Yield . What are you guessing . Around 2 . Lets take a look and see if youre right. Yep, we manage no were at 1. 8. Pardon me for that for forgetting how low we had gotten over the last week or so in terms of what it does cost the u. S. Government to borrow for ten years. Still well better if you compare to france bore rogue. 635 or italy at 1. 6 . Road map this morning starts with Morgan Stanley suffering the same fate as breaththren. Well break down results for you. Johnson johnson posts mixed quarter. Hurt by what else strong dollar. And around the rest of the world, imf cutting its outlook. China posting its slowest growth since 1990. And qe that is certainly on the docket, isnt it for europe this week. Lets start with Morgan Stanley. Its the latest Financial Firm to miss on quarterly results, at least according to what the analyst whose follow the company had expected. In this case hurt by what appears to have been weaker trading revenue out of its fixed income unit excludeing items profit at 39 cents a share. Revenue excludeing accounting adjustments fell more than 8 . Bank of america is added to Goldman Sachs conviction buy list Firm Sees Upside after the stocks recent underperformance. Becky quick, by the way, will have an interview with brian moynihan, live with becky from davos, switzerland later on the program. Lets talk Morgan Stanley, jim. Welcome back from the long weekend, by the way. Yeah. We focus on this firm in part, it is different than its breath rent because of the continued focus on Wealth Management and on all of those Financial Advisers it has out there. But they trade bonds then may have a smaller capital base to do it certainly mr. Gorman taking it down. 599 million revenue number not what people anticipated. So perhaps below estimates. You can argue every single one of the brokerage banks should preannounce, should preannounce. Misses are gigantic. Or you can say, listen we told you misses will be gigantic, look at rest of the businesses . Goldman, people did not choose to look good, goldman 1 the95 goes down to 177. Citi didnt know about legal, okay. Jpmorgan didnt know about legal, including a couple of comments by jamie dimon about five, six regulators. Which may have obscured what he would argue are record earnings. Bank of america was not good. We didnt see a lot of records. Goldman, stock went down a lot. Yes. Suntrust and wells if you circle back suntrust and wells dont have fixed they dont do it. Right. So therefore, people are saying, i want a bank that is a bank, all right. Morgan stanley i mean its absurd here but if this stock will be up big if they close fixed income currency but thats silly. Gorman will tell a story, this is my main point, gorman will tell a story, the cfo will tell a story, youre going to like it. Youre going to like it because the models being transferred. Supplements to Earnings Report include this looking forward deck that you can see it here look at the pie chart, what the key is there, management in 06 was this much now its this much. Where does it come from as a p e of overall . Fexs fexs fixed income dramatically shrunk. They have a big tailwind from lower funding costs because they dont have to worry about that. These things are influx. People are trading instantly when things coming out. These are complex analysts, this is not ppg which is a terrific quarter these are not retailers, they are not based on gasoline. Youll see delta up because delta was down 10 , gasoline was big. I caution people who want to bang Morgan Stanley down that the stock was at 39 okay bought stock on this hit, betting that the stock went down to 34 and with the worst that would happen go to 33 the book values real. Gormans real. Nobody cares before he speaks. After he speaks big fallout. This is not a football game. Its not like seattle wins but then we have this press conference with Aaron Rodgers and it looks like that they look you know, it was green bay lost. No, didnt work like that. Gorman might tell you a good story, and you might have to reevaluate. Wait to hear what he says. Your point is transformation taking place over a longer period of time certainly than a quarter. Right. I would add, though still trading bonds. Like everybody else they dont seem to have done a good job of it. Yeah, i think maybe what perhaps wasnt enough liquidity volume, Everything Else to get it done in terms of numbers. Go back over the goldman quarter that was integral. It was, fixed income currency commodities the weak spot it would seem particular to that. Why didnt an analyst say, i think that fic will be bad, fixed income and everybody who has that discount it. But it wasnt said. So we came into the quarter thinking about net interest margin. Weve seen a number of quarters weve realized trading was bad. Lloyd blankfein can call it did you see underwriting numbers . Did you see by the way, Investment Banking and equity and sales and trading an important component of Morgan Stanleys earnings as well its no just Wealth Management. A lot of the companies gave applause i lot of revenue. A huge amount of revenue gaven up since 2012 by goldman. You dont feel good about goldman. But that is kind of short term fixes income is better next quarter what do we do . We want to get away from the swing, why i bring up suntrust and wells. Right. Why suntrust and wells three weeks from now will be up. When you read the quarter, suntrust has one charge, anoubsed theanoubs ed announced in in january. Go through bank of america, everybody is thrilled it has slightly more than 3 million in charges goldman had a big charge. The upgrade today on bank of america . The stock fell from 17 to 15. You know if they can do the 1. 60, argue maybe the bank deserves to be at 16. 