Have set new alltime highs today with corporate earnings sending some mixed messages to investors. And the target miss rippling through the market, were seeing some take a hit. Joining us for the full hour, paul hicky, cofounder of the spoke Investment Group do you see any interplay between these big stories that were watching today so i think combined, they play into themes that weve been looking at coming into the year. So the pros and cons of the market heading into 2020 now, were pretty much evenly split. And the target could be a sign that maybe the economy is a little bit weaker than people are seeing were seeing weaker than expected data. On the positive side, were seeing the market continue to hit new highs. And the number one positive we look at is dont fight the tape. When we see new highs like this, you dont want to fight the market and trade is important its not necessarily a positive or negative, but at least weve got this behind us and theres very little in the way of expectations for this phase two that were looking forward to as its been pushed out to pretty much the election, no one is expecting much until after the election now at this point. Paul, well get back to you shortly. Lets drill down on the three big stories. Wilfred is covering the Bank EarningsCourtney Reagan has details on targets disappointing holiday sales and kayla in washington with more on todays trade deal signing. So bank stocks are selling off today despite another set of earnings beats, with some qualifications bank of america had a light beat on top and bottom, but showed Interest Rate sensitivity more than yesterdays earnings reports. The margin declined 7 basis points, and jpmorgans only fell one basis point. Importantly, the stocks started slipping when the cfo said we could expect the nii in the first two quarters of 2020 to be a bit lower. Goldman sachs had a big revenue beat a reported eps miss, but a sizable eps if you strip out a litigation charge of 1. 1 billion based on various conversations with sources, they are close to a settlement on the one scandal. The other qualifying factor for them was that the main part of the beat came in Equity Investments and trading, both of which can be seen to be lumpy or temporary. But the key reason for the interday recovery were because expenses were only because of oneoffs and provisions were only because of strong growth in the apple card as opposed to specifically bad loans you have to say as well for gold man, given the setup they had coming into this, and theyre outperforming the other banks by 2 , its an impressive quarter for them. And it does seem that they have been able to manage around the lower Interest Rates by focusing on other parts of their businesses. Theyre not as linked to the Interest Rates as the big retail banks, a great comparison with bank of america versus Goldman Sachs. Its certainly as well for the quarter their higher exposure to equity markets and the Equity Investments area and fixed income trading played into their hand somewhat. But the longterm proof of where investors like what theyre doing will come after investor day. But they got a thumbs up for the quarter today. So i think on the Goldman Sachs front, we really have liked the stock for a while now on their play of the move into the consumer place and what weve seen in the reports from the banks over the last two days is we havent seen any meaningful uptick in chargeoffs. So lets telling us that banks arent seeing a deterioration of the consumer despite some concerns today so that helps to offset any concerns youre seeing on the part of target and the capital return of these companies that are going to be returning to shareholders is a great play Going Forward. Weve heard from five of the big six, including jpmorgan and it appears banks were on the president s mind today during the trade deal signing. Jpmorgan chase, they Just Announced earnings and they were incredible w where are you . They were very substantial, will you say thank you, mr. President , at least . I made a lot of bankers look very good. I understand from sources that because jpmorgan of course has recently been granted majority licenses for some of their subsidiaries in china that they felt it was important to be at the signing when they were invited. Jamie diamond was otherwise engaged and not able to do and mary o mary otis was there. I didnt manage to hear whether jamie diamond thanked the president. But either way, i thought that was amusing. It was a very entertaining press conference. It was about a 2030minute break. Stocks moving higher in todays session but target sitting out the rally. Courtney reagan has more at headquarters. Target holiday sales were up just 1. 4 , well short of expectations of around 4 for the full quarter and well below the recent strong sales trends that target has seen comparable digital sales, what happened apparel, essentials and beauty were up, but key holiday categories, toys, electronics, home, which make up about a third of holiday sales those were weak. Toys were flat targets toy sales have grown for 21 straight quarters as it has expanded the inventory, trying to pick up some of the market share loss from to toysrus. They actually grabbed 20 of the market share in 2018, so many are wondering is that now over back over to you. Thanks very much for that down 7 as you said. Turning to the other big story out of washington today, the signing of the phase one trade deal with china. Kayla was there in the room and joins us now. Wilf, the event was a couple of hours wrong, but the events are going to be reverberating on the campaign trail for the rest of the year. President trump ran in 2016 on holding chinas feet to the fire economically and even though today was a partial trade deal, it was still an unprecedented one capping off two years of at times rocky negotiations our negotiations were tough, honest, open and respectful, leading us to this really