Good thursday morning. We again this morning with a round up of this normornings biggest shares report. Southwest saw rising cost for fuel we talked about this the last hour it puts a lot of pressure, especially on our competitors because they toents hadont havw cost structure we have they are a lot more exposed to increased Prices Energy prices are up 20 over the last several months. That could translate into to more capacity restraint. Meanwhile dow components caterpillar 3m helping to lift the dow. You know the cap quarter in and out. Some of these bag locklogs are rising faster than they can make the machines with General Electric we have seen better than we expected the the caterpillar call is starting right,0 now 3m was much better than expected is that profit taking a surprise why do you take properties now with expensing, full expensing now on the hoe rrizon . Such a good question. Stocks are up. Traders saying the valuation is getting a stretch here well have to see what comes out of this call add well. The bar is getting higher and higher to hurdle for some of these industrials like c caterpill caterpillar. Markets watching the dollar as well. Continued weakness mnuchin claritied his comments Index Trading near the lowest level since 2014 in davos, he said you have to way the pros and cons. In the short term where the tlar dollar is is not a concern of mine theres benefits of where the dollar is and theres costs of where the dollar is depend upon which side of the table youre on im focused longer term where the dollar is. Its good to have you both. Oped making the dollar weak again. Its ultimately a fools game. Are we playing with fire here or not . I dont think so. I think mnuchin uttered what every previous secretary has thought and never said the fact is that in and environment where we have big trade deficit where we love the business and we have very little inflation theres noreason to believe a weak dollar will harm anything, at least in the near term looking at some of these industrial names, caterpillar being a perfect example. Stocks down. Is this a sign that equities are getting a little frothy here it could be a sign of that. In the case of industrials thai h theyve had a good run industrial Capacity Utilization is bumping up close to 80 the its getting to that point where companies have to start replacing goods because things start breaking when some of these companies have made or even exceeded expectations the stocks have slipped. I think theres a bit of concern that maybe higher commodity pricing might pinch their cost structures they have pulled back a little bit. This plain spokenness around the dollar, is that something that investors should adjust to that perhaps this whole administration will be a lot more straightforward saying some things that others were thinking i think thats what it is theres always been this sort of gentlem gentlemans game going on where theres rhetoric and then theres the whisper feelings going on right now perhaps its this administration its clear theres no filter test interesting we have rolled out the welcome mat to businesses world wide. We have taken our tax rate to the highest to just below average. Thats sending shivers across many of our trading partners the interesting thing is will they respond in kind will this be a race to the bottom to try to encourage business globally. We could see a huge move here. Thats something we want to watch. Taking a look at the tenyear treasury yield highest since the middle of 2014, how much is that a risk and especially if these rates continue to rise and maybe rise faster than expected a risk to the market its something investor should watch its tied to what secretary mnuchin has said if you see the dollar weakens that means that import prices go up that raises the cpi. That could lead to higher Interest Rates its something that could be good for financial services. Jack on your radar, do you have, are you looking for a 50 basis point move an intrameeting move a hike when theres no presser, things like that im not i dont think powell wants to bring the fed forward into the headline i dont believe the fed is controlling the tenyear treasury i think thats the ecb i think fair value, im not an economist but i would say fair value is probably 410 which is equivalent to nominal gdp. I would say thats going to start putting pressure on equity im thinking back, in davos earlier this week saying it would take a move like that to tip the equity markets over. It wouldnt take very much are you agrdisagreeing with tha . I would tend to disagree. We should be equally indifferent between the s p 500 and a ten year treasury. We have a lot of good things going fundamentally. That should continue jack, burns, nice summation of where we stand for now. Well see you next time. Amazon getting its most bullish call on the street in 1800 there are price forecast. The analyst behind that target will join us to explain. That debate is coming up later President Trump addressing trade and the economy from davos. Well take you there live. Stay with us barry murrey when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. We call that the golden hour. Evaluating patients remotely is where i think we have a potential to make a difference. barry murrey we would save a lot of lives if we could bring the doctor to the patient. Verizon is racing to build the first and most powerful 5g network that will enable things like precision robotic surgery from thousands of miles away. As we get faster wireless connections, itll be possible to be able to operate on a patient in a way that was just not possible before. When