5. I would i would prefer buying stocks that go up meaningfully okay, go up meaningfully. J j, my Charitable Trust owns it looks like a disaster. Read 2015, just horrendous numbers are terrible. Id like to hear what gore ski says. Sales of new drugs helped johnson johnson, posted better numbers 1. 27 a share. Revenues shy. Of course, weve talked a lot about the impact that the stronger dollar will have on these multinationals. We may hear him tell a good story. Schlumberger last week the quintessential one. Everybody hated schlumberger. On the Conference Call schlumberger said seven great things that i counted. Stock ended up up huge. I mean this is a quarter its not lending itself to look j j you say, you know what alex gorski is going backwards. Hear what he has to say. Its dangerous to act, because theres too many moving parts. Im not punting but i remember that alcoa was good it was at 17 and then went to 15 a lot of moving parts. This quarter not lent itself to snap judgments, stocks hit the hardest like schlumberger, it was a good quarter. I wonder what will happen with halliburton where the quarter looked great. Lets hear what they have to say on the book. Well, we do know that baker hughes has a large investor in it now in the form of valueact right . Jim, you saw that didnt you . Yeah. I also tell you saying, again, here im searching for all of my paper here but taking very large stake, believing in the power of that combination. It does seem right. Between halliburton and baker hughs. After reading this its very right. Whats so interesting, north america is not that bad. For halliburton, middle east is terrific. Latin america was terrific. Heres an odd thing, oil is will when you read these reports from halliburton, maker hughes, schlumberger, its almost inconceivable to see oil bounce because these guys are going full out. No one seems to be cutting back other than north americas not cutting back theyre going after the sweeter spots in the they seem to be rig counts coming down. Productions not coming down. Rig count, certainly. We lag but we are going to see production decline down the road. Absolutely. Youll see selfcorrecting mechanism what happen was most interesting is is that production is probably going to be up very big in the First Quarter because theres just so much drilling that has to go on because of these hbpps clauses which make people drill and then the amount of production is coming from the already open wells. And then the gulf of mexicos going to have a gigantic First Quarter. So theres really only 1 million balance in excess now. Iraq is pumping a lot. And that was because of isis we didnt think. But iraq had is doing 4 million a day. People think iraq would have wanted 2 million. Theres a lot of production and its not stopping. Its surprising the First Quarter will be so much spent so make the First Quarter big. And remember the these are oil comes after maximized cash flow. To pump like just to pump your eyes out. Yeah. It has to happen. Yeah. Thats why you dont get a First Quarter bounce in oil. I dont know how oil goes but its not going to bounce. But 45 47 . I mean come on. Can they really continue to make money at that level, jim . And actual sunk cost well not a new well. Paid for. Right. People forget than you have sun cost well paid for when drilling like mad, up until october, and those are coming those come on. Whatever you get out of there, money good so to speak. Yes. Once its drills. Wells depleted 15 . Quick to deplete, not gulf of mexico but shale wells. Next year higher oil not lower. Next year not next quarter and not the quarter after that. Too much being pumped. As we begin a shortened trading week futures as you saw are on the rise on hope Central Banks take aggressive actions to boost economic improvement. The imf, by the way, lowered 2015 Global Forecast for Economic Growth from 3. 8 to 3. 5 . As you also may have heard, chinas fourth yarder gdp, steady at 7. 3 and in europe theres expectations ecb will ramp up stimulus at its policy meeting. The big macro pictures, china 7. 3 number theyre i didnt see shrenk toink to grow but felt that way. Its a better rate of growth in a sense at this level. I think, first of all, hoping for 7. 1. You may think its horrible. I thought 6 this year. Theyre changing this economy on the fly. They are making this an internal consumption economy. Trying to but its only 36 . Right. You turned it on its head in terms of us where we are. The iron Work Companies pumping like mad because they think they can drive out of business the staterun chinese iron companies. I think that the i think that the Chinese Communist party is trying to cut back on excesses everywhere, whether it be excesses in building excesses in lending, excesses in marginal lending. Excesses in consumption by Party Members and gift giving lets not for get crackdown on corruption has taken toll at the higher end. Yes. You see that in the diageo numbers, johnie walker. I think theres a transformation in china, this regime will not tolerate willynilly growth which produces a lot of pollution and corruption. A i think a year from now well be talking about china as kind of back. But they have to get rid of excesses. You know housing prices the stock market down enormously because of a change in margin requirements. Margins were ridiculous. Unlike us where you know where greenspan, who could have controlled the rate of growth in margin they chose to raise fed funds rate. Here, theyre controlling margin. Rational. I think the chinese are doing a lot thats right. Thats why i dont think you peck to see many of our companies kratsercrater on a chinese slowdown. The Domestic Companies that we sell into that are domestic might do better. Right. Overall, as we begin this week given last week and the turmoil in currency markets as a result of what the swiss dit withd with the franc and continued focus on oil and ecb coming very importantly in terms of whether it will or wont really meet expectations in terms of quantitative easing how do you approach things. One of the things we have to get away from the idea that futures are up. Because breakdown of the future of whats in the s p, oil is 8 finance is 8. 