With u. P. S. The stock going to take a hit this morning after lowering their Fourth Quarter guide ax, a hangover from the Holiday Shipping fiasco. And shares of intel are sliding after Fourth Quarter earnings missed estimates and warning of flat revenues for the rest of this year. And speaking of earnings Morgan Stanley, General Electric, and amex making big moves today, well break them down with you. But first up, u. P. S. , the Package DeliveryCompany ExpectsFourth Quarter earnings of 1. 25, well below forecasts. U. P. S. Said its been negatively impacted by higher costs driven by a surge of shipments during the Holiday Season. The company said it deployed 30,000 more temporary employees than it had planned for. Their peak delivery day volume up 7 1 2 from what they expected. As i just said on twitter, their models, jim, nowhere near on plan. I want everyone to go to u. P. S. Kicks off peak week they put out a press release. December 16th, 2013. Where they said, look, our peak day, all right, is they go through everything about whats supposed to happen. Im just going to read it. Driven by the growth in commerce u. P. S. Expects to pick up more than 34 million packages today monday 16th, and its a record for a single day. Wrong i mean, they got it and not only that, but they said theyd have to hire 55,000 people. I think there were a couple of things at work here. They did offer if you sent something december 23rd, they promised to get it to you christmas if you do air service. They promised and theyre a very Honest Company and they delivered. They just didnt understand, remember, this day that they obviously did not know about was december 23rd. 31 million packages. I mean, here you its supposed to be the 16th. Its 34 million. Yeah. You get people to work on the 23rd, 24th, you may have to pay them extra money. This is a logistics company. And they didnt handle their own logistics very well. You said it. Yes. You set me up to say it. Thank you. Youre welcome. Yeah. I mean, your point about the overtime, the sg a. Man. The immediate brushback as well, you got a problem, you got too much business, how is that bad for the quarter . Its a high quality problem to be able to have all this business. Its part of the whole thing. But you read its the same story. And its well above what they had anticipated in terms of volume. Right. All you think about is amazon and the mall traffic story that weve been talking about for some time now. Front page of the journal. Front page of the journal today. You go to the mall with your hand held device and you look at it and the compare it with your handheld device to what amazon has. You realize you can send it december 23rd and u. P. S. Still guarantees it and they are part and parcel with this theyll never make this mistake again, with this change in the way people shop. And i think its just happen i remember when Howard Schultz sent me that note two mondays, listen, jim, theres been a sea change, a secular wow. Really came together with this note being the second to last shoe to drop when amazon reports its quarter thats going to be very interesting. Is there any coincidence here that amazon prime is twoday guaranteed delivery. Thats exactly right. Thats where im going. Thats exactly right. This is a disaster for the malls not for u. P. S. U. P. S. Will figure it out. They wont get it wrong again. Amazon always gives us very little information. Right. Less than any company, frankly, but they did put that press release out after christmas talking about all the new prime memberships that they added. Think about it, u. P. S. Says theyll need 55,000 seasonal employees. More than would fit into yankee stadium. I think theyve got the wrong stadium. They need enough employees to do one of those brazilian world cup stadiums. Michigan. Wolverines. The big house they needed the big house 55 in terms of they needed 85. To be off by 30,000 people on the eve of christmas is rather shocking. But im sure i know there were people who didnt get their packages. Scott davis is a very good ceo, so it is not like these guys are a bunch of jokers. This is a very wellrun company, extremely well run. Amazon sends their packages as well as many other ecommerce businesses through usps and fedex. Did fedex have a different model . Maybe they saw it coming more. To be as wrong as to be on december 16th to be so wrong is not unusual for all the malls that were hearing that were wrong, for all the stores. Everyone was wrong about the behavior of the American Consumer. Yeah. And the journal did some nice forensics about where the logjams were, largely at some of their kentucky hubs, your point about getting someone to work on december 23rd in a hurry is going to cost you. Those of us who when we started out in our career had to work certain days. Well, they even had to give us and we had no clout at all with our employers but they still had to give us extra. Remember this idea u. P. S. Nextday air shipped monday 23rd for tuesday december 24th, thats what people did i mean, thats what they did this we ares highest delivery day occurred six days later than was expected i mean, you how could they be so wrong and the answer is that america changed. We changed. In one season. We changed. Maybe a quarterly phenomenon for u. P. S. In terms of figuring that out, but the real question is retail, brick and mortar retail, in the mall or not, how is it going