i move my hand, the robot on the other side will mimic the movement, with almost no delay. Who knew a scalpel could work thousands of miles away . Analysts have been sounding the alarm on what theyre calling softening demand for apples iphone ten samsung sent out an invite where it will launch its next generation phone the galaxy nine. The analysts really want to make this happen. Do you buy it . I talked to a lot of people you either love it or hate it. I happen to love it. I know a lot of people going i cant get anything to work it was the first smartphone in about five years that really delighted me its a big User Experience transition i think were so late in the smartphone cycle that for both apple and samsung getting people to be really excited is a hard thing to do. In the case of the fwguys that would like to have party around this, bummer from the galaxy s9, what do we expect . Others cant seem to get in this race doesnt that imply that apple is probably going to do okay with this phone despite what some of these channel checks supplier checks might suggest i think its the start of a new era of phones. Were talking about the cameras. Youre going to see a whole new wave of uses as we go to have continuous heads up display in our life i think its an kpietsing ti ex. Given the fact were at the beginning of this new wave of technology coming into smartphones, doesnt this get back to the case of why buy now when it will only get better with the next . In theory, the operating system allows you to buy whatever you want and keep upgra upgrading. The problem apple had a few weeks ago shows its harder to keep old phones going on the new software because of the threat the battery might catch fire i think the point is exactly right. Peoples behaviors are already deeply established we all use these phones hours day. If something give you augmented reality, youre going to have drop something or its going to take more of your day. I dont know where we are in that curve you dont pay much to sit in front row with happen l and wat watch what happens apple being very customer focused. Samsung, were feature focused by the way, google is watching everything you do when youre on the phone. I would tell people i think its a single if you can only own one stock, its the best with risk reward i think it probably out performs a bit in a bad market. I would argue that we havent seen our first premium sustained augmented reality hit. Pokemon gotalking about that anymore. We have the filters on snapchat. You dont really need that why havent we had one where people are like i have to get that one the first ten apps most were useless. Nobody could figure out what a smartphone could be. Were at that point with ar. As you get low cost glasses, everything changes we spend five hours day on our phone. Imagine the trillion dollar industry when we have heads up display as part of our daily life every day last year americans bought 80 million pairs of glasses for over 100 a pair they only had one app. Its all going to change theres a lot on apple. Theres a lot of amazon too. Stay with us the mayors of most cities are together in one place. Reporter theres no shortage of things of mayors of big cities to discuss. Theres the opioid epidemic. Theres tax reform for 20 cities Still Standing in the competition for amazon hq2, maybe a chance to do trash talking. Thats about to go away. Mayors confirming that amazon is insisting on confidentially as this process goes forward. That means less transparency mayors are okay. Its a very secretive process. Were continuing to do what we did last week after the announcement which is sell miami and broadcast to the world, not just to the United States that miami is the place to be for amazon if i were to lay out now what i think we should offer, it would be criticized and looked at and determined whether or not thats good or bad we arent really going to talk about whats on the table we have a frame work thats been in place thats supportive of our community and legislature to attract Technology Companies reporter some of the incentive offers have have been disclosed are mind boggling. 7 million from new jersey 5 million in maryland these hay yours are here fighting we have report cards on all 20 cities on our website. Our top states website. One of the things some analysts are writing about is to no narrow that list of 20 down to another smaller list is that a possibility and are mayors commenting on that reporter its a possibility but the mayors say they toendon know for sure whats going to happen next. We dont know if we will know about that publicly or if if next word well have from amazon is who the winner is scott thanks for this youve been covering the story since the beginning. The media is going so gaga over this process its a great vaccine for the company against this burgeoning tech backlash. I completely agree with that. It has to be one of the greatest pr moves ever. I dont know the shareshouldeelf amazon will win big out of this. At the end of the day theyll do something they were going to have to do eventually. Instead of it being an expense rngs th they are getting massive pr. Where amazon had some pretty clear traditional antitrust issues looming, this is a pretty perfectly timed piece of pr. Jeff bezos is insisting on secrecy to give him all these tax breaks for amazon. I feel dirty shouldnt there be a public discussion democracy dies in darkness. What kinds of public subsidies will two to drawing this company to any given city precisely were used to this in Manufacturing Sector and the energy sector. Youll see more and more job creators doing this as they want to have more clout in shaping our economy. Okay. Its the silencing of the mayors that concerns me. Its definitely a secretive proce process. Where do you see them settling i have no idea. We know where the power is in this country now amazons got wildly more power than any state or any city because it can put this decision out there and literally get 238 people running through the hoops. 