Can you guess what company just passed facebook to become the second most downloaded app in the world well goat you the answer a bit later in the show. Its a busy hour were kicking it off with target missing the mark a once red hot retailer posting the worst day since november 2018 after reporting sluggish electronics sales. Target which had been a bright spot for the sector and market in general joins kohl as jcpenney five below and l brands failing to meet holiday expectations. The xrt, the etf tracking the group, down more than 1 to kick off the year. Guy. Yes, zwlier do you think there are cracks in the consumer showing . I dont think its an indictment of the consumer at all. I think in this case one off misses we have have a consumer conversation but i dont think its about target the stock went from 80 to 130 in a Straight Line and finally valuation catching up to walmart compsy disappointing you cant say they were not. They reiterated Fourth Quarter guidance and margins down. Stocks down 6. 5 not a disaster. You dont have to buy it tomorrow but given the run its had i didnt think the day was bad. Karen you owned it. I do. You buying more on the weakness. Im going to buy more i didnt today usually i like to settle it in a wit. I was definitely disappoint the thing guy said they will make the earnings which tells you they were going to beat if they came in on comp store sales. The street was expecting a beat. For them to say we are in the guidance that was disappointing. To what guy said, the margins were good. They sold more of the good margin stuff less of the stuff did the street overreact. Not a ton it lost 1. 5 multiples. It wasnt crazy before i do think its attractive i want to let it settle in a bit. I think its an opportunity. I think they are very different than the jcpenneys, the kohls of the world. They are get going right. Thats why its outperformed. Its oversold but to karens. 3day rule. Let it simmer see where it levels off wait for it to hold the low for that first day and then wait a couple much days after that. I dont know i mean, walmart, best buy maybe you take the weakness as an opportunity to buy those two if they sell off into earnings we have seen the ones that have been weak. I think 5 below got crushed. We have seen the ones there is the oneday bounce. This has been such a favorite this might have to wait a bit longer because there was so much money in it already. The other names youre talking about, there was new money put to work on a discount. There is a lot of money already in target. Yeah, we look at things from a macroperspective i would say that you know target there is a lot they have done to reposition within the retail space amid the disruption. But i think there are ill take the other side of what guy was saying i think there are things to watch in the consumer space. If you think about what drives consumption, lets look at the consumption number if you look at gdp prints that peaked in the summer of 2018 its been slowing. Retail sales have been slowing they are not falling poff a cliff process but people need to note they are slowing. Whats driving the next leg forward. Era we got the payroll print people like but job growth is the slowest since 2011, since the recovery papo and worthless hours. But are jobs growing at a slower pace because the economy is slowing or because we are running out of people if there is nobody needing a job or can get a job you cant have growth. Its a bit of both. We got the beige book out today that said there are a lot of labor shortages. But looking at job openings from the jolt survey. Thats a better indicate are than the job number. With the lag, yes but its come back a bit but its rolled over too jobs are slowing and if you look at the other drivers, credit, access to credit, because if you dont have a job maybe you borrow or pay a credit card. Modestly banks are lending put it together with the overall trend you have to watch it. Here is where i agree with dan who disagreed with me. I think people confused im not suggesting im right but its my opinion. That people confuse the health of the consumer with the ability or want to spend the u. S. Consumer will always spend. We learned that over the years doesnt mean they should be spending when you have an economy thats 73 driven by the consumer, and as long as the Consumer Confidence stays at the levels with the stock market at alltime highs people will spend. The problem is you are in a sweet spot i shouldnt say the problem were in a sweet spot. Unemployment is at record lows or around record lows. Enough people have a job to keep the economy aflet. Appear interests not a lot of headwinds. Now if the market sells off people will equate richness or wealthness, if you will, with the where the stock market is if that comes in hard, then you have a problem with what people perceive as their wealth. You saw that in october or november of last year when the market went down basically 19. 5 in the course of a month and a half Consumer Spending stopped on a dime people look up and say whats going on maybe i shouldnt be going on vacation and buying the store bucks coffee its extraordinarily sensitive in my opinion to the stock market. And we talk about the consumer and we come back to the theme talked about it a lot across the network i know we talked about the xrt at the top near is my beef with the xrt a quiz are you ready . Do you know the highest percentage weighted stock in the xrt . Anybody guesses i will buy them dinner rite aid and clirns place rite aid at 2 . I wanting to to the rth, amazon, home depot are 30 the the lesson is if you bet on the etf know what you own and whats in there. Maybe knows another lesson, if you like five or Six Companies then buy five or Six Companies make your own etf instead of buying Something Else because a lot of the names have only a small percentage of the underlying. Thats my pinpoint. If you own the rth and home depot misses the rest of the stocks did well about you if the heaviest