to change to compete with what we are starting to believe is not just a seasonal change or something but something thats going to be with us for good. Right, this is price control because of your handheld. Its the consumer getting much smarter. I can buy it here. Its the new frugality, im not going to pay it. I can go and do you remember when you used to have to go to circuit city, talk about a name of the past, and bring in the ad of another retailer and they guaranteed the ad. That is happening in real time with your cell phone. Right. And a lot of people are not even bothering to make the trip. Lets talk, by the way, on the subject of mobile, good time to talk about intel which reported its Fourth Quarter earnings of 51 cents a share. That was one cent shy of what had been street forecast. Revenues did exceed consensus. The chip maker, though, said it expects sales to be flat the current fiscal year. Of course, intel a company that still is focused on the personal computer trying to catch up in this new mobile environment. Right. Whether it be, of course, phones or tablets getting their chips in there is the key. And we had the too much love scenario. Remember, we had upgrade, upgrade, upgrade. You said that. Too much love. You said too much love the other day. And he questioned whether you could have too much love. I did. You were existential with me and i was really speaking of upgrades and you were thinking more about a global i was thinking, right, more about the beatles and john lennon. They finally did it, intel finally underpromised. I saw the headline. I said, oh, flat, thank you. How many times ive been on the call with intel when they said its going to be fabulous this time they didnt say it. So, this years now set up for a good year. A big point of some of the upgrades earlier in the week is that the guidance would get more real listy, jpmorgan on tuesday upped it to an overweight, but some were looking for some signs that maybe there would be pc stabilizati stabilization. That wasnt there as much. The ceo did everything, the cfo, they did exactly what you want, which is to say, you know, i mean, this year is not going to be that great a year. If you go back and look at the First Quarter and Fourth Quarter of last year, what they did was they had this were all going to be backended, its going to be great, and all the analysts were, like, are you kidding me . How are you going to do that . They said dont worry about it, well get it done. They didnt. This is the opposite, new ceo comes and says, listen, well not get it done, when they do get it done and i believe they will because of the end of the decline of pc. You do believe theyll get it done, you think thats an important point. Yes. Why . Why . Because they are setting the bar so low that they can get it done and theyre doing a lot of different chips and things. Check out sky works, they had the right combination, David Aldridge really an unbelievable chief executive, ceo, he had the notebook and the tablet and the. C, and intel is getting more religious about having to be more secular about their different what they back, not parochial anymore. Lets get the other big names in the ablock, Morgan Stanley had earnings out as well and Beat Estimates in the Fourth Quarter by 50 cents a share and as for two dow components General Electric earned 54 cents in q4 and that matched and amex missed by a penny last night posting a quarterly profit of 1. 25. And Morgan Stanley not as bad as the others weve seen. Morgan stanley is why you dont trade, you get the Conference Call and its very clear theres a lot of charges, its really fabulous. They did everything right and the stock goes right back up. Morgan stanley the reason why i think this stock is up when you read the conference and you go through the Conference Call and go through the release, its, like, a real bank. It just kind of didnt have this and that and craziness. Its were a wealth were a Wealth Management company and we had good Wealth Management numbers, gorman has simplified Morgan Stanley. I no longer worry that they own a casino in atlantic city. They seemed to have gotten away from that, david, wouldnt you say that . Listen, he made the big decision to move that company focused more on Wealth Management, but it doesnt mean Investment Banking isnt still important. No. In fact, they had a good quarter there. They did. They did. Hes put a Strategic Review out for all to read as well, a strategic update, i should say and they are talking about increasing Wealth Management margins by 22 to 25 , 18 currently. Thats a very big goal. Thats a big goal. Hes setting fairly big goals out there return on equity more than 10 and fixed income and commodities. A lot of Different Things that theyre focused on doing. He has managed to turn that company to a certain extent and the stock has obviously reflected that up, what, 18 last year. A fresh fouryear high. Above tangible book value. And then ge 53 cents. They beat by a penny in six of the previous eight quarters but this time they match operating net up 20 . Ges a transition quarter. A guy who actually came out recently and downgraded buy to a hold is a very good call, my Charitable Trust owns ge, my take on ge is simple, this is not when theyre going to blow it out. They never said theyd blow it out, they didnt blow it out. Your Industrial Sales were very, very good. I like the segments but it was not a blowout quarter. The stocks a buy. When we come back the last key economic report before the bell and Industrial Production in a few moments and an atm that lets you convert your dollars into bitcoin. Heres futures. Welcome back to squawk on the street. We have the summer Industrial Production up 0. 