Political relief rally banks are in focus this morning. This is bank of america calls citigroup its pick of the decade. The ceo of ulta will join us at post 9 this hour. Well begin with stocks on track to open at record highs. Also adding to positive sentiment, china confirming the vice premier will head to washington next week for the signing of that phase one trade agreement with the United States jim, its going to be busy next week between that and the kickoff of corporate earnings. It sure seems like everybody believes everything is going to be good. A sheer mention of the banks is really underestimated. There are so many people saying buy these. Why does that matter thats who kicks off earnings season already the expectations are pretty high. They better deliver after this run. And thats what these upgrades are mostly all about. I mean specifically on the banks. Goldman getting not one upgrade but two today out of buckingham and b of a, as b of a or it goes from 270 to 245 what needs to be delivered to ratify these calls the 12 punch you have to have a much better than expected from goldman january 29th they break down this new structure the structure is supposed to give you a lot more transparency the structure that goldman has is the structure they had when i worked there 30 years ago. You have to upgrade update what theyre going to do is present some steady streams. Right now its too episodic and cyclical steady streams from the consumer and from the credit card, where i think january 29th theyll tell you how great the apple relationship is going. Thats going to be big. Of course j. P. Morgan kicks it off on tuesday. And thats been the best performer in many ways and trades at the highest multiple typically. Which is why you get bank of america saying positive things about citigroup in the sense that it trades at a 22 discount to its money center peers, jim they talk about the 20s. I still stop yeah, were in the 20s now as a decade of transformation for citigroup like we saw with jpm and other Money Center Banks that prioritize in their consumer business. Do you believe that . No. Citi wants to do the opposite. They want to be able they have got the United States theyre a good consumer presence they can be the Worldwide BankMichael Corbat has sat there and bought 8 of the stock over and over and over again and said they are doing everything right and the street is wrong. Suddenly the street is recognizing how good he does and hell do great for the next decade david, how do you determine that in 2029 citi is the one to be in you cant i have no idea how you make a call for the decade other than the fact you get us talking about it three minutes into our show. How about the century why not the century . Im going to make a call of the well, which century were already 20 years in. Infinity and beyond i think they limited themselves when they talked about the next ten years. They think more like masa in 300year increments. Or three centuries to be part of alibaba. David, look, the truth is that corbat has been saying weve got domestic under control and all these great revenue streams. The street doesnt understand what were doing were going to buy 8 of the stock back because were at tangible book. When we buy stock, the value of the company goes up. Where were all these people when the stock was at 60 and the only person that liked it was me . Where were they . I dont know. I dont know where they were they were hiding they werent ready to make their calls of the decade yet. They were at jpmorgan they love jamie. Is jamie going to be the ceo of the decade, 2029 my guess is well be in the middle of the decade hes still ceo. I think five more years. When you have a founder, david based on what ive heard. Was he the founder . I dont think so. Theres some point, james morgan of course dont forget, first chicago, chemical, i know some of the others, jpmorgan, chase, theres many others in there, bank one maybe he was the founder of one of those. He had to have been because the staying power he has indicates that he couldnt have just been an appointed ceo it does bring to mind what clareda said this morning, that the economy is in a good place, strong labor markets not putting undue pressure on inflation, claims today 214, which is way down from 252 from the beginning of december. I love this line the consumer in aggregate has never been in a better condition. Thats a strong word from a fed vice chair. I wish he didnt say that that sounds like the top if you go over lennars car, one of the largest home builders, theyre talking about jay powell, when he started cutting rates, he reversed what could have been a very bad time. So jay created a kind of notsogreat market beginning october 4th of 2018 and now hes brought it full circle the rate cuts are working. A lot of the naysayers thought that they wouldnt they turned out to be wrong and now we have a decent market based on the fact people were wrong. Witness tesla. Its three minutes in and we havent mentioned tesla and thats a mistake. Were going to get to the baird downgrade in the case of tesla and of course bob on squawk talking about what the company is finally doing right but at the same time, jim, clareda says repo operations may be extended at least through april now to get us through tax season how much of this is a prop, basically a crutch that the market is leaning on look, i think thats some of it i also think they kind of botched it some of the stuff i want to work on for mad money down here, i think its just one more prop. A lot of props we have to go back to what we said at the beginning which was we were three days ago beginning we were at world war iii the world war iiiers are off the table. As long as theyre off the table, we can have this bountiful rally. Pence on the today show did say or maybe it was fox this morning, that the world would