Weak ahead of the jobs number tomorrow. A handful of ugly misses, store cuts and outlooks, macys, kohls, l brands all moving low sgl er. And market slipping away from 20k. A day of record auto sales. And trio of news to get to on apple, the app store and a new 1 billion investment from that company. Were going to fill you in. But first up in about a half hour from now the Senate Armed Services committee will hold a hearing on Cyber Threats against the u. S. Sparked by allegations that russia engaged in hacking to influence the u. S. Election. Committee chairman john mccain favors creating a special committee to investigate russia while president elect trump has expressed obvious skepticism about the russia hacking probe. Journal today reports the president elect is working with top advisors to revamp the office of the director of National Intelligence which is this nations Top Spy Agency created after 9 11, guys, to sort of coordinate intelligence from various officials. Question is what the president elect believes, what john mccain is going to try to get some of these intelligence officials to say. Basically their opportunity to make their case before meeting with trump tomorrow. Yeah, i mean, i always hesitate to dive into politics, but i do want to always try to relate it back to the stock market. Anything that delays the agenda of deregulation, Corporate Tax reform and repatriation is something that makes stocks go lower. This is the kind of thing which maybe says that prominent senators use to be able to express independence from trump, which therefore could delay the agenda. Obamacare repeal was something that was seized on that was so aggressive that you could delay the agenda. Were hearing a lot about the border tax. That is something that is not part of the agenda per se. Trump did favor, but im saying the context that i want to approach this cyber hearings is just strictly could be a declaration of independence by some republicans. Or potential wedge that could effect other outcomes, other policy trump got a mandate, maybe the mandate is not part of what the senate perceives itself. You know, this is something you talked about yesterday, david, which is the idea once you become president , youve got people who are not necessarily on your team, who are a part of your party. And maybe they express you get bogged down on this, then the next thing you know maybe you have to retroactive tax cuts maybe you dont even get the tax cuts. Mandate or not, i think youre right to the extent that the Business Community and investors in the stock market have been focused on tax reform. And to any extent by the way, we dont know of course. You can do both. You can repeal and replace the Affordable Care act while you also pursue tax reform. And theyre not unrelated. There are certainly aspects of the aca that involve peoples taxes. Very true. Youre right. Thats where the focus has been for our constituencies. Right. The people we speak to. And so if this does get pushed as a result of internal squabbles over intelligence or even how to go about repealing and replacing obamacare, you push back tax reform. That was reflected somewhat in the minutes from the fed, uncertainty about size, timing, composition of all kinds of policy matters. They link it too. All these things have linkage to the stock market. Look, Rex Tillerson is up to be the secretary of state nominee for the president elect. And that figures in this too because hes regarded as someone who received a medal from putin. Now, there are historical analogies people can go back to and say, listen, when you get medals from dictatordictators, not necessarily something that if we produce hard evidence that putin was doing the hacking, then you could use that against tillerson. I dont want to spin negative scenarios because i think the problem with that is thats msn. Thats not me. Thats another network. Im just saying, look, theres an agenda and the market is near 20,000 because the agenda, the tripod of deregulation, Corporate Tax relief and repatriation and anything we talk were going to cut away to these hearings today. Were not cutting away to when youre going to get your tax break. Because we dont know. We dont know. When the hearing begins, of course, we get some headlines, well take that live when clapper begins to speak of course. Meanwhile, a rough morning for retail. Both macys and kohls down sharply after lowering Profit Guidance for 16, weaker than expected holiday sales. Macys also cutting 10,000 jobs, closing dozens of stores. We knew about the plan from last summer, guys, but clearly black friday although strong was buffett buffeted by weakness in early november, early december. Yeah. It was really an interesting interview with Terry Lundgren last night. The question was why didnt terry see it coming. The answer was two years ago they had their best Christmas Ever. So how do you see it coming in 700 days . And the answer is that you didnt see theres no way that you can keep up with amazon. One of the things terry said in the interview was, look, theyre number three after amazon and walmart in the categories that they go for online, but online doesnt expand the pie. It doesnt pay the rent. So this was a seminal quarter. Kohls, i dont know, theyre struggling for reason for being. Matthew boss from j. P. Morgan told you all this was going to happen, but people were buying these stocks, trump rally, trump rally. The only thing good is that pvh, manny came out today and said his numbers are going to beat. Which what says is dont read through apparel being bad. They may be a beneficiary of all the sales. But do read through that the mall and l brands today too, victorias secret down is there something here we didnt know already going into the season . Or talk about constantly in 2016 . I mean, its not as though we sat here and didnt talk about the mall and the decline of the mall every single week, not to