A News Conference is scheduled, a standoff with mexico looming. Plus, its a busy day for earnings. We have alphabet, microsoft, intel, all moving in the premarket. And as weve mentioned starbucks Howard Schultz joins us this hour with his companys earnings and a lot more. First up though, another busy day on tap for the president one week after his inauguration. Trade will be among the big issues on the table when he meets with uk Prime Minister may at the white house. Their joint News Conference slated for 1 00 p. M. Eastern time. Still a lot of buzz surrounding the mexican president canceling that meeting with President Trump scheduled for next week insisting that mexico would not pay for a border wall. Within the last hour the president tweeting, mexicos taken advantage of the u. S. For long enough. Massive trade deficits, little help on the very weak border, must change now. Former mexican president fox on with the guys with squawk this morning saying we dont worry about trade. Weve got china to trade with. Yeah, cicente fox, this was kind of a i think that this is the most serious break obviously with mexican relations since well, we can go very far back. And i think that this is the first time ive said to myself, well, well be a Republican Senate i mean, this is something this is almost like the dennis green. Remember i even got the quote about, you know, maybe you should realize that trump is exactly who he said he is with the wall because its, well, why dont we just go to the quote . I think one of the things this one is one thats different. I think this is very different. I think this is the one where the republicans who will break rice. Mccains already said hes troubled over rolling back nafta. I think this particular spat has a different coloration to it. Its not there are a lot of people who want to adjust nafta. There are a lot of people who absolutely want to adjust the currency because the currency is really the issue. A lot of us trade guys really think the issue is currency, not the wall. But have gotten very sidetracked because trump is sticking by exactly what he said when he was running for president. I just feel like that whats happened is this one took my breath away. Because i just didnt see this one coming. I thought there would be do you think im wrong that this isnt a much more Political Risk . Youre referring to the wall and the tax that made the associated the 20 tax, the idea that this is not about jobs as much as it is just a spat between two countries that have had very good relations. The spat should be about nafta. The spat should be about the way that we set up trade with the mexicans. I dont think the spat should be about not talking to each other, which is what vicente fox was saying. I thought it was meaningful. You also have that tweet, i believe from Lindsey Graham, about the price of margaritas going up. Analysts out today on the impact of chipotle lock. Were putting in a 20 increase all we do is serve modelo and corona and youre going to put the 20 increase through now . No, im not going to do that. I would lose a lot of customers. If they make my suppliers pay 20 , i have to pay 20 . Now, as my wife said, are you kidding me, jim . Do you think this is our biggest problem . Im embarrassed that you asked. No, no i think one of the key points certainly for investors focused on tax reform so much and what the timeline will be is does this erupt into some sort of political difficulty for the president. Thank you. With Lindsey Graham and john mccain who are such key parts of any votes theyre going to need in the senate when it comes to repealing and replacing the aca, which by the way is first out of the box supposedly. But maybe difficult has to be done under reconciliation, but not the replacement. And then of course tax reform itself and the idea of this border tax and where are the senators from, oh, arkansas, where do they come town on this . Given walmart is their right. Thats my issue. This becomes more of the question. Its not a bloc after this. I think it the bloc may be more suspect. The Political Risk got higher because of this particular spat. Heres the journal oped today, mr. Trump is a Foreign Affairs neophyte, but hes already learning that nations cant be bullied like gop candidates or ceos. They have their own nationalist political dynamics. When attacked, they push back. Well, i just think that they pushback, look, whether you think mexico is fair trade or free trade, whether its right or whether its wrong, im talking about the bloc of senators needed to be able to get the agenda through. I do not believe i believe mexico has some friends in the senate. And that this is a reason to break with the president. And im surprised that this is where, well, we said we are who we are. Its dennis green. Its dennis green. Yeah, let me just give you a quote of who you thought trump was, well, here we go. Its nfl like. Dennis green is exactly like this. Im asking my executive producer to play this. The bears are who we thought they were. Thats why we took the damn field. Now, if you want to crown them, then crown their ass. But they are who we thought they were. And we let them off the hook trump said he was going to build a wall, he said mexico was going to pay for it. Why is that a shocker . Its just when push came to shove, it was a little like green in he really meant it. Maybe what he meant was hes going to