20 now, or whatever in the next round. I love that d. C. And merchandise are on the list. Bezos just silenced those mayors sg we know who is in charge. Thats what makes it so difficult. You go at some point the country has to have a conversation is it appropriate that we always bend over when they come to town now everybody is tooled up they have their slide shows ready to go. They just put an app thank you, guys good to see you both today still ahead, the streets newest amazon will join us to defend his call. Why he says the stock will reach, get this, 1800 over the next year. As we head to break taking a look at stocks at this hour. The dow back near session highs. You can see right there bitcoin lower as well. We have more squawk alley coming up after this break. Well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. Still ahead, could bitcoin go to zero that debate is next. Taking a look another major averages stocks are up for the fourth time in five sessions. On track for a fourth straight positive week. The dow is up some 123 points at this hour. Well be right back. Alerts wouldnt you like one from the market when it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Here is your cnbc news update jim mattis is meeting with vietnam leaders. Mattis said the u. S. Will likely send an Aircraft Carrier to make a visit in march it will be the first suchpostw. They were greeted warmly by their south korean counter parts ahead of the two teams competing as one in the winter olympics. California authorities are allowing some residents to return home after mudslides ravaged the community. The slides killed 21 people. Officialsgradually allowing residents back into their home Rich Products cooperation issued a recall for meatballs over lis listeria concerns thats the cnbc news update for this house lets get back to squawk alley thank you. European markets closed about a half an hour ago the Broader Market now at a one week low you should blame it on the euro that just crossed above 125 for the First Time Since december of 2014 after ecb president surprised Market Participants with a more optimistic view on europes abilities to achieve its mandate of 2 on inflation he also made the case for maintaining the Bank Stimulus strategy an ample degree of monetary stimulus remains necessary for pressure to build up european bond yields are breaking up in reaction to comments we are seeing the move on the back of that boil mepolicy meetg fiat is closer to its growth target the idea fiat may need a partner has been put to bed. The spirit making siting sales driven by an increase in spending on marketing. The home of johnny walker, adding a strengthening uk pounds and in weaker uk dollars could weigh on sales and profit. That stock down on the day back to you. Thank you bitcoin continues to be volatile its about flat this morning depending on where youre looking. Theres been some talk of the crypto currency going to zero. A very fantastic, maybe a third chance that bitcoin goes to zero. That doesnt mean you cant have fun. Zero. What would it take to take bitcoin to zero . That sounds out rarageous to me. Its quite possible that another Technology Comes along thats faster, cheaper you know what i think about that, but who cares what i think. What do you think of volatility and the chance it could lose all serious value . I respect him and like him. I disagree with him on this issue. I dont think bitcoin will go to zero the reason for that is we have historical evidence. We have a Huge Community worldwide of all these holders who have in the community. Thats when the whole thing had much less attention and energy than it does today with that said, i think a good long term projection is that bitcoins market cap in the long term continues to rise its market share, as a percentage of total coin market capitalization continues to fall thats because there are other kinds of coins coming out. Bitcoin has a lock on the digital gold application for which longevity is important heres the problem i have weve had the visa ceo saying these accept bitcoin is the volatility they have also said that if bitcoin stays flat for a period of time, the people that have been buying it recently will get less excited about that should put some downward pressure on it is it for transactions or is it not . Definitely not anymore. Theres a few times that people thought it could be everything bitcoin is a pure digital gold many competitors is purely a digital gold at this point a piece about hedge funds trimming their positions in some of these crypto currencies one said his fund was 50 invested now versus 90 in december you could imagine what would happen if a viewer suggested the president came out with a tweak saying they were going to crack down hard on this. I think the way to make money is to buy low and sell high. If you bought in december and sold today, you bought high and sold low thats probably not what you want to do in so far as hedge funds, i think smart thing to do is if you think theres a direction coming then you hold your capital and be ready when that happens. Regarding the president making tweets about it, my guess is good as yours on that. All of the arguments or most of them about why bitcoin is changing the