Good evening, everyone. Im larry kudlow. This is the kudlow report. Were live here at 7 00 p. M. Eastern and 4 00 p. M. Pacific. Stocks had a good rebound today. S p 500 rose 20. The u. S. Economy about 3. 2 in the fourth quarter. About 3. 5 for the second half of the year. Its got some momentum. Lets see if our guests have any momentum. Lets get right to the big market panel. Good news is good news. Joining me, cnbc contributor dan greenhouse, global strategist. Jeff killberg here in new york, kenny with the neil securities. I cant wait to get to him. And cnbcs own seema mody. Seema, before i go to my pal for his throw away pessimistic card, can you tell me what happened today . Clearly a lot of i htraders ready to buy the dip. It was one of the sectors hit hard by the recent selloff. Second is better than expected earnings from the likes of facebook and google. Within health care, its pharmaceutical companies. On the flip side, the u. S. Dollar continues to see the flight to safety. Absolutely. So bullish. Kenny, did i read that right . You heard seema, the dollar is surging. The economy is rising. Profits are growing. Now, im not timing this. Right. Im just saying this is good news and good news is good news. Good news is good news. But listen, lets not forget, the market has had this great run, right . In anticipation of what this good news was going to be. And in fact now youre getting some good news but yet the market is not necessarily got this real strong conviction that it wants to move higher, right . So i think what youre going to see is the churning. I agree with you. The economy has to catch up with prices and i think thats what youre seeing now. Weve been stuck in this very tight range and were going to continue to be so until we work it through. This is great stuff. Dan greenhouse, this is another thing i disagree with. Im looking at todays close. S p at 1794. Im going to put 120 a share as earnings for the next 12 months. That gives me a multiple of 15 times. That gives me a forward earnings deal of 6. 7 compared to a bond thats only 5 vaa. I think the valuations are great. I think the improvement in the economy comes as a bit of surprise. People were losing faith in that. Whats your take on this . Should we all just z out now and wait for it to happen . Far be it for me to agree with any other guests that im on with. But with respect to evaluation, i think youre somewhat right. I think clearly our view is that stocks are not super unattractive but then neither are they super attractive. It corrected what we thought was a somewhat attractive market. The question, again, Going Forward is not whether stocks are attractive. They can go down when they are and can go up when they are not. The question is, what are the fundamental drivers Going Forward and to kennys point weve gotten good news and id like to see more good news, which is ultimately higher prices. Jeff, were Getting Better news. I agree, we have to see the jobs and the jobs numbers are going to surprise on the upside when they come out because last months jobs numbers were flukey. Whats your take on this story . Your optimism is infectious. Hes a great american. But listen to him. You know, my dog just had a birthday today. Lets be cautious going into the jobless claims. They uptick a little bit. Technically we saw this momentum that seema was talking about. I think now we have a technical resistance in the s p, about 1805 and then its a sigh of relief. It was very encouraging to see. I want you two to go at it. You went to notre dame. You played football. Youve got some real backbone and playing power. I want you to show mr. Paul carey what youre made of. You know, you probably had some sick customers but i think you have to realize, yes, a pull back here is 4 . A lot of folks were talking about 4, 5 . But to your defense, i cant believe im making the argument for you, were seeing the s p down 3 . Up 26 . So people are still leery and kenny, youre wrong. There you go. Listen, i dont suspect that youre going to have this crash. Im not calling for a 10 or 15 crash. Not at all. I think 5 or 8 . If we test at 1765ish, because weve tested it two or three times in the last week, its a very good sign. Its going to give a place for stocks to churn a little bit. 1765 is the old multiyear alltime high. Weve talked about tech before. Is that the buzz now . Tech is posting one of the highest Earnings Growth rates for this quarter. So, yes. But i think the emerging market story is in focus, especially the impact that the volatility in the emerging market will have on multinationals. I totally agree with that. Especially with a stronger dollar. You have to think about how it makes these companys products and Services Less competitive overseas. But also lets remember real quick that to the extent that this remains contained, the em story, that is, this is ultimately going to be a blip in the radar. If this doesnt spread to china, russia, to brazil, then this is a couple of peripheral i think we see how susceptible the market was to the em stories. We sold off 4 . This is the achilles heel to my optimism. Brazil is a mess. They dont know what the h lech ell to do. Turkey is imploding before our eyes. Now, this is i admit, its the achilles heel. Inflation problems and that spells emerging market recession, dan greenhaus. This is the part that bothers me the most. Larry, let me ask you, what percentage of the s p 500 profits are generated in turkey . Well, i dont know. I dont either but the answer is very little. Theres contagion going on in the emerging markets and you have to aggravate this. Half of the profits come from overseas. I know europe is a bigger krcch but im going to say not less than 10 . Particularly in a commodity boom, which we dont have right now. People pick up the paper, whether its the wall street journal and realize and these countries are not doing well. They are moving away from market capitalism. Thats what bothers me, dan. On that point and only that point i will acknowledge an agreement with ken polocari. Let me quickly, before jeff jumps in, make a jim cramer point. Jims been on tv for the last two or three days making a really important point, which is that weve had problems in turkey before. Weve had problems in venezuela before. The philippines, thailand, russia. And ultimately when push comes to shove, to the extent that this does not impact earnings for the u. S. Economy, the ultimate path for stocks should be higher. If it passes, youre absolutely right. Go ahead, ken. It will pass. But think about this. Were having all of these problems and at the same time that the fed is starting to what is going to happen in the short term. What are the concerns and headwinds and as seema said it and as weve all said it, the emerging market story can it be that contagion . I want to talk about this subject, about the fed, and they are buying fewer bonds. The qe is going to be done by the summer or early autumn. The end of the year. The end of the year. Fine. Handwriting is on the wall. Heres my point, and i want everybody to jump in. There is so much bloody money around. Theres so many excess reserves laying idle at the Federal Reserve. They get a 25 basis point. That a small tapering theres 2. 4 trillion excess reserve. Monthly withdraws, they are not even withdraws. They are cutbacks. They cant possibly affect the liquidity. It doesnt get affected until the fed starts selling bonds and raising the fed funds. Thats right. Thats got to be a ways away. Im not worried about that. Its about the perception that happens to emerging markets. I think it was the president of turkey today turned around and made the comment about what do you mean the fed is not worried about the emerging markets . They were happy when they were cutting rates and bumping all of the money and all of the money went to the emerging markets and now theyve got to pull out. So they are themselves getting nervous. Seema, ken is backing off already. Its Interest Rates that really scares the streets and thats why there is that negative perception when it comes to rates from the small the emerging countries . Or even our rates rising here in the u. S. Really . And the effect of tapering taking place. Hang on a second. All right. Good point. What if median and longterm environment i think right now the u. S. Bond market is way too expensive. The tenyear treasury at 270 is way over valued. The thing should go back to 3. The economy is decent and its on its way to 4 . This is an important point. I would be a seller of bonds and a seller of emerging markets. Larry, i love you but i want to push back. Push back. The fed, in theory, thought if they began a taper what is going to happen . The asset class that they pumped up, equities will come back and force people to naturally buy treasuries because they have been the biggest buyer of treasuries. Bingo. So this has been a wonderful proof in the pudding so they are tinkled pink right now. Nothing to do with it. They are not losing the long end of the curve. Exactly. They never had the long end of the curve. Im going to challenge. Look, the economy has the long end of the curve. Thats correct. That is the deal. The Federal Reserve is a not so innocent bystander. What im saying to you is this. Im go to dan greenhaus, mr. Famous economist. If in fact the economy continues to grow above 3 and youve got about a 1. 5 inflation rate, so lets call that 4. 5 money gdp, thats when your tenure has gone. Its gone to 4, 4. 5 . Whether the fed likes it or not, the market is going to take it there. This is a little respite. This is a respite. You want to get out of the bonds, sell them right now. Listen, in a Perfect World i totally agree with you and generally speaking i totally agree with you. The one hiccup in that is that were not in a normalized environment. The threat is not returning to higher growth, higher inflation but the inflation upon the completion of the feds qe program will take hold again and Interest Rates are down, not up. I dont agree with that, but no. Totally wrong. Ken polcari, when are you going to buy . Last word . I would buy down the weakness. I think its coming. Jeff, what would you buy . Im waiting for the treasuries to be range bound but i think were buying at 1730. A little more pessimistic. I am. Theres volatility. The vix ended up uneven. Thats a sign. I did my best, folks. Dan greenhaus, ken polcari, seema mody, jeff kilburg will join us later. Look at this mess because of two inches of snow. Everybody is blaming the city because of the total lack of preparation. Well go to hot lan ta next. And barber is working with a group but my friend opposes that. They will both make their case. As always, dont forget, free market capitalism is the best path to prosperity. I think Immigration Reform would add to the gdp and probably create a thousand new businesses in this country. Im kudlow. Well be right back. [ tires screech ] [ car alarm chirps ] [ male announcer ] we dont just certify our preowned vehicles. We inspect, analyze, and recondition each one, until its nothing short of a genuine certified preowned mercedesbenz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedesbenz dealer for 1. 