Financials driving the premarket following those beats from goldman and Morgan Stanley plus, netflix sharpens its fangs. The streaming giants beats on subs and promises an 8 billion on original content next year. The stock is poised to hit all time highs. Trump versus insurers, the president calling out insurers and drug makers, both unh and j and y have results this morning. Well get to that. But we are going to start with the banks. Goldman sachs beating expectations as investing bext revenue rising 17 and morgan stan lids exceeley exceeds on td bottom line. Its a good time to be in the Wealth ManagementBusiness Revenue there nearly half of the total. Dont forget has the president tweeted how many electric trillions have been added . I like the fact that Goldman Sachs did not report disappoint on this fixed income trading ip hoping Goldman Sachs reads the release and comes out more positive on the Conference Call. Last time they had good numbers but they were very sir couple inspect on the Conference Call this makes it they should be less particularly with how much stock they bought back, now under 4 million shares and roe is good. What i like about goldman, tangible book value is 200 bucks. You close the building its more than 100 i think goldman deserves to be higher and Morgan Stanley and boeing bringing the dow down because of bombardier being saved. Lets understand, this is a market where at the beginning, netflix was up 4, unchanged and bears shoot it down and want to be able to color the trading then buyers come in between 11 . 30 and 1. Quoegoldman, the last quartea not a good quarter and you point out the Conference Call but it was not a good quarter. Right. This youre right, you know, fixed income currents and execution, 1. 45 billion in revenue, 26 lower than last year. Its more than most. But they had been retooling their business or trying to at Goldman Sachs to move away from Hedge Fund Flows and or to change its mix because frankly they relied a lot on the needs of hedge funds and particularly in building particular products for them that had very high margins and that proved to be more difficult and has proved to be more difficult overtime to maintain whereas the bigger institutional flows didnt always come to them they do but not as much. Thats why morgans model was better goldmans model is in conflict with what the Justice Department wanted to some degree and what i like is that they are transitioning, doing more lending, fixed income was better even trying to get to the consumer but the markets, you know. Its early. Its early. Early for Netflix Goldman wasnt as bad and morgan was consistent, bank of america trading up jp morgan will go to 100, even the dog that is wells fargo, youve got will flying out there to see sloan it could be watershed. Goldman was the only one of the big banks that analysts thought would see a drop in earnings so we got the surprise a couple of interesting story lines, m and a fees up and 14 at jpm. Their private investment, jim, about a fifth of which are equity stakes, up 35. They have a lot of irons in the fire the problem with goldman has been that they were too smart during the Great Recession therefore they became i thought a target were kind of well past that tony west is at pepsico, just no real correlation there like you pointed out. The group is back. Does goldman deserve a 15 multiple you put a 15 multiple, you have a 300 stock. But youre not getting a 15 multiple. Im giving it a 15 multiple. In part because the recent performance has been uneven to be kind. Have you seen the rest of the market whereas frankly Morgan Stanley for a brief time whos market cap eclipsed that has been less uneven in part because of the move towards Wealth Management, its been seven or eight years. Its a great niche, fabulous niche. Turned out to be large. Thats an interesting comparison. Look at that. Remember when Morgan Stanley was 12 and one of those outfits that tried to influence the market said it was going to zero and Morgan Stanley reminded us it wasnt at 12 going to zero. That was a good call that was not early by the way, it was timely. To carls point, m and a has been a strong point, it has not been a great overall point for financial service, decent base of deal making not quite what we saw last year domestically. How about tax reform . They did widen their lead. Yes. Youre if that comes back in Capital Markets they certainly can benefit. Im getting you to move here on goldman here, just a little bit. If it were like olympics, youre giving it a 5. O6 instead of 5. 3 bulgarian judge in there, weve got a 7. Bul gar yan s can never be trusted regardless, its going to help the dow get closer to 23 k. Boeing, airbus takes a stake in a failing Plane Company and boeing goes down six everyone wanted boeing to go down you know what it does after it goes back up. Goes back up. They did say the deal is questionable between two heavily state sub sid diesed competitors. These companies would not exist. Boeing is actually profitable. The other Companies Jobs are like the wpa for countries Works ProgressWorks Progress for those who arent aware. I know what Works Progress administration looks like. Absolutely, we could use a new one in the country right now by the way. Whatever happened to infrastructure. Infrastructure is better than ever i see the new york state ads, were doing great. Nothing happened. Theres a lot of buses being used because subways are broken down. This is true in new york. Bus line just got announced on my street our street in carol gardens thats night. I dont know what to do about it buses come through, like 50 miles an hour, youve got you look both ways, doesnt matter, they hit you anyway. I like the buses the drivers are fabulous, but slow down, buses. Lets get to netflix. As jim says it is off the highs of the premarket, subgrowth up 5. 