They do things for noneconomic reasons. Somebody said in europe, they dont care about theyre going to keep europe together. The u. S. , i think entitlement reform is serious. I think they have a couple weeks to work this out. Barry, thank you so much. Its been a pleasure talking to you today. Thank you. That does it for us today. Make sure you join us tomorrow. Right now its time for squawk on the street. Good morning. Welcome to squawk on the street. Im melissa lee, along with carl quintanilla, jim cramer and david faber at the New York Stock Exchange. The new home price reports were just released. S ps David Blitzer will join us to break these numbers down moments from now. Lets get a check on futures. And how we are setting up, this after the s p ended its eightday rally. It managed to hold above the 1,500 mark in yesterdays session. The dow looking to lose about nine. Confidence numbers are on tap at 10 00. Italian field auction, selling bills at the lowest yields since march 2010. We have mostly red arrows across the board in europe. Asia, big day for shanghai which officially enters bull market territory. Road map here starts with apple. The pressure mounts for the company to launch a new omg product. App announces that its fourth generation ipad is on its way with 128 gigs, with a starting price of 799. Surge revenue topping expectations. Honeymoon continues for mersa myer. We look ahead to amazon tonight. The f series pickups in north america, the losses will be deeper in europe this year. The conference is getting under way as we speak. Apple announcing 128 gigabyte version of the fourthgeneration ipad. The company says the tablet will have twice the Storage Capacity of the 64 gig models to hold more content including photos, books, and tv shows. The new version will be available starting a week from today. The wifi model pricing at 799. The wifiplus model also. New product. Yeah. Evolutionary product. That speaks volumes. This is the only thing theyve got . Look, i think its great. They have a new product. Ge probably has some new products. I think that phillips got out of the new products today. Thats not what im looking for. Im looking for new dividends, new buybacks, acquisitions. Im looking for something that is not incremental. Maybe you want to go get a new one, i dont know. A lot of people wondering why you would need 128 gigs. A lot of memory, wow. They point out there are a lot of companies that use it for autocad, if youre doing xrays, where youre going to need a lot of industrial usage. And that means storage. Anything that makes the desktop less relevant is big. Incrementally. Its an incremental positive. And a stock that doesnt need an incremental positive. Its always to big incremental positives. If you look at the company today, they say, had is fabulous, this is what matters. Its going to help people win Football Games is what it says here. Did you see down to this bottom line . Its winning Football Games. Ipad running our game plan solution unquestionably helps players to be as prepared as possible. I changed my mind. Im going to tell you, 495, 500, didnt expect to see that in the press release, that it would be a big tool for football players. You dont see those thick notebooks on the sidelines anymore. No, you dont. Same in airplane cockpits. No more thick manuals. Is this a dollar enks per share . This will take film study of football to a new level. They could order maybe 300 of these. They could. Maybe 350. That will really move the needle on apple. Look, heres the the stock for 650, going to 680. People would say, this is the breakout. This is going to cause the 200day. Golding cross. This is nothing, henry bird. In flames over new jersey. This is the golden cross. How dare you get in the way of apple going to 705. Average price target, by the way, is 617. I think i saw this morning. What a change. 740 just one month ago, if you can believe that. More positively, carter worth and bob were saying its time to sell the markets overall and buy apple. Because apple has made a round trip from a full year ago. Its closed that entire gap. You can buy apple at levels, if you missed the whole rally, missed everything for the past year, you buy it now. And it finds some stability. Its inexpensive. It sells at eight times earnings. I can make an Investment Case for it. Its just not what people want. They want more than an investment. And its a cash. They want something so exciting, they want how many pixels . They want this to be enough to be able to build a Nuclear Power plant. Right . They want to press a power button and you have a Nuclear Power plant. Thats not in here. Thats a 2014 story. Its inexpensive. As soon as you say that, everyone says it was inexpensive all the way down. Inexpensive is one thing. Trading through microsoft and intel is wrong. Yeah. Speaking of things that arguably are more exciting, yahoo shares up in the premarket. The Internet Company first full quarter under marissa mayor, 32 cents for the quarter. Full year revenue projection above consensus as well. Amazon due out tonight after the bell. In a disclosure, cnbc and yahoo have a coproduce for content. Many people talk about mayors honeymoon period. And then the question, how do you preserve the core business, david, but roll out new products that are new and different . She is focused and could make that a point on the Conference Call, to display part of the business coming