First time since november but settled just above that. Road map begins with the dow looking to work back its worst week in over two years. Caterpillar results beating estimates. The Company Announcing a new 10 billion stock repurchase program. Cisco slapped with a dow downgrade by jpmorgan. Apple slated release results after the bell today. Well preview how the allimportant holiday sales season has impacted its quarter. First up, stocks are looking to bounce back from a rough week which ended with the dow 318point selloff on friday. The s p coming off the worst weekly percentage loss since june of 2012. This, on worries about emerging markets and concerns that may further scale back stimulus at the fed meeting beginning tomorrow. Turkey has an emergency meeting planned tomorrow. Turkish lira, one were watching. You said on friday, jim, when panic is in vehicogue, everybod wants to join in. Theres typically a big downturn in gdp, im not saying that religious versus nonreligious should be the way they should be. Im saying economically you dont want to invest in a country like that. Money pull back. Argentina going the way of venezuela but not willing to say that because venezuelas been a pariah for years. People thought cat would miss, why bother to cover shorts going into the weekend knowing the worst dow stock from last year is going to disappoint again . They did, which is causing a different scenario, its harder to be short here. How much is riding on the fed meeting . I think the commentary will be very will regard it as being very important. But were in the midst of earnings season. We forget what these earnings, what the companies are saying. Now the companies uniformly are saying, the big spur in their growth is china. Now, they are almost all long cycle chinese. In other words, these are things that will not be kept back by a chinese trust bank that did not collapse over the weekend. Once again, if you think that chinas going to collapse because of a bank, you come in and you see they bailed out the piece of paper, if youre inclined to be as negative, youre kind of being stupid. I mean, i hate to say that, i know its all great to be able to have many different views, but not if the facts change. In facts change, change with them. We go through periods increased focused on these kind of conceivable things that could disrupt the markets. Thats fine. We seem to move through them. Suddenly theyre no longer in vogue. And youll find on the other end of the phone people saying, why arent they focused on italian borrowing costs . Right. Its interesting how that happens. Now were focused on shadow Banking System in china. Right. Larger growth or lack therefore of the economy and the turkish leer ra only to perhaps pass through that in the next few weeks where people say heres the best place to be. Same dynamic, overdue for a correction. We fall 3 , people lose their minds. A lot of stocks really did break down last week. I mean, for instance, probably the Strongest Group that no one ever talks about, because theyre so incredibly boring to talk about, the insurance stocks. They had an unbelievable year last year. First quarter, theyve been the most horrendous group so far this year. Some is fischman being honest saying theres price war, that and travelers, one of the worst performing. And that has been just terrible. Retail, Howard Schultzs comments ringing in my head, the quarter where things shifted to the internet from bricks and mortar. There are definitely issues here. They tend not to be issues people are talking. Really, i went over argentina closely, theres a also of companies that have a lot riding on argentina. 40l 40 Million People. We can make a great deal of argentina and saying its the beginning of the end. Argentinas been imploding for four straight months. We finally have what i thought overdue correction not a correction, a seminal change in currency, not unlike what happened to venezuela. When you listen to what the ministers saying, he wants to adopt very much a venezuela model, which has been difficult. Strangely enough, Procter Gamble talked about how to make money in venezuela. But when you change your government and go hard socialist, that takes you out of the meeemerging market quotient. You have a lot of children, thats a reason a Diaper Company would like to be there. Argentina is going socialist marxist. The idea, oh, the emerging markets are bad. If a 40 million country goes marxist because they believe thats the way to go stepping out theyre going price control, theyre going trying to change equality in the country. Theyre also corrupt. Corrupt meaning that theres difficult for American Companies to be there without trying to augment what they do to be able to stay strong in that country. Right. Without running afoul, of course, of corrupt being a term in our country, but over there would be fairness. Sure. All of these concerns aside, you do sometimes, you can forgive people and if they get overly concerned, i remember 07 people saying dont worry about the credit markets, everythings fine. Remember the outgoing fed chairman saying subprime is contained. It was very wrong. I think the systems stronger now. I dont know if the chinese shadow Banking System will bring down everything. I doubt very much it will. Its not that many years ago. When youre building the number of coal plants, say coal plants, though caterpillar was not striong on mine, youre not going to stop the coal plant building. News out of china last night, trying to get away from the heavy duty pollution causing industries. Chinas gripped with the idea theres a tremendous amount of dying there, respiratory illness that leads to fatalities. Theyre not interested in earnings per share, theyre interested in revolution per person and they do not want a revolution and theyre going to get it from medical and health if not careful. Lets move tonight earnings reports. Weve gotten our share of ones that werent impressive, caterpillar reports earnings of 1. 