incredible break through most people thought this could never happened it should have happened 25 years ago, by the way. But thats okay. President trump has been focused on the trade deficit throughout these talks and to that end china is pledging to buy about 200 billion in additional u. S. Goods over the next two years the breakdown is about 78 billion in manufacturing, about 50 billion in energy, and some purchases in services and agriculture as well. Of course the president has been talking about farmers who have born the brunt of the retaliation and needing to make them whole as part of this deal. China will also allow more foreign financial activity wilf, you just talked about jpmorgan theyre going to be going further than before to open up the sector and they will be facing potentially criminal charges for stealing technology. But even so, ambassador Robert Lighthizer said its not ideal, it didnt get everything but its a good first step. Thank you very much for that. Lets continue the discussion and bring in the executive Vice President and head of International Affairs at the u. S. Chamber of commerce, who was also in the room for the signing. Thank you so much for joining us how significant is this moment i just came back from beijing and i have to say it was quite significant. I was there in 2000 when china and the United States signed the bilateral deal that led to way to chinas entry into the wto and i remember the excitement in the room and the hope for chinas integration into the world economy. This deal comes at a Pivotal Moment in the u. S. China relationship we needed relief on escalation of tensions and we needed to see a reduction of tariffs and we needed to see improvement in market access, intellectual property, and in other areas like forced Technology Transfer. We didnt get everything we wanted like ambassador lighthizer said, but we needed this step in the right direction. Now weve got to see the implementation of the deal and move on to a phase two negotiation. Good start but more work needs to be done. Where does more work need to be done . Ive been working on this relationship for over 25 years weve not been able to get to the subsidy issues china has massive subsidy still in place that make an unfair trading relationship be complicated. We have to deal with data, localization, discrimination issues and cost data flows that are core to technology and financial firms, access to the market in a transparent and fair way. Weve got to deal with the Corporate Credit system in place. So big issues that go to the core of the structure of the economic model of china and these are not going to be done overnight but theyve got to be addressed ultimately if were going to improve the relationship. In terms of the significance and the line in the sand as it were of todays signing, do you think it could still go backwards again or is it just now a question of whether or not or how soon or not we get to the next stage of phase two . Well, i think theres always the challenge about the relationship that its multifaceted and its never a straight line. We are dealing with the signing today of a trade agreement, but were also talking about export controls and other issues in the last week. So the issues that are in this relationship are complex, but the two sides have to keep working at it. So were going to have some bumps in the road along the way, but im confident that if the two governments do fully implement this agreement, well see improvements in our access to the market for Financial Service firms, obviously for farmers. I sat next to one, a rice farmer and also of course manufacturing goods. Now, having said that, if we dont get to the structural issues in the relationship then were going to have some challenges that are more than just bumps in the road because this goes to the competition not just on trade but on technology, which i think is really core to improving the relationship overall and ensuring we dont have a decoupling on that front. Do you have any concern that the chinese will have trouble meeting the 200 billion target in buying u. S. Goods and services well, thats been a question all day. Its an aggressive target, no question about that. But its aggressive, ambitious and its needed. We do need to see an increasing amount of exports to china, not just because were about leveling the trade volume between the two countries, but because the market has been closed and its not just chinas commitment to purchase goods or agricultural products. Its about eliminating standards and regulations that have prevented us from doing business in that market in a fair, transparent and nondiscriminatory basis. So these are fundamental issues to the relationship. So im hopeful does it ambitious, yes does it require china and United States governments to work with the private sector closely, yes. Well see how it comes about. Thanks so much for joining us thank you. Still to come, a little bit later on the show well talk more about the phase one trade deal and what comes next with marc short, chief of staff to Vice President pence and after the break, the run of new highs has many analysts playing catchup. Well take a look at just how many price target increases weve seen this year and what it rwd. Kemong the mart vi foar this is the age of expression. Everyone has something to say. But in a world full of talking, shouldnt somebody be listening . So. Lets talk. We are edward jones. Were built for hearing whats important to you. One to one. Edward jones. Its time for investing to feel individual. Here we have about 45 minutes left of trade. Lets send it to mike santoli for todays market dashboard. School is in session and were going to look at grade inflation on wall street, people handing out very generous scores and failing a test, target studied up for Holiday Season and its sales fell a little bit short. And then honors and demerits, big split between the high valued