look much different right now if there had been casualties at those two bases. So i mean the old phrase dodged a bullet to a large degree is appropriate here. Without a doubt apparently given the reporting there was a heads up or at least a period of time in which the u. S. Had opportunities to make sure people found safety, which is a good thing as well. Jim, listen, it doesnt mean were over in terms of the tensions from iran far from it. Our goal is to prevent them from getting a Nuclear Weapon they are once again, i believe, on the road to enriching uranium. Its not as though the larger context of what were trying to do has been achieved it hasnt. No. And thats probably one of these things where look, ive got them i followed the president on twitter im down here, but i just want to be sure that the rally can continue because were not talking about iran the discourse will be entirely different. The only thing i think something happened at kohls that makes me think that the people who shop there were more concerned that iran didnt go well i dont know if you want to do retail now or have it for the b. But between kohls, jcp, limited brands, its one of those days where we pay attention, at least in retail, jim, to the losers. Yeah, we have have nots that was a terrible quarter, a terrible holiday season. They dont have a lot of traffic. Womens hurt them. But they are so bullish on themselves its almost like theyre in a parallel universe theyre the worst. But if you read the release, youd think they had a dynamite quarter, dynamite holiday season. Well, we should tell people Comparable Store sales for fiscal november and december 19, what they call the holiday period, were down 2 over the same period last year 0. 2 , excuse me. Macys was good david . And theyre at the low ends of their previously announced guidance of 475 to 495, which excludes 22 cents a share follow other costs recognized in the first nine months of the year. Were not going to hear from them until march 3rd so weve got a while jim, this follows what was not a good last quarter, of course, for kohls when we watched the stock decline as well. David, they did this tieup with amazon where you can return things to amazon. Yeah. It feels like people return things to amazon and ran out of the store. I just am baffled that they do initiative after initiative. Look at this stock they have a good Balance Sheet and the dividend is safe, but kohls is just road kill like yesterday walgreens is road kill were really getting whos road kill and not compare this to costco, 9 increase in one month. Costco is so non they never hype themselves. They just deliver after deliver after deliver. The kirkland brand, a lot of people think its the premium brand, its their house brand. That stock is on a oneway collision with 330. Costco december sales out i see b of a now is cutting kohls to neutral, price target 50. They see something they dont like, huh, carl . The stock was 75 in april, jim. Well and largely blaming womens apparel. Theyre going to have to spend a lot more on promotions and attracting customer traffic. Look, theyre just trying to stay in the game they dont know what to do i mean their strategy is you come into work every day and say anybody got anything you guys got anything . I dont know anything there another company, macys, jeff gannett delivered what he said he was going to deliver. Hes going to talk a better story. Kohls, im speechless im speechless wow, there it is. You really were speechless for i counted at least 0. 06 seconds. How did that happen . Im as quiet as the registers at kohls. Thats cold, man. You mentioned macys, jim atlantic takes it to neutral, ups it to neutral. Says the company can comfortably meet their guidance. We got some of their guidance yesterday. Interesting, we got an upgrade today of last years best name, amd thats what we needed thats what we needed, an upgrade on amd they could have made that upgrade 20 points ago. It is amazing to me that people are still starting to recognize that queens own lisa sue is doing a great job. There are two leaders in this country from queens, right, david . Yes, there are. They do admit they missed the q4 run they go to 55 from 38. In this case, jim, its largely about the server market. They say that the price targets are in the rearview mirror. Intel has some supply issues of their own. Intel cant make these shifts what is going on at intel . They were the premiere manufacturer you know the two premiere manufacturers in this country . Boeing and intel those are the companies that everybody said, you know what, if you want to make something, no one makes it better wow. Isnt it incredible how times have changed i would point out you did this as your mad dash i think on monday we talked about amd. Right if you had a favorite stock in the last decade, this was it. I dont know if its your decade pick for the 20s but it certainly was for the 10s. Lisa laid out the road map actually she read me the riot act. When the stock was at 5, she took me aside and i wont say she called me a moron, because my name is jimmy chill starting in 2020. Basically she said why dont you do some homework it started like that but it turned out she was right. Jimmy chill the guys who didnt like amd, they were in a box for ten hours without a lot of air holes. All right jim, a lot more to get to you as youre on the road today well talk about shares of ulta up more than 180 since mary dillon became ceo. Shell talk about the companys game plan for growth well get cramers mad dash and price target increases for fedex, apple, microsoft, mcdonalds and twitter, in a moment i can. 