in. Theyre not viewed as often or by as many people as they were in terms of their websites, whether it be sports or finance. Thats the challenge as it is for so many of the other companies we talked to, whether it be google and facebook. Google in contrast has revenues up over, what, 20 . This company did have a positive revenue number, up 2 , i believe it was. But it does put it in some perspective. Nonetheless, she probably gets a quarter or two more, as some would say, as a result of at least showing things arent getting worse. I liked this call. A lot of people who have dealt with yahoo over the years are used to incredible turnover. Say, oh, its a different person, its a different person. Whos doing finance, whos doing sports, whos doing news. Its always different. This is about attracting the right people. Google is the new golden. When you get out of school, youre trying to get a job at google and you cant. Because theres 50 Million People who want to. Yahoo make you want to work there. I liked this call, there was energy, its no longer, its as bad as it used to be. They didnt mind paying the taxes. They are buying back stock. What a good call. All true. Its an interesting point you make, one that we perhaps dont focus enough on, in creating enthusiasm amongst your own Employee Base in order to attract talent, in order to keep talent. She seems to be having success at doing that. She has charisma. It is about free Cafeteria Food and issuing iphones to employees. Its important when its a turnaround story and there has to be one or two more quarters for the results to be seen. Thats a great point you made, because these are needed expectations, the fact that they beat, and they show the business lines werent doing much worse. But revenues were better than consensus. It was a stability quarter. They bought back a lot of stock, because its extremely investment friendly. A number of directors on the board will be focused on that. Dan loeb is still in there. Probably will be for some time. And has done very well with it. That helps also. He was key in terms of at least the appointment of mayer to the job. But look, theres so many things that could go right here. And one of the things she makes the point of is, 200 million. She keeps talking about the 200 million users. People never left yahoo . You could say theyre hibernating in it. But i felt after this call, momentum is coming. And i want to stay at yahoo if im working at yahoo . My resume is finally out. And they want to bring out the best people. Good people on the board. And thats about the core business. Many investors still looking at some of the parts. Whats the valuation going to be. When it comes to yahoo japan, that has gone up sharply. But the yen has fallen sharply, so that may wash out and not be a loss. But there are significant sums from both of those investments that have yet to be potentially realized. Good quarter. The stock is up this morning. Ford reporting better than expected Fourth Quarter earnings at 31 cents a share, boosted by the north american operations. Widening its european loss estimate to 2 billion reflecting fords weak Sales Outlook for the region. How did you parse this out . Ford has also been on a tremendous run. I know. Take a look at the reverse leverage in europe. When things go bad, things go bad. Youre talking about 11. 4 decline, operating margin, talking about same amount of loss in ford. Even though theyre cutting back furiously. It was a downer handout. And it was a shame, because the u. S. Is strong. Latin is strong. Asia is turning. But europe is just horrendous. And theres the added pressure ofhe japanese automakers having the advantage of the weakened yen. Toyota back on top. The government is going to have to speak out on this, our government. A lot of the lobbying groups of the automakers, we had former missouri governor roy blunt on fast last night and hes the head of one of these lobbying groups saying, president obama, youve got to do something. They cannot keep weakening the currency. Its basically providing a subsidy for the japanese agencies. Europe will do something. Theyre protectionists. All that said, highest pretax income for the company in ten years. More suvs, the big fat margin products selling here in the states. Carl, youre right. Dont want to lose sight of the fact theyre hiring in the u. S. Business is strong in the u. S. Theyre cutting back for europe rather dramatically. There will come a moment where there will be a positive leverage in europe. Dow jones pointed out no, up 46,000 hourly employees of profit sharing. 8 grand each. Nice stimulus. Always worth pointing out this was one of the automakers that did not file for bankruptcy. 5 a day, remember that . Henry fords wage plan . Do you think the stock is trading lower on the back of the wider european losses, some of the weakness in europe . Or do you think its the fact that earlier this month it hit the highest levels since may of 2011 . Maybe now its taking profits . I thought they would lower the loss of 2013 in europe. I thought that for sure they were a little further ahead than they are. I dont know what it means for gm. I want to see, because gm is supposed to be behind ford in turning europe into a loss. I was disappointed. I guess i didnt see it coming. I thought that ford could break it down. When we come back, the winners and losers in this mornings s p case, schiller, home price report. Also ahead, agrium strikes back. A live interview with ceo Michael Wilson later in the show. A day when 25 S P Companies are reporting, with amazon, of course, the head of the ticket tonight. Lot more squawk on the street back in a minute. Lets get baek to the key housing data out this morning. Schiller reports showing u. S. Home prices continue to rise through november of last year. The tencity composite up 5. 