world has to do with what is transactions. Im concerned about the idea that now its solely supposed to be this store of value with little to no use for transacting. Arent there so many other things that you could do to store value versus put it in Something Like bitcoin if thats what its become theres a good impression it is really the best value out there. For bitcoin it might take an hour or so it doesnt have the other aspects might also say why not hold like a billion tladollars in cash. Its realtive to gold. Relative to large amounts of cash bitcoin is a good store value and you can kind of show that. Its an evolving case a lot of people still making it. Thank you for joining us thank you as you know by now the president has landed in davo and begun meetings at the World Economic forum good morning, michelle reporter President Trump is in middle of his packed agenda here in davos, switzerland in a room full of prime ministers, president s, billionaires and ceos. The crowds were crazy. Lots of pictures the room is full of people who are used to being treated like that when they are in their home countries. No matter where he goes, a lot of people just cant get enough of him even in this very high powered crowd. On the schedule for him bilaterals with the uk, rowanda. Now hes doing an interview this youll see tomorrow morning. Hes doing the closing keynote speech tomorrow afternoon which will happen in the middle of squawk box we expect him to curve his America First image slightly and hear him say America First does not mean america alone he also says america is open for business and will talk tax reform in the United States which is a very hot topic among all the ceos here. I do believe youre seeing tax reform in the u. S. And a expectation the money will glow back in the system even trickle down glow bally its important for attracting capital. Youll have to respond to the u. S. President s initiative and congress initiative. Absolutely you have to be competitive global ceos, tax reform has really changed their thinking and theyre thinking about doing more investment in the United States reporter another key topic also, how to deal with the backlash against technology. Weve taken the motion of ai and attached this negative idea that it will take away a bunch of guys. If historys a guide it will be first time its the first time we continue to operate and continue to invest look over the history, it takes society somewhere from 10 to 20 years to figure out how to regulate and how to societize changes. Youre seeing the economy in regulatory world that will reck a react to the technology world. We are going to have people in jobs that will not exist 10 to 15 years from now we have to develop an economy that will make sure those people have training. Make sure those people have some transition in their lives because Artificial Intelligence will be something very powerful. We hope to hear some of what President Trump told joe later on today tune in for that and you can see the whole interview starting tomorrow morning, 6 00 a. M. On squawk box back to you. Thanks michelle as we head to break, taking a look at shares of caterpillar. Its been a volatile day after a earnings baets shares are now higher up almost 1 the Conference Call going on now with executives say moving away from providing sales and outlook range as the strategy is focussed on growth due to the cycle. All this leading to 1 gain. Hi im joan lunden. Todays Senior Living communities have never been better, with amazing amenities like movie theaters, exercise rooms and swimming pools, public cafes, bars and bistros even pet care services. And theres never been an easier way to get great advice. A place for mom is a free service that pairs you with a local advisor to help you sort through your options and find a perfect place. A place for mom. You know your family we know Senior Living. 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Com today to learn more. If you cant afford your medication, astrazeneca may be able to help. The dow hits another record high today well debate whether big cap stocks will be the biggest winners this year. Our call of the day is a big prediction on whether amazon can sort to. Is that possible wait until you see the number. Five years ago today, the brawl that started it all. Well look back at that day and what has happened since. Well see you in about 15 minutes. Morning, rick. Good morning. I like to welcome my guest thanks for taking the time, peter. Always fun. We had marios big day today. I think mario starting to perspire a bit we have done the trump jump on november 8, 2016 we followed up with tax reform we lowered the cost of capital others have been helped in a great way. Now its the moment of truth they have to speed the sometitin up is the strong euro going to keep inflation at bay i dont think he wants to but its a question of whether hes forced to. I think today hes saying that its going to end in september negative Interest Rates that process will begin to end in the beginning of 2019. All things being equal and an over simplified view, isnt inflation going to be possible on this side with the weaker dollar than on the euro side with the stronger currency yes, the stronger euro will help mute it but theres still Rising Inflationary pressures there nonetheless. Yes, we will feel it here the most thats one of the problems with this acceleration in down side of the dollar. The media is making this seem like mr. Mnuchin and everybody incited to sell off in the dollar it was the big feature of 2017 really nothing has changed, has it a year ago the administration implicitly