weighted doesnt could well. Target who else might you like. Walmart, also. Heard of them. You know, i dont own amazon. Its come in a fair amount but have to come in more before i own it i like to pick a few and think that i can outperform the 100 mix of 1 each in the xrt. Hopefully i can. Today, no. Tflt definitely not. But you have made a lot on target. Im sure. Well above the dollar average. Definitely. I think there is upside from here and but i will settle in. Cracks in the consumer something to watch, all this data, folks we talk about on cnbc ism manufacturing, could roll back its right at a key team for the economy in the market. Coming up we drill down deeper on oil what the phase one of the energy deal means for the energy patch. Well be here. Later on 75 billion reasons why blackrock is doing just fine thank you very much. And be sure to watch us live and on the go if you want on your phone, on apple tv the cnbc app, download it today. Were back right after this. Sometimes, the pressures of todays world can make it tough to take care of yourself. But natures bounty has innovative ways to help you maintain balance and help keep you active and wellrested. Because hey, tomorrows coming up fast. Natures bounty. Because youre better off healthy. Looking to get your business off to a fast start in the new year . Natures bounty. Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 64. 90 per month. Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. All right. Welcome back to fast money. Lets talk about something we dont talk about maybe enough recently that is gold guy adami. Yes. Up 5 in a month. Up 20 peppers in a year. We talk about this potential, you know, slowdown, whatever why is gold catching such a bid. Its interesting. Today on a day where you would think the trade deal signing would be reacceleration of Global Growth. Maybe that sort of cloud abated. You would gold has a retreat no new month mining up huge that coupled with bond yields going lower. Remember mr. Hammer, that it makes me hmm injury the gold market and the bond market are trying to tell the Broader Market something obviously the s p doesnt care i get it but you have to ask yourself, what is the gold market see that the rest dont. They see central banks. You hit on this a lot too and utilities led today. This was a sell the news even. Phase 2 is probably in trumps words after the election so there is nothing really to keep shorties at bay right now you have a little bit of freedom in case earnings dont perform well you have a it bit of freedom to short the market here. We saw the sell the news event. The 10year yield backing off a bit as well. As i mentioned, the yield curve is flattening a bit. Listen, we talked about it a few days now the warning signs are there. The 20 different moorkt indicators all flashing red. Market dont care. I dont know what that exoxygennous event will be that makes it care. Did you see the deal was so vague i mean phase. Its 94 pages long. I havent had a chance to read it i dont think most of the Market Participants had a chance to read it. Certainly i havent read it in the entirety. But sections of it i think are so vaguethat yes we agree ther is a point we have to discuss in the future and we both agree. It clears the fact that phase one was done it clears. I think we saw the video sort of happening live in the afternoon. Were i think thissing well the optics are good though. Yes the deal itself may not be that are the so of tight but there is hand shakes, smiles, good optics maybe for the market. Steve makes a good point. Its a sell the news event what karen is saying is that the actual meat of the deal, the details people read through opened the door for more tariffs if the u. S. Wanted that route. So its not a seal the deal on no more tariffs as maybe the market expected. I think the point that guy makes, what people should be focused on and see there are a lot of sort of signals flashing red. I think thats what the other markets are tell you stocks dont care. Yet looking at the leadership as guy or steve mentioned, it was defensive today. I think people need to realize, you mentioned ism earlier. 47 you know 46 is generally associated with recessions i talked about you know these other indicators like jobs growth slowing the market doesnt care. But i think this is a momentum driven market. This is one where the people are bullish because the prices are going up thats one where you have did you should be selling a bit into strength, derisking and buying things like gold. Im giving you another number here. I like numbers. 3. 5 . Thats the percent we are away from dow 30,000. I probably jinxed. As the numbers get bigger the percentages get smaller. Is that right. Lets talk about Xpo Logistics, the stock soaring 17 on the news exploring a possible breakup sales or Something Else. Jim cramer sat down with the company ceo and joins us live from San Francisco that was a heck of a graphic, jim Xpo Logistics has been amazing for ten years made the people rich seventh best performer i think in the last decade which do they want to change things well, look, its stuck at the level for a long time. They bought back 35 million shares it had been raided by a short seller incorrectly it came back brad jacobs and a tremendous entrepreneur and he is he can sick of his company being as low as it is anying if he came public again he could get rid of a lot of businesses come in as a Service Company and trade at twice what its sell for. Yeah, it is this is a company do you think its just, jim, that people ignored logistics and freight because they dont understand it, afraid of the trade war. Wall street doesnt get the story . Why dunk its been stuck at the loading dock. I like all those. Its also been fedex cast a pall on the whole group. The short seller was saying things were kosher at the company. I think those were almost 100 lies and the stock really hasnt recovered the way i thought it would. But the important thing is the lgbts business would be