build a wall and the American Consumers going to pay for it through a tax. Well, yeah. We know from this is not look, im a little startled by this because all i know is as david has said endlessly if the agenda of lower corporate taxes and repatriation is whats on the table, its a lot of the reason why we need it to go higher. So suddenly i say to myself, okay, does he still have 50 senators after this . Well, well see. Listen, border tax adjustment is an important component and perhaps the most important component in terms of revenue raising in tax reform based on the blueprint we have from house ways and means. The paper on the wall. We have no idea where were going to end up when you get to the senate. But anything that has the potential to delay the timeline for this so that were sitting here three months from now still talking about the same things and saying, okay, its probably 18s business its going to impact the stock market. Thank you. Youre better than i am. You said it more dispassionately than i did. I am not better. Or smarter. The idea that deregulation moves to the front of the line because thats what the market is excited about. Deregulation is a problem. All the pipelines, do you know theres only two guys on firk. You need three in order to be able to speed up pipeline dereg. But they dont even have a core. How about they hold up the additional person for firk, you cant move the pipeline agenda. Im saying there are ways to clog the machinery here and the standoff with mexico i dont think is necessarily going to make it as easy with the agenda. So when you put this week one into perspective, jim, all the meetings with ceos, nafta, tpp, the wall all those executive orders. Dont forget those. Inauguration crowds, bannon in the times today. What is the net effect on the market, do you think . I think the net effect on the market is we got to go back to the fundamentals and not think that were necessarily going to have a fast track to much other than some deregulation. Pipelines. But pipelines need ferk, you have to have ferk agree and ferk cant have a. I had on last night they still have to decommission. I know the president called coal what he called it beautiful. The head of the largest Power Transmission company in the country does not regard coal as beautiful. So, i mean, its very hard. Theres i guess the whole because the agenda is necessary to get profits up and make the stock market go higher than 2017. Yes. Speaking of which lets get to some big tech earnings this morning. Microsoft posting better than expected Quarterly Results helped by cloud, intel driven in part by demand for the companys data services. Alphabet missed on bottom line but top line does exceed forecasts. Jim, you were tweetding this morning about why it should be higher. Oh, yeah sorry. Im sorry. Im sorry. Thats exactly how you tweeted too. Yes. Okay. So im doing mad money while the alphabet call is on. Im thinking this must be some call with ruth porat saying, im sorry, this is bad, this is bad, this is bad. No, so i go to the quiet of my home where i told the wife to stay away because i got to focus, i read that Conference Call and then listen to the Conference Call and said, oh, y my this stock should have been up 20, not down 20. Plus, by the way, you see the cash reserve . Did you see the cash . I did. I did. Whatd you think . They got a lot of cash. They have a lot of cash. Im still looking for that mysterious 320 million equipment charge. What was that . Boy, you focus boy, you really are a small thinker. I am . Yes. 320 million is a lot of money in the neighborhood i come from, my friend. Okay. Well, yeah. Im talking about the billions they have overseas. I understand what youre saying. And its a very large number. I think that your equipment there was a lot of onetime issues that mystified me including that one. Yeah. I mean even analysts are calling it mysterious. Even analysts, the lap dog analysts. Yeah. I cant believe they are a trump stock, trump stock, trump stock. So you do like the quarter . Yes. Comes to alphabet people say whats the multiple . 19 times. The bottom line was not particularly strong even though top line was. Will you ever see the multiple go up . Yes, if they diversify away from search. This is like this is like tim cook. If he decided to go into another business line initially it doesnt turn out to be great. But the fact is, david, we are not going to be talking about alphabet as a search company. Were going to be talking about diversified data play. Okay. That includes search. And a. I. Machine learning, david, artificial intelligence, this is google, amazon, wow. David, the Machine Learning thats going on. Ruth porat talked about Machine Learning over she did. I thought the quarter was remarkable. I thought people selling it didnt bother to listen to the call. Really . Remarkable. Yes. I will say two things, one is they are going to include stock based compensation in nonbase calculations. Thats a big deal. They use g. A. P. Yes. Microsoft does that. Good for them. Good for google. Yeah. Thats going to be a little dislocation there nongap suddenly going to include and then this interesting thing they didnt buy back any stock in the quarter. They said, quote, we were unable to do a buyback in the Fourth Quarter due to trading restrictions, but we do hope to get back into that. Well, but theyre spending a lot. Now, some people