Traders focus on Russia and collateral oil damage

Overnight the Russian Central Bank hiked its benchmark rate to 17 percent, a move designed to stem the big drop in the ruble. So much for that strategy. The ruble has continued to drop, now at 72 to the dollar; it was roughly 50 rubles to the dollar at the start of the month.

It stabilized as a Russian banking official said the central bank will take more measures. Are capital controls coming?

Still, the Russian stock market was down another 12 percent—and down 35 percent this month—though bear in mind this is quoted in dollar terms.

Read MoreWhy Russia's monster rate hike spells trouble ahead

More worrisome is the rise in the yen. The yen carry trade is the classic safe haven play. So much money is invested in borrowing cheap yen and re-investing it all over the world that any reversal in the trend is a sign traders are covering bets.

That is what's happening, with the yen down to 116 to the dollar, from a little over 120 a week ago. Now, that is not a huge drop—on a percentage basis we saw a bigger move in early October—but it's enough to get everyone's attention.

Other emerging markets are also weak. The stock markets in Abu Dhabi, Saudi Arabia, and Dubai are all down roughly 6 to 7 percent. The Philippines, Indonesia, and Vietnam have fallen roughly two percent.

As for the rest of the world, the Shanghai Index was up more than two percent overnight, close to three year highs, but there sure wasn't any positive news. The HSBC manufacturing PMI for December came in at 49.5, showing contraction and falling below estimates. Markets there still appear to be moving in response to hopes for further stimulus.

Here in the United States, Moody's Mark Zandi said on CNBC's "Squawk Box" this morning that the decline in oil was a $100-billion tax cut for American consumers. That's great news. It will be a big help to retailers, especially those who sell the stuff that Americans are spending money on, like cell phones and other electronics. Buy Silicon Valley!

But along the way, there is collateral damage.

Take a look at companies that are involved in construction projects for the energy industry, like Chicago Bridge & Iron. Stifel Nicolaus downgraded CBI yesterday, seeing risks to capital spending on liquefied natural gas (LNG) export projects due to recent declines in crude prices. They were quoted as believing Brent crude needs to be around $70 a barrel for break-even LNG prices to construct projects to send LNG to Asia.

There's a similar problem with construction giant Fluor, also a beneficiary of generous cap-ex spending from energy companies. Roughly 40 percent of its revenues are from the oil and gas sector, and now Fluor is feeling the downside as cap-ex spending will likely contract in 2015.

Elsewhere, three big industrials gave comments.

1) 3M boosted its dividend 20 percent. Earnings for 2015 are now expected to be $8 to $8.30 next year, compared to $7.40 to $7.50 this year. Consensus is $8.20. Organic revenue growth is projected at 3 to 6 percent next year.

2) Boeing announced a 25-percent increase in the dividend, to 91 cents from 73 cents, and increased its share repurchase authorization to $12 billion.

3) Jim Cramer interviewed Honeywell's CEO last night. Honeywell kept its 2014 EPS guidance and gave 2015 guidance of $5.95 to $6.15 a share, about in line with expectations. Organic sales for 2015 are expected to increase only about 4 percent, total revenues are seen increasing even less at 1 to 2 percent. That's a bit of a disappointment, but that is what it is like in a slow-growth world.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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