3 of 1 . Capacity utilization, buckle up on this one, 79. 2. 79. 2 is the best number going back to may of 2008. May of 2008. So, we want to pay close attention to that and we still have more data to come in the form of university of michigan preliminary january confidence and jolts. And, carl, its all yours. All right, rick, thank you very much, Rick Santelli. Target officials will be headed to capitol hill in a few weeks. The retailer has agreed to testify before congress on the massive data breach that has affected tens of millions of customers. A house commerce subcommittee will hear testimony from one or more target officials sometime in early february, comes a day after Nieman Marcus apologizes for this and this report by a committee suggesting there are others that we do not know about yet but that we probably will soon. I had lifelock on last time. Lifelock does not do this kind of work. Experian got the contract with target. Listen, there are big ones still to come. Theres some big ones still to come that we dont know about yet. Really . Yes. He was very pointed about that. Yeah, the chatter is theres still big ones yet to come. Incredible how antiquated our infrastructure is so to speak. There are many parts of the world, certainly europe, where theyre far ahead of us is that true . The security of credit cards, the simple idea of just, you know, you are waving that card away and they can take stuff right from it. And the debit question. Some of the reporting on the particular target hack, discovered that some of the code that was used to hack target was written in russian which makes the story a little bit more interesting. On the today show this morning and investigators said theyd never seen anything like it. We have to get used to this kind of thing. During the height of the dotcom period, Companies Reported the amazing page views and what the russian page view generators. Oh, yeah, sure. Listen, the criminal gangs out of Eastern Europe are well known to participate in this, although weve had a couple of guests on that said the sophistication of these attacks would lead them to believe its not from there. Well see. We all know, of course, the continued war that is going on between this country and china when it comes to cyberespionage. Not to mention what our own nsa is capable of, they are not stealing peoples credit cards one would assume, but they can do pretty much what they want. In taken 3 when they say good luck to liam neeson, they win. He did not find them. He did not kill them. And hes a tough guy as we know. Thats true. Later on this morning the president is due to give details on an overhaul on the controversial nsa program, one that collects vast amounts of telephone call data on americans and those outside the u. S. , scheduled to speak at the Justice Department 11 00 a. M. Eastern time. The general thinking hell bring out some measures to at least evaluate surveillance not just on americans but on foreign leaders too which we know has gotten him in hot political water around the world. There have been companies that have been doing business with airbus. Ive been saying theyre throwing the business to airbus because of this stuff rather than going to boeing. I mean, this is a National Issue of commerce, too. It becomes an important thing when at t and vodafone, im just talking about the rumors that have been out there for some time, that deal, by the way, between vodafone and verizon close to closing and well see whether at t does proceed in some way to acquire vodafone, whether that happens, dont make light of the nsa situation and how it figures into regulators decisions in europe about treating at t. Its important. And it could be a real impediment if they do want to move ahead with that. Im glad you said that, because i think its one of those issues american are almost inured to the notion that everybody seems to know everything. When you spy on world leaders, i mean, were, like, you know, were, like, the russians in the cold war. I mean, people dont take that. They dont take to that. No. These leaders of europe. Whats interesting is the speech today falls on the anniversary of eisenhowers military Industrial Complex warning back in 1961. A bit of irony that some have pointed out today, right . Great speech. Yeah. Changed the way we think about didnt really heed that warning, though, did we . No. That is a great speech when you look back. Eisenhower totally underrated, really saw it. He was a five star general. He was not afraid of the military and the military did not boss him around and when you have a president who was not in the military, theyre very powerful the military gets more powerful. When we come back well get cramers mad dash as we count down to the opening bell on this friday morning. One more look at futures. Weve not had all three stock averages have a positive week all year long. Well see if we can do it this time with futures mixed. Back in a minute. We need moola [ male announcer ] its simple physics. A body at rest tends to stay at rest. 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