dont like spending why would you not buy back stock . Maybe because you were talking to somebody about buying them. I dont know the answer to that question. Im telling you. I know 22 growth is good. I know hardware is good. I thought the actual revenue what i care about, revenue growing three times profit, Youtube Content is going to be monetized, hardware, search, video, you have 19 p e, 52 billion overseas, 61 of their cash. l e86 billion overall in cash. I can see your notes over the shoulder. You said take notes, thats one thing i do. One writes in says you invented a new language. Sometimes you get plus i got the wife 20 price increase on the modelo here. Yeah, were watching constellation this morning. Well get to that. Well get to starbucks ceo Howard Schultz, a week into the Trump Presidency take another look at the premarket. Despite all the 20k hoopla, the dow has much less of a gain for the month than the other major averages. Half of the gain in december. Were back in a minute. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. I was born in a city they call the windy city lets get to the windy city, check in on the bond pits. Rick santelli at the cme. Good morning, rick. Good morning, carl. You know, the real reason they call it the windy city is because all the flap in the politicians over the decades. Thats the real reason. Anyway, lets get to the markets. We definitely had soft gdp. You could argue soft durables, but i will talk about this later today. If you take the durables and you dont look for the seasonal adjustment process and look at the raw data, it was actually pretty strong. And thats for later today well cover that. Intraday ten you can see how rates came down when the data started to hit. Look at oneweek of tens, not a bad week. Were basically hovering about four basis points higher than we settled last year. One week of bunds eerily similar, wouldnt you think . Except theyre under and were under 2. 50. Open the chart up to december 2015, that was the High Water Mark going back to 14, significant level. Keep the same date for all the rest of the charts. Look at bunds, hey, theyre going in the right direction now, a lot of room. But heres the money ball trade if youre looking at euro to impact rates and Foreign Exchange, look at the same date with our twoyear, now lets look at the euro twoyear, currently m ll lly minus 64. Thats the chart to Pay Attention to. If that starts to turn up more and mario draghi starts to cave a little bit, i think market inflation will force that, when that chart reverses youre going to see one thing for sure, a much stronger euro currency. Carl, david, jim, back to the gang. All right. Thanks so much, rick. Starbucks down in the premarket, the coffee chain posting Quarterly Earnings in line 52 cents a share. Revenues and comps came in below consensus. Also trimming their full year revenue guidance. Well have exclusive with Howard Schultz later this hour. Jim, this revenue guide eight to ten versus prior double digit, what does it mean . Look, this is something that unfortunatelys become a bit of a pattern in that we keep expecting an acceleration, a lot of this is domestic. The company has a twoyear whats known as stack thats still very impressive. The companys still got the fly wheel of many good things going, but ill ask howard about what i regard as a high quality problem which is mobile pay is kaudsing a throughput issue which i believe is causing genuine comp decline. Now, its a decline in other words, its a slowing of an increase. Its not an actual decline. Second derivative. Exactly. Chinas a great story. The reserve will be a great story. I can give you lots of great stories, but travel trust owns the stock. I am concerned about how if you budget to trend, socalled budget to trend, meaning if you just look at the trend of whats happening, then the second half turn they are predicting, i need more evidence. I need more evidence just to be able to say im not concerned. Just cant do it. I cant just say im not concerned. Fair to say your elasticity, meaning you stuck with starbucks through thick and thin. Since howard came back. Yeah. It would take a lot to shake you off of that tree, im assuming. Yes. But i am concerned that there are secular issues to the way people go out in this country. I also what does that mean . Well, i mean, look, ill give you a good example. If you just go to theres a Company Called breaker, this is chi chilis, that reported a disappointing number, this is a quote, we believe largely driven by the shift in retail traffic to online is starting to impact Holiday Shopping patterns play out. Stay at home. Is stay at home cannibalizing . This is the dominos theory. People are not going to the mall, theyre not leaving the house because they can do all their shopping at home. The traffic is down of people going outside. Now, look, i go to starbucks. And ive got to tell you my starbucks are jammed. But theyre jammed the wrong way. Theyre jammed at the pickup. Theyre jammed at the pickup. It reminds me of reminds me very much of panera. When mr. Recognized. Im mosh pitted at my starbucks. And i dont like to be mosh pitted because i feel like, wait a second, thats my third place. But as ron said because i love panera too, it doesnt have a great feel at the pick up. Well get cramers mad dash in just a moment. Dont go away. 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