3. That beats revenue above consensus. Reed hastings talked about the quarter on last nights earnings call. Our focus is on doing even better content and Getting Better partnerships and mobile streaming. We have to have the discipline to keep doing what were doing at many times the scale and if we do that, things will work out really well for our Global Customer base and thus for our investors. The guidance for q4 subs above expectations, although the journal today looks at longterm debt up 45 since the beginning of the year. They could do a 2 billion right now convertible bond stock will be down because what happens there was a little too many enthusiasm after the bell and youve got to wait until the stock comes in under 200 you can let them pick it up. The reason the stock is not going up is because the overall unbelievable theme of the analysts, even though they all raise price target how long can this go on . I point out it can keep going out because its a 80 billion company that represents the only International Tv network worth 100 billion. Let the traders knock it down and long knives be out and then pick it up. They are being somewhat conservative some believe in the u. S. Subscription. I agree, domestic. In part because of the price increase so they are taking that back a bit what otherwise had been the case because fewer people may take it up thats unclear and many people think they are being very conservative. I think with Stranger Things 2. I revealed early on pablo was killed i thought people knew pablo was killed. In narcos in real life. Narcos 2 tracks real life. You mean escobar . It wasnt pena, doesnt not look anything like you we dont have to give too much pena does not look like you at all except for the show he was in game of thrones. Ive got to get the glasses and hair with me. Aviators. I have my dollar store as we sort of deal with the overall eco system of the way people watch television, look at ma mustache. And the flamingos. You come home and see whats on netflix as opposed to going through the bundle. After i have watched to see how boring a Football Game can be people want to stay star spangled banner how did you move from netflix to football . Football is the only thing still being watched in real time maybe the world series, maybe not. Nba starts, i dont know whether people watch nba or catch the scores on this. Jimmy kimmel gives an interview to variety and says its ridiculous the way we Pay Attention to ratings because in his words, ten times as many people are watching on a device after the fact. Yep. Its engagement. I agree. It needs to be measured in a much more effective way. I pulled up with jimmy this weekend. I visited with jimmy as they say in the booth in the nfl. Hes doing a weeklong show in brooklyn what hes trying to do is trying to raise what i regard as being the excitement level of the traditional talk show that were all kind of trying to make it into an event. I pulled up with jimmy. You pulled up with him. What does that mean . Bringing the show to brook n brooklyn. I had a cocktail he wasnt drinking, i was drinking i saw there was jimmy. Hey, how are you doing, buddy . He butdy buddyed me and i palled him. Pal, im doing well. It was a barbecue, my wife got me in. Sounds like a netflix show right there. It was, hey, jimmy. You know you pull up with him and who did you visit with i didnt visit with anybody lets get to break, well talk about j and j on the president s remarks on drug prices and look at the premarket. Industrial production in just a couple of minutes. At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Whentertaining us,es getting us back on track,hing . And finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Got some data headed our way. Well get housing index at 10 00 eastern time before that, well get Industrial Production. For that well get to Rick Santelli in chicago. Good morning, carl, Industrial Production, best unitization hitting the wires as expected on Industrial Production it is up. 3 last month was a dismal month. Two tenths up to seven tenths. Were looking for a number slightly north of 76 but ended up with 76 flat. That follows the downwardly revised but it is an improvement but last month was 76. 1. We continue to monitor the curve flattening and the shortened is twoyear yields move higher to areas we havent seen since the fall of 08. Back to you. Thank you for that. Talk to you in a moment. We have two dow components with numbers. J and j did beat on the top and bottom line. The cfo reacted to yesterdays complaint by the president that drug prices are too high in this country. Drug prices as you probably know represent only 14 of over all Health Care Costs and whats lost in the discussion the immense benefit they provide patients and help reduce the other 86 of the cost that were not talking about. Pharma was especially strong as jeffrey said it would be. That was a terrific number. Waiting to hear what Goldman Sacks suggested sell on. Consumer still going for product, but internationally starting to gain the stock will be down in early once the stock opens, i believe because they did not guide up for the second half again, youve got to buy the stock. These things are. That stock was knocked down off the subsidies going away even though it should have been because they are not in aca. The pattern the first hour, hedge funds come in and blast stocks down because they find Little Things they dont like. Like j and j they didnt like necessarily, consumer in u. S the buyers come in because the stocks arent expensive. When you say not that expensive, give me examples what youre talking about and why i shouldnt be worried about elevated miultiples. Given the fact it does have a real path with return on equity being strong and efficiency ratio being very do you think citi should not sell its funny you came to two financials. J and j is a relative you want to tall allergen after the disappointing restasis i could say its very easy to see j and j at 17 times next years earnings. Does that make sense with the best company in the world, it doesnt make sense it should be at 17 when they have a 15 pharma growth, which is extraordinary. 