99 financing during our certified preowned sales event thh february 28th. Preowned sales event nwas the most watchedage otelevision event ever. S so, whats next . The upcoming winter games from sochi. Where every second of nbc universals coverage will be available on every device. On tv, online or streaming on the nbc sports live extra app. Beginning february 6th, experience the winter games everywhere. Welcome to whats next. Comcast nbcuniversal to normal after a surprise snow caused huge traffic jams, left people stranded for hours. Nbc news tom costello is live for us. Good evening, tom. Reporter hey, larry, theyve been playing your theme song down here, ice, ice baby. We had 2,000 abandoned cars all over the city. As you know, tuesday night into wednesday we had tens of thousands of motorists stuck on the neighboring streets and highways. Buses picked them up and parents couldnt get to them either. And there is a thin layer of ice. Today it was the focus was on what city and state officials did or did not do. And in particular, the governor today made a deal essentially said he delivered a mea culpa. He apologized and said the buck stops here with me. The state did not prepare adequately. Saying that they had given them ee re erroneous information. Again they were warned at 3 30 in the morning for atlanta, what we learned today was that the governor either didnt notice or pay it attention, wasnt listening to any of those warnings until ten hours after the first one went out and his Emergency Operations manager and he were asleep on early Tuesday Morning as the warnings were growing more and more dire. So today the question was, why did this government plan to fail, so far behind the eight ball and then take so long to recover. They promised that they were going to do things better next time but made the same promises three years ago after the ice storm of 2011 and a lot of people here dont believe them anymore. Back to you. Who are the local papers blaming . What are the editorial pages saying . What is the constitution saying . There is an editorial in the journal constitution which has a picture of or a cartoon of both the mayor and governor making snow angels in the snow. Essentially accusing both of them of being totally distracted and out of it and not paying attention to the needs of the constituents. Great report. Tom costello, nbc news, thank you ever so much. Now, seema mody is going to join us. Shes got the latest profit reports from google and amazon. Remember, the report from facebook helped turn this whole market around. Is there going to be more good news this evening . Seema, next up on kudlow. This was the hardest decision ive ever had to make. Jim, i adore the pool at your hotel. Anna, your hotels have wondrous waffle bars. Ryan, your hotels robes are fabulous. I have 12 of them 12 . Shhhh, im worth it. What im trying to say is, its so hard to pick just one of you, so im choosing all of you with hotels. Com. A Loyalty Program that requires no loyalty. Earn free nights worldwide with hotels. Com lifes an adventure and it always has been. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than 4 hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. Seem ma muscular dystrophy dee has the results from amazon. Its down 5 after hours. Earnings coming in at 51 cents a share. Thats a big miss. 15 shorts short of estimates. Higher than last year but amazon Sales Guidance also disappointing the street. Now lets move on to google. The consensus estimate was 12. 20. Sales of nearly 17 billion came ahead of the estimate despite a drop in online ads. Shares for google are up rebounding right when the numbers came out. Larry . The obvious question for me is why. You said drop when they came out because they were sure and then bounce back . Has anybody got a theory . Were still getting a readthrough from the conference. Well get the answer. Maybe theres information that is very positive. Yes, absolutely. Seema mody, thank you. We have former governor mississippi Haley Barbour and bill crystal who thinks that republicans should steer clear. They are going to go at it next on the kudlow report. Fifteen minutes could save you fifteen percent or more on car insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. Nwas the most watchedage otelevision event ever. S so, whats next . The upcoming winter games from sochi. Where every second of nbc universals coverage will be available on every device. On tv, online or streaming on the nbc sports live extra app. Beginning february 6th, experience the winter games everywhere. Welcome to whats next. Comcast nbcuniversal first up, president obama called for reform during the state of the Union Address and republicans are at the gop retreat including things like Border Security measures, entry exit and path to legal status. If we go back to the day after the 2012 election, i said its time for the congress and the president to deal with this very important issue. Its been this problem has been around for at least the last 15 years and its been turned into a political football. I think its unfair. So i think its time to deal with it. But how we deal with it is going to be critically important. All right. How we deal with it. But while Speaker Boehner says now is the time to tackle immigration policy, not all republicans agree this critical Election Year is the time to take it on. So lets talk. Great friend, bill crystal, founder and editor of the Weekly Standard and Haley Barbour, former governor from mississippi and head of the Republican National committee. I heard that youre against Immigration Reform. I was stunned at this news. You, a pro growth reagan guy who understands the beauty of coalition. I was absolutely stunned. More than that, i was wounded. So i must begin with you. Why are you opposed to this . I know its a shock, larry. Its hard opposing you and haley and Mike Bloomberg and murdoch and longterm unemployment. Im not against