and cheapest ones and then good work habits, an indicator of domestic economic work getting done. First of all, take a look at this chart, the s p 500 over the last ten years, alongside this measure from our friends at sentimenttrader. Com that shows the number of price target increases relative to the number of earnings estimate increases so in other words, when this number is very high, as it is right now, it went above this threshold. Youre seeing a lot of analysts raising their share price targets without necessarily saying we think the fundamentals are also looking brighter. So clearly when youve had this persistent rally in the market, analysts feel pressure to raise the price target or say sell the stock at these levels. So the previous time we were around here, the early 2018 experience where we also had a head long rally. Also in early 2016, that was a time when we were coming off of a major low and the market itself had moved a Long Distance in a short period of time. But we were not at a significant market high at that point. Something to keep in mind. Its another indicator that sentiment, bullishness is almost being created by the market itself because it refuses to pull back here, guys. Thanks so much for that you kind of alluded when the momentum is this good, you dont want to bet against it yeah, and whats interesting is we were looking at something similar this morning, this is the First Time Since 2004 that the average share price of russell 1,000 stocks is above the average analyst price target so were seeing the level is higher than the actual price targets by analysts, which helps explain why analysts are starting to trip over themselves raising price targets because theyre very behind f. Youre working at a bank and your price target is below where the stock is trading, you cant really have the buy on it. 41 minutes now before the bell and the dow were still in record close territory, the nasdaq and s p 500 all in the green. Up next, pelaton getting a pop after the company said the highend bikes are more than just a fad thats next. And Mortgage Applications jumping 30 last week as the rlring buying season comes eay. Well discuss whats behind the surge in todays market zone woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Were committed to making college more affordable. , thats why were keeping our tuition the same through the year 2021. [woman] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. High protein low sugar tastes great high protein low sugar so good high protein low sugar mmmm, birthday cake and try pure protein delicious protein shakes welcome back to closing bell. Time to get word on the street bernstein downgrading beyond meat on valuation considerations the nearterm sales potential in the u. S. Is already priced in. Currency maintaining a 106 price target on the stock. Zyng affirm is saying theyre well positioned to build abroad and scaled portfolios, hitting its highest level since may 2012. And web bush with a 37 price target on pelaton. Theyre saying survey results and analysts saying they dont think pelaton will prove to be a fad. The subscription business can reach 4 million subscribers. The stock today up 2 pa3 4 theyre talking about the subscription, but also the rollout of new products, a rowing machine, a cheaper treadmill. What do you think of pelaton so no position in the stock and its not a stock im particularly attracted to right now. But they have the first mover advantage and you can sort of equate it to tesla other competitors are going to come in, but youre not going to get like the nautilus that announced a competing product and the stock went up last week. But none of your friends are using it. Lets bring in the analyst behind the call. James, good to see you today lets talk a little bit about how you get to this number of 4 million subscribers, thats the potential. Sure. So we can start with 129 million households in the u. S. , roughly half of that are people earning more than 50,000 a year you continue to whittle that number down, sort of based on the survey work that we did. We get to about a 15 million household number, and thats the number of people that we think cannot only afford it, but are interested potentially in owning the product. And then from there, we think that they can get to peak subscribers within the us of about 3 million. You add another million to that internationally and thats where we get our 4 million number from. Do you care mainly about the sub revenue or is the original sales relevant i think the two are clearly connected to one another but i think from a valuation perspective, if you can convince investors that youre building a large, profitable, sustainable subscription business, investors are falling all over themselves to be a part of those types of companies. And ultimately i think thats what pelaton is doing and i think management makes it no secret thats how they want this company to be valued in the longterm, and i think a lot of their actions would support that thats their longterm view. Is there still litigation overhang from the Music Publishers or not . Its hard for me to say that thats entirely behind this, but i think the majority of it is. Basically on a goforward basis they pay essentially a percentage of revenues toward the music studios. Periodically they have to then pay sort of one time lumpy payments for content used in the past, but i actually think that should be a tail wind in fiscal 2020 and beyond as we lap a lot of those onetime payments. James, is there any other company thats positioned to get pelaton a run for its money . I dont think so. So based on the survey results that we did, very few of the many alternatives that are out there really rose to the level of being a legitimate threat to pelaton. I guess the one company that were going to be following pretty closely is sole cycle, looking to make an athome bike. Theyve teased that thats going to come out