fantastic for integrated which is owned by honey well. Zebra technologies would kick the tires. It does a bit what shopify does. They say why doesnt amazon snap them up. Being up just 10 is low bawling. There are divisions embedded as you said are obscured by other divisions that seem like trucking companies, including one that he bought that is not getting any credit at all. You said he was frustrated, jim was he coming in hot, worked up that the street is not getting the story . The Analyst Community is bullish. Brad is a clinical guy. Nothing emotional. I was like hey ha man, im excited you should get fired up. What brad has done, though, is put together that in the last two years has done remarkably and yet the stock has done nothing. I think he is tired of that. He wants to be able to show people what this company is really worth you mentioned that theyve got well the logistics business, you know, i see Research Credit suisse is calling it the google of logistics. Thats not what the stock as multiple says. If you look at what fedex paid for tnt this would be a tnt a second rate operator in europe, a third rate area to do business the full interview tonight on mad. I know tonight is a big show youre out west. Im excited and i know you are, jim, about tomorrow. Is unfair unfair we have katerina lake, brad, of course how excited are you for tomorrow spending the day with Satya Nadella, the trillion dollar man . It hasnt happened since 1986 when you flew out to see steve balmer he has been the Business Manager of harvard crimson when i was the editor in chief. Its been that long since ive been there only met him once. I wanted sit down and interview him what a job he has done i cant wait to get up to seattle which is what im doing in about 35 minutes. Well well lotte you get on the plane. Safe travels were looking forward to tomorrow the guy totally invented the company from steve balmer. He is amazing thank you so much. Safe traflts, jim mad money tonight as well. Kantor that lake at stitch fix and big show with jim at 6 eastern time. Could Satya Nadella be the ceo of decade. Should be if you think about it, ibm people talk about ibm legacy business, the Aircraft Carrier in the middle of the ocean impossible to turn around. But microsoft is the same company and figured it out the knock on ecstatic microsoft that leaves levels if there is a knock at 28 times forward earnings, getting expensive. But you know what, its seemingly growing into that valuation every single quarter. You had a negative headwind we always talk about price is truth on the show. You had a negative headline today. The stock does nothing but go up green on the day popped through a major resistance point was 150. Popped there above 160. Its a Different Company now theyre moving into what they should be moving into and theyre moving aggressively there. Theyre going to where the puck is going to be im staying long. Its dan from a macroperspective not individual equities is there any concern at Richard Bernstein advisers we talked about it on the exchange at 1 00 today. That people are buying the same five or ten stocks the gap in weight on the top ten has never been this high almost not close the worst time was 1999. I think it wouldnt be a worrisome sign if the profit percentage market share was going up process but the problem is Morgan Stanley put out a night that the market cap percentage has been increasing yet the profit percentage has been decreasing. I think thats worrisome and you you havent seen that since the tech bubble. But you are getting its not microsoft specifically but you are getting bullish sent many driving the moves here thats something that is echoed in any sentiment position in the area that you look at its something to watch. The ones that work keep working. Microsoft, facebook, Amazon Google i own some value stocks that nobody wants to own. Doesnt matter its cheap, even though you talk about the increasing valuation on those top five or top ten at the moment. I think the risk reward is getting worse and worse. As a prudent investor what you want to do is anything where the profit dynamics are getting worse you want to sell into strength on those names. And if you want to accumulate buy the ones that starting. I dont want to be guy adami. You dont want to be guy adami. Man speak for yourself. Id love to be guy adami in my next life i dont want to beat a dead horse. But when you buy and sell a etf a lot of people think the yun underlying equities are being somd the only time its actually purchased is when the etf is created appear goes public as itself and then you give the stock to the custodian were trading trillions of dollars a day above the market not reflective they are based on the price but youre trading paper. S in. In a way. I dont want to get weird and wongy. But if they decide microsoft, amazon apple are too expensive. You had an interesting conversation on one of the seven shows you hosted. The sixth best. Right. The inflows into blackrock correct. 75 billion last quarter. Buying passive meaning more money goes to the big names and they keep getting bigger and is that because business is better or simply because they are big and get more money you know the answer. Passive investigative is great when everything is going higher. My concern and i have said for a kwhiel when passive becomes active it aint going to be active on the way down its people getting out. I will tell you from doing this for 30 something years markets go down a lot faster than they go up. When you look at microsoft, though and start to talk about the number, i equate it to the apple is with the Services Income when you look at how many billions they are making and closing the gap between hardware and the Service Income look at microsoft, the personal computing as a segment of revenue is 45 billion. But looking at intelligent cloud, youre looking at a number here thats 39 billion when you say how long can it go . Migranting to a different area but the margins are sust