes. He is coming on. Or on as you like to say. They made fun of my philadelphia accent all week. Really . I dont hear it that often. Al, towel. First trading session of a new year. Stay with us on squawk on the street. I asked my dentist if an electric toothbrush was going to clean better than a manual . He said sure. But dont get just any one. Get one inspired by dentists. With a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean. Oralb know youre getting a superior clean. Im never going back to a manual brush. Youre watching squawk on the street, live from the Financial Capital of the world. The opening bell in 2 1 2 minutes as we kick off 2016. S p closing with a slight decline from last year. Worst year since 08. This morning we begin with a big selloff in china, bad macro data there, bleeding to europe and the u. S. Sounds like you dont think it will be over for a while. I think we are used to china being this gigantic boogieman that we cant put it in a box. What happens is that near the end of the day sellers come in because theyre so afraid of what will happen at night. That was the pattern during the summer. The market tends to repeat its own ugly patterns. Things are different now. Then it was will the fed raise going into a china decline. The China Economy is doing badly, lets sell stocks. Im saying wait a few days. Then take a look. Dont be a hero. Looking at celgene down, that will have an extraordinary year, i think, in 2016. Do i buy it down two . No, some clown will sell it down five. I say clown because if you look at celgene and where its set up versus china, versus europe, versus the dollar, they dont relate. They happen to be part of a basket called the s p. That is set up to have a big year. Im looking at that as a stock, thats an opportunity. So you should look at your opportunities, map them out as the panic spreads, take advantage of them. Take advantage of panic, but not when its happening, but more when its kind of like near the end of the panic. The first move, youll get annihilated. Did they tell you when the end of the panic is . Thursday. A week from thursday. Three days down, by day two, celgene bottoms, day three, celgene is up. I studied this im so old. I said this is my 680th down whatever. It will be a busy week for data. Well get ism, Construction Spending, some fed minutes, the jobs numbers coming on friday. Theres the opening bell. And a look at the s p at the bottom of the screen. At the big board, the nyse Regulation Team kicking off the first trading session of the year. At the nasdaq, microsoft band and Microsoft Health celebrating fit week. Microsoft. Yes. Thats an interesting stock. Microsoft was the first large cap stock to bottom off the august decline from china. Thats when it all began. If you look at the microsoft rally it began in the midst of the china decline. Probably one of the best performing big cap stocks from that moment. It was. It had a good 2015. Yes, i did. It had double digit increases. I think it can repeat. Many of the names in energy did not. We looked at them in terms of the biggest loser list, jim. Yes. We see wti up this morning on these increased tensions between iran and saudi arabia. At the same time, i have to revisit, we are in 16, when will we see the restructurings that we talked so often about as a possibility for these companies. I got a quib from rbm, has a new book coming out about oil, this is a longer situation, this is a year, as he calls it, of capital. Whoever has capital will make out this year. The flip side is if you dont, youre done. I think thats what well see. Its interesting. You see a downgrade today. I talked with my friend carl english at thestreet. Com. We put this under the category of thanks for nothing. We got a downgrade of chesape e chesapeake. Raymond james goes sell to hold. Tfn. Thanks for nothing. Exactly. Tfn category for 2016. You mentioned some of the top gainers. Mcdonalds and wendys gets an upgrade from nomura, neutral to buy. M