mention the rise of amazon. Not the rise of amazon, the incredible power of amazon. I think what we discovered is that amazon is not playing with the malls were won. Calvarys fabulous. My grandfather served with patton. He had a horse. Terrific. At the beginning of that war not so good against the mark iv tank. They didnt have helmets, they wore hats. Yeah, didnt have a metal hat. World war ii was different. Amazon when they deliver to the house same day, now were talking thermonuclear. Literally an air war when drones come on. Yeah. The overpriced f35, i just find it was very discouraging when Terry Lundgren says we havent figured out yet. Two years ago they claim theyre on the verge of figuring out. I think this is one of those things our mothers would say just using people who are wise. Of course. Well, jimmy, if you havent figured it out yet, maybe youre never going to figure it out. Wise words from Louise Cramer. Not everybody has that belief. Walmart and jet for example are expected by some to later in the year posting bigger year on year gain. I like that. I like what walmarts going to do. Theres a thing called rth that has all the retailers in it, that can pull everyone down. Im concerned saying nordstrom or penneys is different. They ha it is sephora, we were doing instagram Fashion Shows i could post a picture, but i didnt. People dont walk out the door without makeup. But sophora is not publicly traded. Also brings to mind this craftsman tool, black decker brought it up today, talking with santoli upstairs about it, is this sort of the equivalent giving occupy your queen . It was a 2 billion deal a year ago. We thought it was going to be 2 billion. You could add it up and say it really does come to 900 million if you add in all the different pieces. It is interesting that eddie lambe lamberts fund just went 500 million hes put a lot of money into sears. Yes. Which keeps bleeding. They are closing more stores. Sara the reit that owns those properties or leases those properties to sears is going to take some back. I think its this summer when be public for a year so any worries about fraudulent conveyance will go away. Why do i mention that . Well, wheres sears going . Its up today, but what is the long term future for this dont look at me. Montgomery ward when you figure it out, can you ask Louise Cramer . My father was fired from gimbals because it was so good. All i can tell you is this company is being kept alive by hedge fund manager. And it does not have theres nothing in here that makes me feel like anything is better than expected. I really did feel craftsman is worth a couple billion, but its a deteriorating asset. Whats left, die hard . Automotive, when you compare to the rest of the retail landscape, you could pick worse areas to be in. True, but in the end i mean, what is kmart . What is kmart . Is that an existential question . You bet. Sears and kmart like i urge people to go back to that class we took. Remember that . These are no exit thats a suboptimal read. Thats kmart. No exit. Yeah. One last point here on the broad markets, dow trying for another attempt at 20k. S p only seven points from alltime high. Futures lower this morning as we said adp 153 is below the estimate. Claims were ridiculously low on a holiday week. I know. Cant count them. Interest rates are a little lower today. I see already whats very interesting is like if you look at the article by a very good writer in New York Times who really knows autos saying this was the peak. But i got tired of the peak. I like phil lebeaus work. And phil lebeaus work definitively showed that the money is going to autos. Thats what makes me really negative about macys. Really negative about kohls. People were buying. Theyre buying cars. And i dont want to see anymore articles that say that disagree with phil lebeau that those businesses were doing well. Because it just doesnt make sense to go against the man. No. Dont. It doesnt. It doesnt. Im with you. Because were the paper of record phil lebeau all the way. Exactly right. I love when you guys agree. Theres no raised eyebrow. When we really agree its like thats when my father said why does he hate you . Were saving that for later. Well see. Youve got a lot left for me. Im just getting started, believe me. So are we. When we come back, well talk about apples billion dollar bet on emerging tech. Vanguards founder jack bogle, well keep our eye on the Armed Services committee on the hill, check in with ces in las vegas later this morning. More squawk on the street from post nine after a break. Ve edodtewheru. Cor ns wehecllt wan ec it wl to ss createxenatu. Aztrdgnjukoat u tegiesdsothe couple of stories about apple today. The company has pulled the New York Times app from its stores in china saying it is complying with a request from chinese authorities. Meanwhile, apples confirming its joining Softbanks Vision Fund with a 1 billion investment. Late this morning josh lipton with a story from the company that App Developers earned 20 billion last year. 40 jump. We know apple takes a third of that incremental revenue. Im glad you pointed that out. Remember tim cook said this would be the year that the Service Revenue stream would be equal to a fortune 100 company, the smallest fortune 100 company is 27 billion. So its obvious theyre saying this is going to be really terrific. But my issue here again is if you dont do an acquisition to boost that Service Revenue, it just comes in piecemeal. The analysts will not give it a pricetoearnings multiple. I think that this is important. The New York Times thing is very interesting. There would be a time we have a president might come in se i dont know if this is good censorship, but this president elect, whats he say about New York Times . Failing. So maybe theres an agreement here between the i dont know. The softbank fund, which is still in stages biggest investor saudi arabia will be in as much as 45 