Airlines flying into russia. I threat over terrorism in sochi while the olympics are going on. Thats beginning right now on the kudlow report. 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. Even though it was a quiet day for the dow, still a lot of worries for the stock market in general. The economy, the weather. Sheila is joining me with the details. Good evening, sheila . Good evening, larry. Old man winter is striking again but first lets talk about the markets. Gains and losses ending the day modestly lower. The s p is off just three points. Some key Earnings Reports after the bell. Disney higher after handedly beating expectations. Thanks to hit films like frozen, different story for twitter slipping nearly 16 in the after hours after the very first Earnings Report as a public company. Headline numbers like sales and profits beat expectations but user growth was disappointing, up just 3. 8 from the previous quarter. Dick costolo said new features will eventually attract more users. Finally, weve got to talk about the weather. Its cold and snowy and it could be affecting the economy. Four out of six Major Economic reports cite the weather and worse than expected is ism manufacturing, auto sales, and adp employment report. The big question is, is the weather really a reason or is it just an excuse . Well, that is exactly what we are going to try and explore. Sheila, thank you ever so much. Now, can extreme Winter Weather take the blame for the economic slow down or were we all just a little too euphoric in the Fourth Quarter of last year . Lets talk. We have two of the best. Joel, the chief u. S. Economist at deutsch bank and david, former Deputy Assistant treasury secretary. Good evening to both of you. Let me start with joe. Steve liesman is saying that this is actually one of the coldest winters on record. 15 to 20 major cities have record snowfalls. Does that satisfy you as a reason for the lousy numbers coming in in january which, in turn, have helped drive stocks to a 5, 6, 7 correction . The weather has been bad, larry. Its clear that its inhibited economic activity. It has hurt some january weather but were going too far in blaming everything on the weather. January typically is a month where the weather is very cold. Cold weather itself does not determine economic activity. And the seasonal factors that the government uses anticipate a lot of seasonal weakness. For example, when you look at employment, the seasonal factor or the plug that they use to adjust the data is 2 1 2 times larger than any other month. So the weather is bad but i really think its gotten way too much play. Well, wait. Let me follow that before it gets to dave. What are you thinking is going to happen in the Third Quarter . I want to know your jobs number for fry because if youre saying that the weather has gotten too much play, then i think if you look at these weak reports, the ism services was pretty good today but the other reports, starting with the jobs report a month ago and circulating through the ism manufacturing that us kaed a big selloff, those reports were lousy and those reports, therefore, suggest that the economy is deteriorating because, in your view, its not weather. Larry, its not weather but ive been very bullish on growth. Fourth quarter growth, i had well above three and people thought it would be less than 2. Private gdp rose 5 . Were going to get some payback in january and march, meaning were going to get recovery in activity. And for friday youre probably 175 and if not for the polar vortex, be it 250 or 300. The economy is driven by fundamentals, not by temperatures or precipitation. Dave, lets talk about fundamentals. One other explanation, besides the weather, is people got very excited about a 3. 5 half second quarter. Third 4 in the Third Quarter, 3 plus in the Fourth Quarter. Why would this economy take off . Whats behind it . The trend line has been a lousy 2. 3, 2. 4 . A lot of people think thats the longterm trend line now. Some call it secular stagnation. Why is the economy all of a sudden going to jump up like mexican jumping beans . Larry, im worried that it wont. I think the consensus has gotten very strong at year end. So you saw the imf raise its forecast to above 3 and the reality is, Business Investment is still weak. Housing is not really kicking along or adding very much. In fact, in the Fourth Quarter, residential investment was actually a subtracter from the gdp number. So i think weve got a lot to get through in 2013. So im in a mode of, say, what i call waiting for growth. Be convinced that growth is actually accelerating and i think thats what the stock market has been worried about. The consensus has gotten too high. I basically agree with you. I think the stocks are correcting. But let me ask you another thing. Im still trying to find out id love to see 5 or 6 growth, which is what youre supposed to have after a deep recession that we never had. But dave, let me raise this point. We got a report yesterday from the cbo, congressional budget office, about losing 2. 5 million jobs in the last ten years because of obamacare. Which i still believe is a wet blanket over the economy. I think it stops hours work, higher tax rates because you have to pay more for these plans. Where is that going . Why wont that interfere with this economy . Yeah. Well, it will and it has been doing that. I think its one of the reasons for the weakness. I think the fed is another reason for the weakness but on health care the key thing i think is how do Small Businesses react . And we dont know what our Health Care Costs are going to do in june because were on a july through june cycle. Thats uncertainty in the outlook so you hold off on waiting to hire and wait and see how that is going. So my thought, larry, is that around the world were in kind of a steady enough position. I dont think the emerging markets are totally collapsing other than in your friend argentina. But i tried. I tried. But the actions i try to do everything. I try. I try to dollarize it. I try to premarketize it. We would love to see them work better. I think that would change the outlook if we got anything anywhere. Joe, i would love to see bold action by american leaders regarding economic growth, like abolishing the corporate tax. I want to ask you this. Something that charles said yesterday. He knows a lot about emerging market countries. A lot. Okay. He warned about turkey. Not argentina. He knows argentina is going down. The whole world knows that argentina is going down. But if youre being looking for another greece that would affect the markets in a systemic way, hes worried about turkey and theres a lot of business with turkey and i want to know if the turkish collapse, if it happens, is going to make a turkey out of the u. S. Economy. You havent named anything about emerging markets yet. I havent because its shy in many respects. But i disagree with you or what charles was saying on a systemic nature of things. 