54 a share, well above estimates. Revenue ahead of consensus, despite 10 drop in sales. Announcing a new 10 billion stock buyback program. They have 1. 7 billion remaining, which they will conclude during the First Quarter. Buying back a lot of stock. This was a big number, in terms of where people thought theyd come. Biggest beat since july 2012. When you look at company, which has been poorly managed, and the buying of the excavating company at the top of the cycle, really stupid, buying a Chinese Company that didnt exist, another poor move, but they laid off a lot of people, boosted what they make per machine. Selling fewer machines, theyre doing better. This is a story of declining inventory in the United States. They try to dance around the inventory issue. But theres replenishment going on and its a story of nonresidential construction which is something that United Technology said last week we kind of forgot. United technologies is otis elevate somewhere heating ventilation, airconditioning, two boring topics not as interesting as talking about yellen and transition to fed. Yellen and transition to fed, i like the seahawks here, but when you Start Talking about United Technologies youre talking about whether Richard Sherman will have impact against peyton. I like the line, ill take denver. More granular. Espnlike way of looking at companies far better than a broadcast way of looking at it. Sorry. The buyback is big news at cat. 10 billion authorization, 18 of the flow, and i read this morning cats flow is among the lowest of the dow components, but critics argue its trying to mask order backlog 2 billion lower than last year. Look, i think caterpillar, if you look at share count over the last five years you see no diminishment. Its a company thats not able to did ill a directv, being there a better stock than caterpillar, i like the fact caterpillar is presenting a face which says inventories are low, which gives them a chance to say good things about 2014, chinas a stand out there. Thats counterintuitive, all we ever talk about is how chinas had the downtick from 7. 8 down to 7. 6, which is meaningless as ours going from 2. 2 to 2, but chinas always worrisome. The china bears were out this weekend in a way that really was, they were not pandas, they switched to grizzlies. But when i look, they dont have a lot of its not a heavy grizzly bear segment. I dont believe theres grizzlies in the continent. Out west. Canada. Yes, alaska as well. I dont think they made their way to china. Id love to shout fire in crowd in 2008 i shouted fire in the crowd. On the today show i said there could be a fire, maybe you have to beat it. Last week, ppg, the ceo, were trying figure out how business could be strong and the stock go down nine points in a heartbeat. I was trying to describe, chuck, 190 stock, thats a large dollar number, people are like, whoa, short them, ppg, theyre not doing anything good. They actually are, but now they dont report for a while, but i look at ppg and people short stocks based on high dollar numbers . Im saying stocks can be knocked over quite es ily. Different from last year. Yes, yes. Nobody could knock anything over and nobody could short anything and hedge funds trying to take risk down. So true. And didnt put up the numbers. Caterpillar was heavily shorted stock going in. Yeah. Of course. We know why. Different story for cisco, jpmorgan cutting rate on the dow component to underweight from neutral citing weak innocence emerging markets and delayed spending in the switching market, Software Software developed networking i knew product and they think spending will come down in advance of that. F5, a big customer with cisco, reported really beautiful number, obviously, reported on a horrendous day. The stock was up ten. But ciscos had a series of tremendous misses. But as always had a halo. This was the beginning of what you could begin to get a bottom in cisco, the halo was being undone. John chambers has always been given the benefit of the doubt. This is one where im sure John Chambers says, you know what . Those guys, they are writing a story which basically says, we are doing poorly in these emerging markets, but when you look at some of the Conference Calls last week, theyre the only one. Ciscos got a real management problem, but youre not supposed to say that. Why . What does that mean . You say it all the time. Because, well, i dont know, im not fearful. Perhaps i should be. A lot of times i feel in my career when you speak freely, youre making a very big mistake. To read the downgrade, theyre not doing as well as their competitors, and theyre true, chinas bad. Its like ibm, youre not supposed to say anything bad about ibm and Warren Buffett likes ibm. There was a horrendous call, ibm. Sometimes youve got to call it. Times youve got to call it. An al gui an al guise it to sports. Horrendous quarter for cisco but it didnt get blasted to oblivion because theres a benefit to the doubt. This could be the beginning of the end of the benefit of the doubt, more realistic view of this company losing to juniper, which, by the way, had an amazing quarter. Are we supposed to decide that junipers the outlier . I think cisco is losing business to a lot of companies. And that juniper quarter was as good as what cisco was bad. Bad. But junipers not talked about because juniper was viewed as a dumb company. A nice piece about the new ceo and howell out and janna having an impact on the way he think. Beautiful preannouncement. It was. The stock was extremely strong, last week it was. Cisco shares dont look toing down meaningfully, say 40, 50 cents, not nothing on a 22 stock. And the buyback in there. Speaking of buybacks ineffe ineffective, the flow has shrunk but the buyback done as an average price of a Hedge Fund Manager who would have been taken out and shot by now. Wall street bracing for a big after the bell earnings from apple. Find out what cramer thinks about the iphonemaker after the break. Also ahead, Royal Caribbean getting a boost on earnings but faces challenges after a stomach illness strikes hundreds of passengers on one of the companys ships. Well talk to the ceo of the kruse operator later this morning around 11 00 a. M. Futures here, s p is 3. 