15 , do you really give it a 17 the journal this week takes a look they ask why were not even higher after eight years is it like the experience of going through two bubbles in the past couple of decades. Yes, it is. People are afraid to trust. Thats where you are. The alpha lows are extraordinary. They are going into certificates of deposit which is a really tough call i think that the class has been so discredited, you have these etfs that are gym micks and that sucks up more money. I think the answer is i have often felt like a tri ser tops because i feel people are fed up they think stocks are manipulated by the rich. You had a eightyear president who felt the stock market was a playground for the rich. Youre not talking about millennials not participating, you say its broader than that. Someone else would hear you saying those things and look at the market we show up and talk about new all time highs whats the Problem Companies are buying back a lot of stock and i will institutional money that comes in and worldwide flows are good for you. You do not see that kind of aggressive price churnings mobile its the anniversary maybe thats a good thing not a bad thing. I like it. You could argue 1999 things got ahead of themselves. Yes. Great deal of enthusiasm. The the nasdaq we got too excited and this week selling nine times earnings, a lot was japanese money coming in nowhere near back all of their banks, i covered banking back then, mitsubishi i thourpt they were going to buy jp organ. They were the big banks. Long term bank of japan you would rather have the current environment . I like the current environment. Im worried about everything because i come in and boeing is down five. If you say you liked boeing yesterday. Didnt you see the bombardier coming its being crushed by boeing airbus is being crushed by boeing mule berg is doing a great job you may not have liked the way up almost 70 this year. What was it doing selling so low because people thought the dream liner would never be profitable its extremely profitable. Dont forget the defense line. Theres a lot to hawaiian punch. Well get cramers mad dash in a moment and count down to the opening bell as we watch the premarket, relatively strong tmobiles unlimited now includes netflix on us. Thats right. Netflix on us. Get 4 unlimited lines for just 40 bucks each. Taxes and fees included. And now netflix included. Has grown into an enterprise. Thats why i switched to the spark cash card from capital one. Now, im earning unlimited 2 cash back on every purchase i make. Everything. Whats in your wallet . Weve got a mad dash going for tuesday. Fairly crowded floor as we wait the opening bell about seven minutes from now you want to talk a little ge weve been talking a lot. I finally saw a piece that is reminiscent of something you and i talked about, largely in 2016, not 2017 Goldman Sachs comes out and says its time for ge to shrink, to grow now they cant one of our favorite catch phrases. They cant do that with the current cash flow unless they trim the dividend. The stock is reflecting a dividend trimming where i would say probably 60 cents. I dont think ge can continue to maintain that dividend and shrink to grow i do feel so we know, lets get the understanding, they report this week, id say no pain without gain is better than shrink to grow they have to talk the numbers down i think they have to tell you if they do cut the dividend that theyll have enough cash flow to be able to do everything they want to do in 2018 cash flow does not we do not meet for the dividend as currently stands financially there are those who say they havent appreciated cash enough over the last few years in terms of it and of course we talked so many times about buying things high when youre buying streams at very high multiples, its not going to help you in terms of contributing cash. Thats where they find themselves. In the last infrastructure buy was classic, top of the market bought oil and gas at the absolute top of the market and sold finance i would argue the absolute bottom of the market. Even sold entertainment at what was a bottom they sold that in a terrible price and let themselves with het care, which is the standout where flannery worked, got the numbers back but locomotives dont fit in, anymore. Maybe they do get smaller. They should get rid of locomotives. What i keep hearing, nothing is sacred. Im not sure what that means but he says nothing is a krsacred. I think thats good there have been so many wrong moves. This has been the worst industrial of our time. They have a big Analyst Meeting coming up and i think flannery can straighten it out but they have to be more realistic. I think dont stop at eps and prove accountable for ditch dend flanner i didny has t