Fomc meeting has a bias thats phenomenal. Theres a regional fed study that indicates that Something Like 50 to 70 of all the gains in the stock market could be had if you just added up these days. Theres some discussion of what investors would like to see in the fed statement this week. Whether they need the fed to show support to the markets. Whether they need to back away from the mention of increases in september. Does any of that need to happen for the market to stay positive . The feds will be a little obstinate about things. At least theyre carefully monitoring whats going on elsewhere and that they remain data dependent and theyre going to wait for the thing to build up so that will give us a little bit of space. How much of this has to do with the fact that crude seems to be behaving. Is that allowing people to kind of look beyond that at other things . Does that mean that we should pay even closer attention to earnings this week . Of course we have apple on tap after the close. That those sorts of things will matter . I think apple will be very very important and people will look to see if it appears theyre either losing momentum apple is in a position as the Biggest Company in the world theyre still a product by Product Company and they have to make it work. Whatever they bring out. Apple is almost like an asset class in and of itself, mike. It is. Its also not in my opinion, at least by some of the evidence, it kind of operates on its own kind of mini economy and i dont think its going to tell us tremendously about anything much more than how apple has navigated this period and how investors are willing to receive it now that the stock has been underperforming for awhile. To your point about earnings when crude oil behaves and its stable it frees everybody up to look at more Company Specific stuff. Credit firms and today youre seeing the Old Industrial companies actually get a little bit of a good reception. 3m. Some of the other industries. Johnson johnson driving the dow. Thats one of those things, it gives a green light for us to look at the other things including apple later on. We did get data this morning art and i want to ask you specifically about the service sector. It was positive and above 50 and better than we saw before but they did suggest that spending capex and energy were going to start eating away. Was that something we need to start worrying about . It can be a problem. The number we got from the fed yesterday was a disaster but that is indicative of problems in the fracking area and the petrol system so i think were here. Theres an outside chance that you may be seeing a real reversal in oil. Well give it a couple of more days and if thats the case then we may get a rally from our oversold conditions. That could take us into february and see where we go from there. This is a political season that were entering into. Looking at iowa, looking at new hampshire. Anything investors should be thinking about and how that tends to effect the markets or not in a year like this . What youre seeing here is in the early stages, things like drug pricing and major areas that could come under on a full sense of how any of the candidates would handle the entire economy i dont think they have given us enough quite yet. So i would watch item by item industry by industry. And i was just going to say, its really hard to quantify but just the idea that the race is so seemingly wide open and basically both parties have these big challenges right down to the end and historically these years when you have no incumbent running, at least theres an extra wildcard but to arts point its early i think for the market to start to really handicap this. Its going to make the next few months very interesting as some of the rhetoric starts getting firmed up but for investors so far this year, art, pretty much no asset class has paid off for investors. We heard from jeffrey, i want to play you this sound bite. Heres what he told cnbc. What are these people doing is the question you have to ask yourself and at least to an investment environment which is nonproductive, how many people in this room made 10 on their combined investment portfolio last year . Probably not very many. Most people made zero or negative last year and the fed seems intent on continuing this low return environment. Of course he said what are these people doing . Hes talking about the fed. You have him. Saying when you see the declines that would tell you maybe a recession is on the horizon. Why are bears so loud right now . Because im kind of in the camp of the fed may have made a policy mistake and you have heard me say before i think well be back at zero before we get to 1 . But they will have to be dragged yelling and screaming into any changes and thats why i think they will be some what like that tomorrow. Theyll fight what they think is their credibility but i dont think well see any rate hikes. Even if history doesnt show it was an outright mistake. It was a very unusual set up for the first fed increase in the cycle. You had profits late in the cycle and turning down. You had just in general the cycles run for so long and asset prices got far along that you knew there was probably going to be a little bit of an unsettled reaction no matter what. And the Manufacturing Sector was in a recession already. And now could Services Follow it . I hope not but theres always that risk. For now the market is very selfabsorbed. It has that prefomc bias and its going to keep it. Today will be a good day and we should be okay right up until the statement tomorrow. So we know the bias for today is good but youve said 1889 is a trap door for the s p. What level should we be watching . Well, there is resistance up around 1907. 