Overnight in shanghai down almost 4 as the yuan sits near a sixmonth low. The roadmap begins with the markets, the s p starting off shy of the fresh record high and the nasdaq beginning from right around its highest level in 14 years. Home depot is posting quarterly profit above expectations and boosted dividend. Different story with macys and shares slipping after same store sales came in below expectations. And jpmorgan expected to announce job cuts in its mortgage and consumer business. The bulls off to a good start, the dow jumped more than 100 points and closed at 16,207 and the s p hit 1858 before pulling back and closing at 1847. Thats a point away from its alltime closing high. And as we said, the nasdaq reaching a 14year high before closing off its best levels. Jim, you said last night you would try to play the role of the skeptic. I do not like to see the nasdaq at a 14year high. I took to heart some of the comments we said on yesterdays show which is when you Start Talking wompam you have to listen. Theres two markets going on. The s p is percolating nicely. 17 times earnings, i would prefer 15, 16 times earnings good profits. And then theres the other end of the market and well talk about tesla and the Morgan Stanley analyst has been terrific. But i get nervous when i see price targets double. I get nervous because weve been around when price targets double and stocks dont double with the price targets. Youre referring to Morgan Stanley note on tesla. And hes been good. Im not denying that. This adam jones has been very right. Target to 320, a bull case of 500 basically saying its not just a car company, if they can commercialize battery packs they can take on the Global Electric utility business. Disruptive and elon musk i compared him last night, you can compare him to henry ford. Look, you can compare elon musk to, you know, pretty much, tesla, edison, it doesnt matter. But i think to be skeptical about some of these. And im not being skeptical about the banks. Well talk about jpmorgan. Im not skeptical about retail, they are getting hit. But the cohort of the market trading by a different set of rules has never been something that i have made a lot of money at. And can end badly. It can. Doesnt always. And sometimes it is reflective of something we may not be appreciating fully in terms of a growth rate that is speeding up because of technology or because of a lot of what we saw in overvaluation from the 90s did end up being proved out in terms of its significance. And amazon did come through, and there would be a couple of survivors and that was right, there were a couple of survivors. But there were 301 other companies that went to zero. At least 300 full bankruptcies of companies. I remember the lists we used to look through in 2002 as you watched them all disappear. The class action suit. Look, i came out skeptical last night. I apologized for being skeptical, thats a mistake, you should never apologize for being skeptical. Going over what i said last night, i didnt want to be a bear, i wanted to play skeptic, thank you for using that word, but you cant have two stock markets at once. It doesnt work. You cant have a stock market valued on eyeballs and another one valued on minus two, minus three, minus nine comps and we say its okay. So, i want to be a little cautious here because of the late mark haines who taught me when i came on this show in 1998, 1999 that as great as the church is whats happening now its not the church of what happens in the future. All right. Well, lets get back to the church of what is happening now which includes retail earnings this morning. In fact, two big retailers heading in opposite directions. Home depot rising in the premarket after posting quarterly profits above street estimates and revenue fell slightly but u. S. And global comp stores were essentially in line for the quarter. And they increased the dividend by 21 . And meantime macys is falling by posting a higher quarterly profit. They were hurt by, yeah, guess what it would be . Hurt by . Oh, yeah, weather. Yeah. Maybe they were buying shovels and not sweaters, my friend. I mean, depot, well, theres two, you mentioned the two, the down 78 for january at macys, thats really light. My Charitable Trust owns both stocks. When i saw home depot, i thought it wasnt that bad. And Terry Lundgren is squeezing everybody to get the numbers. Maybe january is not so bad, he is calling it very disappointing and hes a very bankable guy. Can it snap back . We had a terrific analyst on squawk box saying, listen, the last ten days have been good. This is a little bit worse than weather and im going to graph on zu lily, i know its small, 45 mobile and its flash online, people zu lilly . You went from macys to zu lilly . You got to go more slowly for me to get the transition. Why dont you get on the case, whatsapp with you . Im just saying that people are buying. This is the Howard Schultz, brick and mortar problem. I think macys can snap back because macys has the best Gross Margins and they are the great executor. We got to stay on the idea that zulilly actually beat the quarter and came out and did a great job because 45 of the business is mobile. You go into the mall, you look at what zulilly has and if you are younger than we are, you buy, younger and different gender. Is that okay . Can i use gender . Yes, you can. Ive never seen david in a dress nor do i want to get that image out of my mind. Some like it hot, my friend. Im very proud of my legs. You beat me to it. People are joking, not joking, worried about the depot guidance, right . Right. Bl they see comps up four six for the year. Other people say they forecast three and they end up doing six eight and a couple of the blowout quarters we remember. Frank blake is the master. Does he need warmer weather for planting seasons those of us who get our flats at home depot dont want to find the