3 below its january 15 high of 1850. More squawk on the street live from post 9 when we return. Well never be royals apple set to report earnings after the bell today. Analysts expect the tech giant to report fiscal First Quarter numbers 14. 07 a share, revenues of almost 57. 5 billion. Figures among the issues in the spotlight. Despite all of the estimates, the big discussions will be china, though phones may not be booked for december quarter and icon, right . Is it going to overshadow the business . I think it could. China Going Forward they dont theyre conservative in their projects but china will be a a dominant theme, people who did not like lack of china initiative, have to do crow eating. Im concerned about the Retail Stores in the United States because retail mall traffic, which they have a lot, is down, but you know, samsung did poorly, and nokia did poorly. Now, maybe this is share taking and we dont talk much of share take because apple had been losing share for so long. Its possible, although i mean, it operates at the higher end. I dont know if we can expect thats going to be i mean that they will gain significant share. We have to know what we have to know what chinas subsidizing. I dont know whether china will be difficult to tell that. Thats not going to be anything in these results. But people want to look forward. Are there people who are going to say, theres no new big refresh . China mobile i meant. Were all kind we all kind of know, its set in at 500, okay, they havent figured out a car that runs on water yet. You know, the day there is something out there is a nice thought. Its 2014, man, come on, wheres the tv . Talking about it for years now. Get on it. We all twhan want that tv. I was trying. If we have smoke detectors that we can wave our hand and say hello to, wed like to wave our hand and say hello to thursday night football. I want my iphone to expand so i can stick it on the wall and then it will contract and i can put it back in my pocket. No matter what they do in phones say its 56 million, that will be a record, barring a massive surprise. The previous record, 47, back in q12013. Are they in the dog house still . I feel like theres a dog house element. I dont know if theyre in the dog house. The multiple is extremely low. By the way, there will be a focus on how much cash they generated during quarter, its always, frankly, stunning. Yes. That cash making abilities of this company have truly never been equalled. And that will go to the Capital Allocation question yet again, so they may get questions, what about it . Theyll probably answer the same way they have been, well let you know. Early this year, at some point, well let you know. Weve returned a plan of 100 billion in determines dividend and buybacks. The low, greatest debt offer of all time. They are they tend not to be great work of art, people who have really studied the great i think they studied the breaking bad, they delivered these cablelike arcs on their Conference Call. This is, apple, has not done it. Doing daytime drama. Its as if someone said, lets me coach you how do a cablelike homeland to a Conference Call. Some calls are disjointed, guys, get a script. Theres other calls that developed into a magisterial full story. Well get some of those with amazon google, facebook. Amazon, he gives it 27 google they have developed a good conference. Facebook is breaking bad an emmylike Conference Call. What role is sanburg . Zuckerberg is walter white . Claire danes. Shes claire danes. Well all over the place. I want to know who the true detectives going to be. Talented. Who is matthew mcconaughey. You love that show. You really do. You know who amy hood. Amy hood. The best, new actress on the scene. Microsoft cfo. Im tell you, a star in the making. Got it. Rising star, amy hood. Well get cramers mad dash as we count to the opening bell. Well get the futures and get monday started. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. All right. 5 30 before the opening bell on a monday. Want to talk merck. Yes. An interesting reordering coming in the drug group. Merck, we had such low expectations for down here, and this morning we get a Morgan Stanley upgrade thats kind of rather startling, saying, you know what . Merck has momentum. That has not been the case for a long time. The company that had momentum was bristol meyers. Bristolmyers said something on the Conference Call, they acknowledged they had a, quote, nice valuation and that made people its like, oh, my remember when reid hatings said my stocks too expensive. Or elon musk and tesla. I like merck is inexpensive stock and done a lot of things wrong and now can go right. Bristol, when i go over the quart, rerating itself as biotech and acknowledging, one point someone said are you rolling the dice . I think bristol didnt handle the question well. I think the answer should have been, were going to become the cancer, doing our best to emore yor rate cancer around the globe. Merck has low expectations, david that they basically can put numbers down and pe