1911. They might have a difficult time getting through there. If you reverse, i would again watch 1889, give it a second try even though we broke it yesterday. Art and his crystal ball. Great to see you. Coming up, a massive day for tech earnings. Well, mostly because of apple which is set to report after the bell. Well tell you what to expect and what to look for. Plus the future of twitter and the next stop for kick costolo. Hes going to join us live later on this hour. And the markets in rally mode. Right now the dow up more than 250 points. The nasdaq up just shy of a percent. Were back in just a moment. Apple set to report earnings after the bell today. Investors will be paying close attention to the iphone with sales expected to show minimal growth for the first time in history. Josh is live outside apples headquaters with more on what to expect. Josh. Weve been getting indications of iphone weakness for weeks and you have seen a number of big apple supply chain partners talking about Current Quarter weakness and thats why financial analysts that cover apple you see them cutting estimates for iphone demand. Hes looking for march quarter iphone units of 55 million. That would be a drop of about 10 . Now if thats the case, he tells me that bad news is priced in at these levels and then some. You have a stock thats been under real pressure now down some 20 in the past six months. Bulls argue though that the iphone franchise is solid. That there are new products in the pipeline including the iphone 7 and that valuation is very attractive at these levels with apple now trading at historically low pe ratios. Of course cheap can get cheaper. The near term risk for apple is that weakness in iphone demand is worse than what wall street anticipates. Were going to soon find out. Guys back to you. Thanks so much josh lipton. Shares of apples are still hovering around that 100 per share. Down for the year. Weve seen the corelary. Are the signs going to be baked into this quarter . Most of it is baked in. The question is what people see several months ahead. So i do think right now it would have to be a really bad fumbled quarter to react too much negatively but the market told you net income wise take away the buy backs its been a very slow Growth Company since 2012. The buy backs have covered that up and its been a smart use of cash but its not necessarily and its the First Physical quarter. They do. Right now their second fiscal quarter. But this is what theyre reporting . Yeah. Theyre about to report their first fiscal quarter. What boggles my mind is how little faith people have in apple. Like no other company theyre consistent in bringing out well crafted products and software backing them and maintaining high margins. But you look at the chart and its all over the place. People are like oh my goodness. Id love to have apple at 100 when its at 130. But then at 100 its going to go to 80. Cant touch it. This is one of the companies you dont have to worry about it going away or completely stumbling. They have cash in the bank. They have room to fumble. The question is whether or not they do. Well see. Lets bring in another voice to this conversation. Its funny to hear people say its the Largest Company in the world. Of course the franchise is intact but now were asking the question by how much will iphone sales have slumped in this quarter . What are you saying . Yeah, you know what, i think the mistake we end up making is we end uptaking one or two quarters data points and extrapolating them to eternity. Thats what people did last year when there were positive data points and had a very bullish view on the company. And right now were seeing year over year declines in iphone units in the march quarter, probably flattish shipments for the quarter but if you take a step back and look at the Bigger Picture the franchises are still intact. People are still buying a new iphone every 2. 5 years or 3 years and buying other am products. So youre saying the march quarter is the trough for iphone sales . And if thats the case is that going to be the trough for the stock . It could very well be. And otherwise as we get into second half of this calendar year we think the stock should start resuming its upward journey from here. A couple of things that im looking at i want your thoughts. In a shortterm inventory seems to be particularly important. Over the past couple of years they have been supply constrained during the Holiday Quarter. I want to see if theyre exiting the Holiday Quarter within their target range of 5 to 7 weeks of inventory and it will color their guidance and longer term they seem to be evening out the spikes and product spikes in sales the way theyre doing this iphone upgrade program. How quickly do they expect to move that to the web and not just store only . Are those things that youre going to be looking at as well . Absolutely. I think the program theres a lot of things. We dont know if people are actually taking it or not. Well get the data points over the next few quarters and thats one positive and the other factor over there is clearly as apple is trying to garner as you mention, smooth out its product cycle and do a mid cycle that helps on the unit shipment side. So i think theres a lot they can do. They have a really solid franchise which is what we are banking on for the stock to turn. And is there anything else outside of iphone that you think is going to capture investors attention at least in the coming quarters here . The other products they added . Pretty good reception but nothing that overtook all the attention on iphone . Iphone is the biggest category we need to Pay Attention to. Its the largest revenue driver and profit driver for the company and thats where they drive the stickiness with the customer as well. Yes watch and some of the other products makes sense but theyre not driving the numbers yet. What is interesting to me too is that apple is more like a Domestic Company in china. Theyre opening up their 33rd retail store there. They actually have a big chinese work force not just contracting but actually working for them at retail. Could that make a difference in their growth trajectory in that company im sorry in that country which is having some trouble business purchasing wise but where the consumer still seems to be spending . That is a concern and thats been china gives, what, 25 of the revenues which includes taiwan and hong kong as well but Mainland China is still a big part of it and if the economy continues to slow over there that can have an impact on their growth rate. Thats probably why theyre looking at other markets outside of china where they can invest more and get more returns on those markets. If the street doesnt get the numbers that it wants consensus right now. 323 per share revenues of 76. 