ground frozen beneath us. The only people im worried about today is office depot. Not to mention depot had tough comes because a year ago was the rebound from sandy. All of those people buying what they needed to fix up the shore. And Owens Corning did a good number and you would like to think they had the post rebound from sandy. I see no flies in the home depot. I like the quarter. I think they did a terrific job and its constructive and the Conference Call is an important place to go to, a lot of new business within the stores really well run. Not taking at the macys did worry me. They just worry me. Not to dwell on it but to sort of wrap it up, youve been very positive on macys. Yes. And, by the way, its been of all of the stocks in that area has been a good one. But all of these pressures beyond the weather, mallbased retailers and so much else can he withstand it or is this quarter sort of saying i think he can in the way that vf corp bounced back and pvh went, again, and reaffirmed it, i think macys is a buy and not a sell on the weakness if you can get it at 51. The greatest operators is, onethird of the stores were closed, okay, but when terry is conservative and say bad things, i cant say good things. Terry says hes disappointed. Am i going to call him and say you shouldnt be disappointed . Im not in the apparel business. I dont sell perfume. You may not get a chance to buy at 51 the stock is barely down. Homes the best on the operator there is and is a lot of stores were closed. Im not going to tell you that Terry Lundgren is too negative. Who am i . Youre jim cramer. Im nikolai tesla. That you are not. Lets get to the key housing dating, the s p caseshiller report said it was down 11. 3 . And here first is to break down the result s robert shiller, its great to have you back, good morning. Good morning. Just looking through the report, the tone, wow, what a change from just a few months ago, a couple of quotes. The strockest part of the recovery and home values may be over. Recent reports suggest a bleaker picture for housing. Youve been warning us about a turn. Is this finally it . I think that theres pitfalls ahead. I think, though, that at this point theyre going up pretty fast. And my instinct is that this momentum will dissipate but not we wont see a reversal this year. I think it will still be up. How are you stripping out the weather effect from the fundamentals here . Well, if i look at year to year, thats up quite a bit, but, yeah, the latest you know, its not just weather its seasonal which is the predictable component of weather and if you correct for the seasonality, already we dont see a weak market its up 0. 8 a percent in the last month in the tencity index, so its not weakening that much yet. And i think prices will continue to go up for the first part of the year at a fairly good pace. But i think they may weaken. Theres a lot of signs showing that the Housing Market is weakening. Right. We should remind people these numbers are december figures. Were not really getting into january which as you probably know was the tenth coldest on record. I mean, all we see, whether its starts, whether its permits, whether its existing, pending, new, you look at a chart and we are beginning to see some of the trajectories turn down, robert. When do you think yeah. Go ahead. It looks a little bit like 2005. Nobody was paying attention as much but everything started to turn down that or early 2006. Now, that was the beginning of a disaster in the Housing Market, so i dont think its anything like that, but it is worrisome. This is a time if you are cautious you might be a little careful in the Housing Market. But we are 19 still below i believe where the index was in im of 06, correct . I dont have the exact number. If you correct for inflation were still way down. Homes are not expensive now and thats the Silver Lining in this. You know, if i were buying a home right now i would think, you know, if i want it, fine, because its not expensive and Mortgage Rates are still low by historical standards its not a horrible time to buy a house not at all. Isnt this exactly what ben bernanke wanted . He talked about trying to get housing pricing to cool. Its been the big part of inflation. Isnt this a bernanke win . It would be nice to think, conclude his career as fed chairman with a triumphant win at this point. I dont think bernanke is really in control of the Housing Market. You know, these people probably dont even fully understand it. So, i think the market has a life of its own. And, you know, the big factor in the Housing Market recently has been it bernanke. But it was in 2012 when Mortgage Rates hit record lows and we saw a burst in housing enthusiasm. And that carried over for a while but it might be fading now. Thats the way i see it, the most important fed factor to think about. Interest rates have gone up about a percent since 2012. Yeah. Professor, while we got you here. Given your history in terms of looking at overvaluation or valuation of assets and particularly stocks, im just curious to get your take on the whatsapp deal in light of sort of the new valuation metrics that we seem to be revisiting, so i guess i cant call them quite new but revisiting a lot of things we did see in the late 90s. Are those comparisons apt in your opinion . Yeah, we do have kind of a little bit of a bubble thinking. Im thinking also of bitcoin, that one has burst in a way. Right. But people are very impressed by high tech. Probably too impressed. And so it does call to mind a bit of the late 1990s with the dotcom bubble. Huh, okay. Id ask you to expand on it, were talking about. Companies that have compared to a pets. Com some level of earnings power whether or not they want to pocket it or not, right . Well, im a big believer in looking at earnings but i like to look at longterm earnings. I have this ratio that looks at a tenyear average