endorsed a weaker dollar just coming out and saying it is something we have known already. I agree it is unusual. Isnt it especially true for those of us students of the markets that theres not really a lot the treasury secretary can do in the immediacy of the way the markets are trading in that regard yeah, the Foreign Exchange trade 7 trillion a day when youre talk about the path of least resistance when you have the treasury secretary endorsing this move, it will accelerate it. At the same time theres or ordinary pressures on the dollar to begin with. Its very interesting efb everybodys hair on fire with regard to trade policy pragmatism also seems to win over bluster thank you for joining us today back to you. All right thank you, rick. When we come back the biggest amazon bull on the street is with us. Why he thinks that stock can go up another 24 from here also, hitting highs on the dow it is up 162 points. Well be right back. The rally has resumed on the street, dow is up 162, 3m adding 54 points. Squawk alley continues in a moment welcome back to squawk alley. D. A. Davidson out with a note this morning on amazon, taking its price target to 1,800, the highest on the street. For more were joined bit analyst behind that note, tom forte. Thanks for joining us today. Thanks for having me on this implies 20 to 25 upside to amazon stock. Make your case sure. If you look at amazon, their Fastest Growing business, Cloud Computing effort, aws, is their highest margin business. To the extent theyre able to retain a high growth rate for that business, their shares continue to perform well thats the basis for my 1,800 new target on amazon how closely are you watching or i guess estimating growth in the prime subscriptions . I know they dont actually release those numbers, but what are your expectations . Sure. So i think within the u. S. , their prime subscription base is fairly well saturated. Theyve done a lot of interesting things, when you think of their Monthly Payment offering for prime, College Student prime, prime for parents, things of that nature so its about really i guess getting the prime customer to spend more at amazon theyre doing a lot, you know, we know what theyre doing with grocery. We know what theyre doing with apparel. And then some businesses related services, potentially pharmacy, things of that nature. I would say the growth today in prime is more about getting the average consumer to spend more money with amazon, which is where the grocery efforts and apparel efforts are very important. And tom, weve got mayors meeting in d. C. Right now, really looking to compete for the new appears hq2. What do you expect, where do you expect that to land and what will it mean for shareholders, if they see tax benefits or other benefits thrown into this ultracompetitive bidding situation . Im glad you mentioned washington, d. C. I would call it the future home of amazons Second Headquarters. To me what amazon is doing here with these requests for proposals, they had 238 originally, theyve whittled it down to 20 its all about influence, how better to have influence than to locate their headquarters outside of washington, d. C. . Suburban washington, d. C. , i see those locations to have the greatest likelihood of being selected for the Second Headquarters we dont get a lot of use on alexa use, the margins around that margin. As morgan mentioned, we dont have hard numbers on prime how much of a concern is amazons investment in that area or do you just look at the top line and how its fueling overall growth sure. Basically i feel like were all lab rats in amazons lab and what theyre basically doing is training us to use alexa to buy products so a lot of investment spending. Theyre likely selling the echo devices at breakeven. But the idea is to get us i think natural search with voice, its very easy to do but now training us to buy products on amazon with alexa. Its investment spending by amazon that will ultimately bear a lot of fruit lord knows, tom, amazon has its hands in a lot of different projects, we could probably spend five minutes talking about all of them. Were going to wrap it there, we have earnings after the bell on thursday thank you for joining us thank you for having me speaking of amazon, kroger is up, rising on reports that it has held early stage discussions with alibaba about working together and amazons recent purchase of whole foods could be fueling those talks. Nobody knows more about the space than panera founder and chairman ron chaikin i spoke with him on fortt knox live yesterday. I think it will make a huge difference, it will change retail we all know that retail will be a way to move product with a lower and lower labor component. There hes talking about amazon go, those new stores that amazon is out with you can check our whole conversation on forttknox. Com hes more candid now than ever, arguably he still wont talk about what jab specifically is working on of course they have keurig and einstein bagels and other stuff. Hes working with them meanwhile, a busy night with starbucks. Well talk with Kevin Johnson on the 9 00 a. M. Tomorrow well have Western Digital intel. Intel with all of this meltdown and spectre controversy. They said it wont affect their earnings buckle up, well see you tom. Lets get to the judge on the half. Welcome to the halftime report. Im scott wapner big bang theory. The dow higher on earnings, surging in fact. Is your best play to stay with blue chip stocks as the rally rolls on joe terranova, pete najarian, Jim Lebenthal are with us. The dow, once again, those big, widely held names leading the charge, caterpillar an