97 or 98 is the Exchange Rate in these countries is not fixed. Its moved over 70 from where it was. Theres a natural ee kwil equilibrium and its not going to derail the u. S. When growth was strong in the second half, created 8 trillion in household net wealth and youre right, larry growth should have been 6, 7 after the recession ended so were getting 3 to 4. But the point s. The Cyclical Properties of the u. S. Are Strong Enough that were going to get better growth than people think. You have higher premiums coming down the line, youve got employerbased they are going to cancel health care. You know what, the whole setup here as we talked about yesterday and the wall street journal wrote this morning, this obamacare plan plays you not to work. Youre not working in order to keep your subsidy and entitlement. That cant help this economy. Larry, its not helping. This is the amazing thing about the u. S. Economy. You have bad policy, you still get growth, best performance last year since 05. Imagine if you hadnt raised taxes so much and we had a more probusiness, progrowth policy how much better we can do. Were still getting better, thats the thing. You have to wait two more elections. Ill say this, gentleman, the one thing im watching very, very carefully is Business Investment, total fixed Business Investment. Its not done very well and did better in the second half of last year. Its not done very well. Thats your biggest job creator. Well see how that does. All right. Joe, david, thank you, gentlemen. We appreciate it. Now, this story was the big talker of the day. Drugstore giant cvs announces it will stop selling all Tobacco Products. Well, wont that cost them big bucks . What this means for their image and bottom line. And more and more patients are not going to their doctors offices and when they do, they find out they are not even in the obamacare network. Plus, it doesnt pay to work, as i said before, if youre in the obamacare system. Dr. Bill grace is going to join us to parse through all of this and dont forget, free market capitalism, still the best path to prosperity. There isnt an ounce of free market capitalism. Im kudlow. Please stay with us. Well be right back. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. 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Its the right time and the right decision to remove cigarettes and Tobacco Products from our store shelves. The move was hailed today by the white house and health advocates, including the American Pharmacist association which has pushed pharmacy chains to stop selling cigarettes. Cvs says it will mean a loss in sales in 1. 5 to 2 drop but the move will be positive long term. They are going on a large marketing plan for the cessation of cigarette smoking. I think that will drive traffic into the store. Walgreens is evaluating their tobacco sale policy. Dollar stores have gained market shares when it comes to Tobacco Sales. Other products like ecigarettes is not sold by cvs. As for alcohol and sugary drinks, cvs says those can be ingested in moderation without impacting health. Cigarettes cannot. A big story that will certainly have an effect on all of the peopled intoing into russia for the Winter Olympics. Were talking about a special advisory from u. S. 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Authorities believe the flights that could potentially be involved here are flying outside the United States to points inside russia. So no flights from the United States to russia but from other countries to russia that is the warning area here that they are focused on. Also, spoke to the National Security council at the white house. They put this in the context of overall cooperation between the u. S. And foreign intelligence and Law Enforcement partners. They said if they had any information at all, to tell people that its not safe to fly to sochi for the olympics in russia, they will update that through normal state department channels. Again, no update on that. Back to you. Eamon, let me ask you this. Hes gone. Sorry. Many thanks to eamon javers. The obamacare nightmare is hitting doctors and hospitals. Many people are going to the same office for Health Care Obama to find that their providers are not in the obamacare insurance network. 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Its providing access to Health Insurance to millions of people who didnt have it and is giving families across the country and individuals across the country the freedom and choice and opportunity that they lacked before it passed. All right. So, thats the white house position. Obamacare offers greater freedom, choice, and opportunity. Thats really the case, then why are so many people having difficulty finding a doctor or hospital that will accept their new obamacare insurance . Sf sf plus, if you sign up for obamacare, it doesnt pay to work anymore. Thats a wet blanket over the enti entire economy. Here to talk about it is an attending physician at Lenox Hill Hospital in new york. Lets start with a feud that is my favorite. Senator doctor tom coburn signs up for obamacare. His own oncologist treating his Prostate Cancer is not on the list. Hes fortunate to be able to pay out of pocket. A lot of americans are not. Americans are living 60 are living paycheck to paycheck. There are three shocks here. The first shock is their premiums are up 50, 60 . The second is their deductibles have tripled and thats causing these people not to be able to meet their payments. I mean, are they going to be able to buy a car or have disposable income . I dont think so. And on top of that, remember we talked, larry, a few weeks ago about the front end, which was a disaster, the back end disasters. Were getting now back to the back, back end. Right. Where this is where the actual Decision Making signups by the actual people. Being okay. This is interesting and very important because were getting stories like senator coburn popping up all over. Some people are saying that one reason why doctors and hospitals are not in these programs is because of cost savings. They have to meet all of the new mandates that in fact this is being looking like medicaid, which is basically free, gives virtually no reimbursement and most american doctors dont want to be part of it. Is that fair . Is the whole thing starting to look like medicaid . Its not supposed to. No, its not supposed to. But it being looks a little bit like a little better than medicaid. But medicaid is so bis