billion of the 100 billion is going pretty well with apple putting in 1 billion, qualcomm in, fox con also in, fox con makes the iphone for apple. You can see a lot of the connections here. Qualcomm providing the chip sets. Theres a lot of interrelationships between those who are investing. And remember, its a fund run by softbank, but doesnt mean softbank is going to own the underlying companies. I havent figured out or heard yet about the Fee Structure how thats going to work. And typically in these kinds of funds will softbank have the right of first refusal to buy the companies from the fund if it wants to own them . Its going to put in 25 billion, saudi arabia 45 billion and billions from others are coming in here. But its going to be a force. I mean, even if theyre not using any debt, just 100 billion, the equity to buy things, man, thats a lot. They started with this oneweb, i guess, or may put that in there as a softbank investment in the fund overall. You have to think about it sort of as a venture fund. Did you see fbr raised price target for sprint from 8 to 11, improved cash flow . Softbank is not to be dismissed as someone that throws around money lightly. No, in the case of sprint you can argue they did throw around money there as much as 20 billion might be working. I dont think its working yet. I think masa son knows he needs a deal to make it really work. Tmo is so hot. Theyre so sub scale at sprint and theres a belief tmo is still subscale. Masa son, thats part of the deal here. He doesnt go to trump tower just to be nice. Hes thinking what can i get done here. And he wants that deal. But its very much unclear whether that deal will happen. But do you think this Justice Department necessarily block a deal like that . The fcc, you can make two arguments on it. You can say youre going to bring together two subscale players, john legere would obviously disagree with that. Theres that day masa showed up with his paper and foxcon was on it and the investment. And you can see youre getting together sprint and tmo and theyre going to be the true competitor to verizon and at t. That would be something. Or you could conversely say, hey, having four has been incredibly good for consumers. Tmobile has introduced incredible price competitive. I dont think president elect trump would like that. I mean, hes been if he didnt like time warner, how is he going to like this . Although report in new York Magazine yesterday suggested trump soliciting suggestions for an s. E. C. Chairman from rupert murdock. We dont know who will lead the agencies. Theres that 19th hole cabinet again. Yeah, i think the expectation is youre going to have a very hands off fcc and doj. But we always have that other side of the trump presidency, populism. And will we be talking about tweets in the morning when he sees there are significant job losses associated with the deal and calls people out the same way he called out gm earlier this week. This is unknown territory. When we talk about big deals, were talking sometimes tens of thousands of jobs, not 100 here or 300 there. Absolutely. I just know that i just think that the sprint a lot of people felt sprint i think sprint by the way is very well run. Very good ceo. When we come back this morning well get cramers mad dash, countdown to the opening bell, take one more look at the premarket. Kind of soft this morning. More squawk on the street from the nyse straight ahead. All right. We have about seven minutes before we get going here and start trading at the nyse. You want to talk about the s ps best performer of last year in the mad dash. Up 220 . Its funny because before i did that zions upgraded today, comeri comerica, the reason i want to mention nvidia is because a lot of people feel ces doesnt matter that much. But the ceo of nvidia gave a talk last night about autonomous cars, thats who i first met that told me, listen, youve got to be in this nvidia, you got to tell people about it. David, i think there are people who are beginning to see nvidia reminds them too much of qualcomm going into 19992000. Except that was up almost 2,000 percent that year. That would mean this has a lot more to go. I agree. This is when they reported a breakout for Artificial Intelligence and Machine Learning chips as well as gaming chips as well as autonomous driving chips. So just to dismiss this next ramp as being wrong tells you be careful because intel when they came up with the 286, 386, pentium, well, had multiple years. I dont think nvidias done. But be aware that ces was electric. Ces has been a long time since ive really cared. Nvidia. Yeah. I just wanted to do some good news. Theres a lot of bad news today. There is including news we just got on sears we were discussing earlier now closing 150 stores, jim. Not clear how many that leaves. Its like a jet engine. One engine goes down, you have three, two engines go down, hey youre going to be delayed. Youre going to be delayed. As you can see the stock reacting positively. Reacts positively to whatever because its tightly controlled to your engine point of view, if they close them all down, go up even more. We got a lot more squawk on the street including the opening bell about five minutes away. Were back right after this. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in just a couple of minutes on a busy morning waiting for this Senate Armed ServicesCommittee Hearing to begin, right about now on capitol hill, regarding the Intelligence Community, jaim clapper going to testify, john mccain leading that. Meanwhile, getting a release from sears holdings, some more store closings switching to what theyre calling, jim, an asset light business model. Well, i mean, the problem with that theyre retail. Its not like theyre a fabulous semiconductor company. You know, cost co, thats an asset Light Company and make the money from the card, i think the most telling story about sears today is how much