17 . Youve got 25 s p going the wrong way. Futures seem to indicate the wrong thing because futures are some Hedge Fund Guy saying wow this i good ecb. Theyre not about the individual stocks. Many of the companies are not doing well. I look at ecb and say, its disappointing. It hasnt happened yet, i say its disappointing. We have a big perception overhang from hedge funds. Ecb not going to be good sell the futures. All i can tell you, unless theres structural reform in europe it doesnt matter. Just keep they keep crushing the euro to make so bmw does better. Structural reform. Its literally mercedesbenz, volkswagen audi in charge. Nice cars. The president going to suggest hiking taxes on the wealthy and on banks, as well certainly levy new fees on them in tonights state of the Union Address. To davos, becky quicks live interview with the ceo of bank of america, brian moynihan. A look at futures. More squawk on the street after this. The lightest or nothing. The smartest or nothing. The quietest or nothing. The sleekest. Sexiest. Baddest. Safest,. Tightest,. Quickest,. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. Introducing the allnew cclass. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. President obama delivers his state of the Union Address to joint session of congress. Slated to push a plan to increase taxes on the wealthy by hiking cal hiking Capital Gains rate, exposing a fee on large Financial Firms to pay for tax cuts and benefits for the middle clasp republicans who control both the house and senate say the president s plan is a nonstarter. Some argue this will go towards at least trying to address the ever increasing gap in our Larger Society between the haves have havenots, so to speak, what we know is the wealth the 1 everybody else. He doesnt like the Capital Gains thing, it was a matter of time. Cap gains are up i think under its 28 still under ordinary income. Dividends as well. Right, always a sense turn ordinary income into Capital Gains, something rich people can do. I think its dead on arrival. I dont think he has the votes. I think step up in basis for when you inherit property thats been in the tax code forever. I just cant imagine that even going away. It has been the bedrock of individual income that you get that step up and there a lot of people middle class used to benefit from parents pay dids 16,000 for a house and house is 250,000. Its noted agood idea for the middle class. Right. You can tax the stepup in basis of for the wealthy but great break of the middle class, parents bought homes after world war ii and values gone up even went down the last 2006 its almost not thought through. I was listening to larry kudlow today help wants to believe the legacy the middle class didnt do well and he did his best. These are the things when you have a republican congress, we can talk about it or we can say, its not going to happen and were just not going to dignify it by to say its going to happen. Yeah yeah. Its id rather talk about the price of earnings ratio bristolmyers. Well see what areas they can conceivably where do you think they can . Who knows . Maybe cyber security. Kibcybersecurity. Wishful thinking. The republicans have always told me they want Corporate Tax reform without individual tax reforms and the democrats have always told me Corporate Tax reform is dead on arrival. The previous treasury and there is treasury. A great article what president obama proposed versus what happened. He tried tax on the banks. Wheres the tax on the Oil Companies . Where is the condition the average person got an increase off of oil . Good luck. We need to ventant up next cramers mad dash. One more look at futures. Set for a higher open on this first day of trading of the week. More squawk on the street from the nyca this. A look at times square. Six minute before the opening bell. Why stand when you can sit . A mad dash over to the tell straight, didnt work now a mad dash back. This is the super mad dash because we barely made it. What do you want to start with. Two pieces of good news that could reflect what futures saying. Delta announced december quarter. Weve had a couple of companies say, listen maybe revenues wasnt that good. Delta reported a very good quarter and talked about a number of saving for oil 2 billion. The stocks and down 10 going into the quarter. People going to like it. That simple . Yeah. Because it got killed turned out to be good traffic. Right. These stocks have been down theyre popular favorites. As we know its almost an ol la gop ollie. Way these guys dont compete. Delta has overseas stuff. Well see. A pure domestic play could be better. Right. Tiffany heres a piece, like these kind of pieces this is a rating change. They didnt like tiffany at wells. Now they feel its been overdone and its time to buy. If you remember tiffany was the beginning of this earnings season. This and sandisic a negative note today. But its interesting that people are already starting to circle back to the real losers of the quarter, whether tiffany or bank of america saying, wait a second these have been thrown out. Maybe they were thrown out too aggressively. Im trying to rationalize why futures are going up and whats going up with them because i think the market could be down 10, 15. Why do you think that . The financials are a big part of the economy. And i think also the drug stocks are going to take cue from j j until alex gorski says were doing things. Im curious to see where ive got that stock. Ive gone it down two, three bucks. Yeah. Look, if you read the release, it basical