4 . Here on cnbc, David Blitzer, chairman of the s p 500 index committee, whos going to help ring the bell today, for a different reason. 20 years on the spider. 20 years in the spider. It shows what a good index and great etf can do. Far and away one of the largest funds anywhere in the world. In terms of the home prices, not bad for the dead of winter. You make the point even though winters not a seasonally strong time for sales, prices okay. Thats right. If one looks at the seasonally adjusted figures or 12month figures, home prices continue to appreciate even though november is clearly into the winter months. So theres a lot of momentum. It shows up in all the housing statistics, not just the prices. And as far as i can see is going to carry well into the new year. Its not going away. Because shiller writes this piece over the weekend, which im sure you saw coming, saying he is a little more agnostic on using the data to predict what the rest of the year will look like. You seem a little more bullish than that. I think so. We had an interesting discussion yesterday. Trip and myself. Trip is always an optimist. Bob is certainly not a great optimist. If you think were going back to 2005 and everything goes up 25 , 30 a year, think again. If you think youre going to see those kind of peaks from some of those cities anytime in the next 10, 20 years, think again. But if you think housing will do its bit for the economy, well appreciate a little bit better inflation in the loaning run. Thats where we are and that should be good. Yesterday we saw the tenyear yield cross 2 for the First Time Since april. Will rising Mortgage Rates help people get off the sidelines in your view . I think a little bit. But looking back over a long time, consumers taking down mortgages are much sharper than the bank. When rates are rising, or about to peak, they always go to the variable rate loans because they can average down. And, you know, and when they shook take the fixed rate loans, they always seem to do that. The bankers get a run. David, yesterday, the senates talking about immigration reform. Maybe 11 Million People who are undocumented go documented. We know that in 2005, 2006, there were a lot of people who did not have documents who were buying homes. Could that be a longterm tailwind if we get longterm immigration in this country . Some of those people might be living someplace in the United States right now. But if they all go out and buy houses in the next ten years, if you add 1 Million People a year, thats a lot of houses. I want to come back to, are we approaching what would have been a more normalized Housing Market than the one we saw prior to the incredible bubble of the early 2000s, where hpa was up 3 a year for decades . I think were getting back to it. But were not there yet. You know, Housing Starts almost got to 1 million in december. And nobody builds a house in december anyhow. So that doesnt count. You have to get over 1 million to have a Housing Market. You still have a couple of cities where homes cost the same thing they did 12, 13 years ago. So were not that were not there yet, but were definitely headed in that direction. Finally, new york, the only se seasonally adjusted thats negative. Whats going on . I think there are a couple of things. They both go back to financial services. Financial services is a big part of the new york metro economy. Its not as big a part as some people would like to have it. On the other hand, hes got a strange seasonal. A lot of people wait to get their bonuses to buy a house. So if you want to see home prices go up, you know, hope for big bonuses in new york this year. Mega homes. Yes. David, thanks so much. See you on the opening. Thank you. Should you find a home in yourfolioportfolio . Betting on social media, well talk with one of the First Investors in facebook. The stock off to a flying start this year. Lets take a look at futures as we ended our eightday winning streak on the s p 500. How do traders using Technical Analysis streamline their process . 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They give their talk and everybody says, okay, and the first question is, like, and then all the management does is, oh, um, and it says in the transcript it says, um, um, um. Its like, wow. This was a guy down in the first half that took your breath away. It was literally one of these stocks where it was flying coming into the quarter. It was so discouraging, that the analysts were boxed in. And they had to downgrade. Theres even a question now about whether the cloud is still growing. Now, i think theres an overreaction. Does this make sense to you . I think its an overreaction. This has been the growth big data play, the gross cloud play. Youre going to see every cloud play trade down off this. And i wonder whether they werent being too conservative. But i was listening and said, oh, my, oh, my, here goes emc, here goes the complex, here goes the sales force. Boom. Implications for amazon tonight . Or no . One could