of earnings. You cant do that with whatsapp. Thats a whole different market. Its for adventurers. And im more of a stable investor who look as the long history and wants to invest for the long term. So, maybe ask someone else about these upstart companies. I dont know, i think well keep asking the Nobel Laurette from time to time. I got 25yearolds tell me im dead wrong. Robert, its always good to see you. My pleasure. When we come back a ceos perspective on the Housing Market, well talk to Richard Smith from realogy. Also ahead, hear what blackberry ceo told cnbc at the mobile World Congress in barcelona. Jon fortts got some details on that. And wup more look at futures after a bruising night in shanghai. Relatively stable here. Well get more on that in just a moment. Heres a word you should keep in mind unbiased. Some Brokerage Firms are but way too many arent. Why . Because selling their funds makes them more money. Which makes you wonder. Isnt that a conflict . Search proprietary mutual funds. Yikes then go to e trade. Weve got over 8,000 mutual funds and not one of them has our name on it. Were in the business of finding the right investments for you. E trade. Less for us, more for you. The funds prospectus contains its investment objectives, risks, charges, expenses and other Important Information and should be read and considered carefully before investing. For a current prospectus visit www. Etrade. Com mutualfunds. Jpmorgan chase confirming plans for deeper cuts to its mortgage operations. The bank may reduce up to 6,000 jobs in the unit this year, and last year they set a goal of 12,000 job cuts and 24,000 job cuts since 2014 in mortgage and consumer. We all think the Mortgage Consumer business is a great business. When you get off the desk with the bankers, theyll tell you its a commodity business. Its not a business they really want to be in. Theres been a lot of trades in servicing but they want commercial lending, okay . Thats where the margins are and they want to be able to buy, good, shortterm paper with your deposits. So, i dont want to overdo this. I think these mortgage departments got very bloated. I feel terrible for saying it for the people that got laid off, but this is what you want along with the 3 tenyear and jpmorgan earning more than now. The cfo of the company also saying they added 7,000 people, 7,000, in Risk Management and control functions. While they have been yes, 7,000. Sheez. Did you hear that on the elevator . I did not hear that on the elevator, thats courtesy of the meeting. Thats, again, head count did come down 10,000 last year, so it just puts it in some perspective. It tells me that theyre able to make a lot of money in pretty much every environment. The thing that is daunting to me is that you have got to see more yield curve inflection. Now, everyone always laughs when you say you need Interest Rates higher. No, for this company you do. You need to see some curve. Thats how theyre going to make big net Interest Rate margins, thats all we care about not the mortgage business. Mortgage business, enough. Another big story john chen spoke to cnbc earlier this morning from the mobile world conference in barcelona. He spoke to bbms 85 million users versus that recently acquired messaging Service Whatsapp 450 mill plus. Take a listen. I work with a shareholder, you know, standard answer, you know. Very good. If someone comes to me for 19 billion, i would recommend to the board to take it, but it all depends on what it is. Got to love that. Theyre in talks. Lets take it the next stage, theyre in talks its good to know the guy is breathing air, 19 billion sold to you. When i heard from dan conan and honeywell, listen, if google will buy nest for billion, you can have the whole thing for honeywell. You got to be careful. They still have people who love it and i think this is a correct issue. Daniel loeb why is in the stock . You, listen, theres this undercurrent of bullishness if you will in this stock. You can see it is up. People like chen. They look at the sybase turn around and believe in the intellectual property but there is especially among the hedge fund names sort of a bullish theme going on and you got a few of them buying in including third point. Subscriber business is a great business and it hasnt tailed off as much. And even the privacy implications of it, its harder for the nsa to tap into it. Really . A little bit. Maybe switch back. The prez still has a blackberry. The president still has a blackberry. Really . Yeah. Wow. Okay. Well, thats interesting. He doesnt want to be hacked. I dont blame him. Were going to have the military the same size that untrue. We were the 18th largest army, 15th . Was romania, the force reductions are nowhere, i cannot believe the Washington Post, everyone bought into that, the journal, the new york times, those stories are false. I do want to get your take on some of these cuts. Thats a false story. Its embarrassing that they would make the comparisons to 1939. The r d element. But there is a manpower and an r d element to it and cyberwarfare now. Yes. Reagan had a 600ship navy, what good did that do . Honestly, those stories i dont want to be too political. What about the joint Strike Fighter . Go back to 1939. Go actually do some home work, people. Romania, larger army than us. Believe me, romanias is not is when we count down to the opening bell, cramers mad dash, a lot more squawk on the street on the show straight ahead. [ male announcer ] these days, a Small Business can save by sharing. Like carpools. Polly wants to know if we can pick her up. Yeah, we can make room. Yeah. [ male announcer ]. Office space. Yes, were loving this communal seating. Oh, its great. Yeah. [ male announcer ] the best thing to share . A data plan. New at t mobile share value plans for business. Our best value plans ever. 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