5 billion. How quickly does the conversation then turn to apples Massive Capital Return Program that they usually update in april . Yeah as we move into the april, the march quarter end, the conversation is going to move toward the capital return and well get some update this april as well. And at this point a little bit of a miss is baked in. December numbers and down for the march numbers seems to be baked into the stock. Its worth noting you have 120 price target on the stock so you expect at least a little bit of upside from here. We appreciate your time this morning. Up next, make sure you stay tuned to squawk alley. Former twitter Ceo Dick Costolo will join us live talking twitter and his next big move coming up later on. One eye on the markets. Dow up 252 points. Its best day since early december but well be watching the next thing that could be leading the markets and thats the european close. Its happening in just a few minutes. Stay tuned. Amazon studios coughing up 10 million to outbid traditional Hollywood Studios for the distribution rights of manchester by the sea. Amazon acquired four films at sun dance so far. Netflix also a big buyer at the festival purchasing three films. A lot of traditional distributors havent picked up anything yet. Meantime a new report shows just how broad amazons reach is becoming. According to Consumer Intelligence Research partners there were 54 million amazon prime members at the end of 2015. Thats about one in every five adults and the triangulation of amazon here, giving away when youre a prime member certain Digital Assets but realizing based on their great data how much more likely that makes you to take advantage of that two day Free Shipping and keep buying, it is amazing to see the growth and to see the money coming out of my wallet as i buy more stuff. Without a doubt. And also the presence at sun dance is fascinating because their economics are perfect for that. They can take advantage of content that appeals because its that extra bit of stickiness for small groups that they can target better than anybody else. Small groups is the keyword though because i mean when you think about the Traditional Networks they have to have such broad mass appeal that a lot of the sun dance films wouldnt work on those platforms. Thats exactly the disagreement were having. And its exactly. The one point about that Consumer Intelligence Research partners report, its 1 in 5 adults but thats about half of u. S. Households because the households are of course more than one person which is insane. Yeah. Doesnt count with people piggy backing either. Always great to have you. You can talk intelligently about anything. I try. This may sound like a movie but it, in fact, is real life. Nasa is building its most powerful rocket ever and its hired boeing for some help. Jane wells is live in l. A. With more. Hey, kayla. We want to get to mars for real. Not in a Motion Picture but its so big and so expensive nasa doesnt think its going to be able to ride on someone elses market. Theres no other commercial market for a private company to make such an investment. It designs its own rocket. The space lunch system sls which is going to cost taxpayers billions of dollars. The rockets first test flight is planned for 2018 and by 2021 it will take astronauts to the dark side of the moon. Further than we have ever gone before. The plan is to get to mars and while its nasas rocket the core is being built by boeing. What youre looking at is the largest welding system in the world. We got a sneak peek inside this facility outside where nasa is welding a rocket together vertically with a special season. It cig any cantly cuts down on weight which is important. Boeing is getting much of the 2 billion Congress Approved just this year for the program. Its also helping build new towers in huntsville to test the core fuel tanks to failure to find their limits. Boeing is also using Old Technology to the Shuttle Program like engines and solid fuel rocket boosters but isnt that looking backward . Theres a place for new things. Theres also a place for proven reliable things and things that we havent had. Why reinvent the wheel if the wheel works. Now nasa is benefitting from renewed interest in space. Congress gave the space agency this year more than it asked for but it is up to boeing to make sure that the sls performs and its delivered on time and on budget and that support for the program will last the next 20 year which is is how long its probably going to take to get someone to mars. We have a whole lot more on this amazing powerful piece of equipment being built coming up on cnbc. Com. Back to you. Great. Coming up the next act for former twitter ceo dick costelo. Hes going to join us live in a moment. Still watching the market with stocks in rally mode. Maybe a little bit off the highs. Were under 250 point gain on the dow but still strong. The next catalyst for todays market is the close in europe. Well bring that to you live when we come right back. Here at the Td Ameritrade trader group, they work all the time. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. Meeting with pope francis and the vatican as part of his historic tour.