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Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. Lets get to the bond pits a little early this morning. Rick santelli is at the cme in chicago. Good morning, rick. Good morning, carl. You know, we are seeing a parallel shift on the Interest Rates along the Treasury Curve all maturities are basically up one, almost two basis points acting quite firm. These are yeartodate intradays all strung together. Of all the trading days in 2020, you see the 2year note yield there. Not a huge amount of movement. Obviously weve lifted off some of our worst levels based on geopolitical forces. You can see the 10year note lagging a little bit there we have seen the remains of a flattening curve based on the earlier iranian situation, of course, regarding the general. Now, if we look at two weeks of s p 500 on top of 10year note yields, you will see they are tracking nicely. As a matter of fact, most people ideal with in Interest Rates have been bullish stocks for three years. We see Interest Rates are being pulled up by stocks. Upgrades are just Many Companies of course that were underestimated in terms of their stock performance. I think Interest Rates can be included in the notion that as equities continue their big charge, theyre going to be affected, so we want to see how 10year act in the mid190s, how the 2year note acts in the 1. 65 area the dollar continues to depreciate the yuan. Theyre coming and signing that was a good observation based on that relationship finally yeartodate the dollar index continues to do quite well, hovering at some of the best levels in two weeks david and jim, back to you okay, we will take it, rick we get ready for an opening bell to do a mad dash i was trying to think of the corridor here, new york to washington corridor. Usually we go Cross Country but today youre not that far away. No, its amtrak. Yeah, its the amtrak, which is doing very well, by the way, under richard anderson. Its almost on time yeah, yeah. One day theyll even get it going past 50 miles an hour and it will be amazing what have you got for the mad dash a bullet train for you. Ive got Bristol Meyers. This morning jpmorgan talks lovingly about the deal with celgene saying youre going to see numbers about six bucks, about 10 times earnings. Next week is the Jpmorgan Health care conference. I think Bristol Meyers could be one of the stars because of the merger, the numbers go up dramatically. You were positive on it quite some time when there was opposition to the potential transaction. And when shareholders didnt seem particularly excited by it no, there were a lot of chatterheads oh, im sorry, im jimmy chill. There were people who were ill advised in their negativity. And you are positive as well, i guess, at this point for the combination of what it can achieve . If anyone spent 30 seconds with the ceo, they would realize eliquis may be an incredible wonder drug. This is a drug that does its antistroke. Optiva is doing very well. Revlamid is doing very well. That gives them a lot more money to do a lot more buyback which he is addicted to. He likes to return capital to shareholders i like this guy. Hes very good hes from italy, david hes real smart. All right stay right there, jim, well be back to you shortly. As a reminder, you can watch us live on the go on the cnbc app stick around, theres a lot more squawk on the street straight ahead and the opening bell coming up. So following yesterdays intraday high for both the s p and the nasdaq, it looks like the dow may actually join the party today. Needs 128 points to do it. Futures suggest well get there at the open, which happens in about six minutes. Youre watching cnbc squawk on the street. Live from the Financial Capital of the world, the opening bell in about three minutes we have record highs within sight. Meanwhile sales of apples iphone in china for the month of december up more than 18 year on year according to some government data. The Company Shipping roughly 3. 2 million phones up from 2. 7 million a year earlier people watching Chinese New Year coming up later this month, a big giftgiving holiday, and then jeffries today goes from 285 to 350 one more price target with a solid three handle. Almost 50 bucks above where we are its hard to know which numbers to listen to when it comes to china but these sound officially more official. We have to wait for the quarter to be reported by the company itself to sort of see. Jim, that would be a positive no doubt, given how often there have been concerns overall about their market share in that country. 369 days ago, they gave us a forecast that was dramatically lower, 7 billion dollar miss because of a shortfall in china. What a difference a new product makes. We dont talk enough about how what happened, the step from the 10 to 11 people love the camera, people love the battery life. It really resonates. It wasnt just an incremental change those who have the 11 know that theyre wild about it, especially because it takes pictures better than anything ive ever seen its resonating in china whats happened is also theyre not boycotting, theyre buying. They do seem to be, yeah. We dont talk as often about boycotts in fact we should mention reports that the chinese delegation will be on its way here i think early next week, right, carl, to sign phase one of the trade deal. Thats an important moment certainly that were waiting for. It does remain a big question mark the vice premier will come and do a signing on wednesday of next week. Jim, we still dont know what were going to see in the way of text, right . Is this going to be a vague promise . Are we actually going to get a multipage readout of what the two sides are putting their names to what i like is that subtly theyre giving us things remember that American Express being able to have their own unit, paypal has their own unit. If they were to approve the melanox deal for nvidia, that would be very special because they have held that up for months for no particular reason. What i worry about, if i do have worries, its the belief that th