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tv   Making Money With Charles Payne  FOX Business  January 31, 2019 2:00pm-3:00pm EST

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and southeastern part of the united states. that will last into mid-march. charles: thank you, my friend. you're an encyclopedia. joe bastardi. the guy i can say the same about stocks. charles payne. charles: i love when joe starts talking about this, like we know. you remember the kansas city storm of 1802? neil: who doesn't. who doesn't. charles: thanks a lot, neil. good afternoon, everybody, i'm charles payne. this is "making money." we have a big show for you today. even though the dow is in the red, the s&p 500 is on track for the best january, get this, in 30 years. is this a good indicate for for the rest of the year? i will ask my panel about the importance of the so-called january effect. also the it is the second day of trade talks with china. the president is under considerable pressure to get a deal done. is bejing, what will happen with them? their economy is failing. gordon chang will give us his take on progress.
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the democratic party continues to lurch left. as howard schultz are baffled by liberals outraged over his american success story. we'll talk about that and much more on "making money." ♪ charles: feels like an idyllic, lazy summer days. today the market we're wrapping up a very strong month. in fact the s&p 500 is on pace for its best month since october of 2015. a big part of that is fourth quarter earnings reports. however it is not earnings themselves but investors finding silver lines in these reports. joining us to discuss it all, max funds dot-com founder jonas max ferris and eddie gabor, scott martin, chief investment officer for kingsview asset management. scott, let me start with you. three things i want to talk about in this segment.
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i tell people, investors, not earnings, market reaction to earnings. reaction has been pretty positive. >> i love it, charles. you're absolutely right. earnings, don't forget my friend have been better than expected. we thought this would be in a word stinky quarter. not so far. double-digit quarter with some reports. you're right, charles. the market psychology has totally turned. if the earnings came out in december, like visa's earnings, maybe apples, they would not be treated as well or tepidly the market schooling is now. the market psychology is changed. we're looking for good points instead of bad points in the earnings. as more earnings come out, i think it lessens the pressure on lot of companies to guide higher going forward, to reaffirm growth and reaffirm outlooks because the market is giving them some love. charles: eddie, feels like old days when theres were whisper numbers. you had the official number and then the number that dodged the
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bullet. we missed a lot on revenues and earnings have generally beat they haven't been gangbusters per se. >> no, they haven't it. but the point is with the dieseloff, bears came out, here we go, here is the recession. set the bar really low. expectations into this quarter's earnings were really low. anything close to or beat in line with expectations is why you're seeing the market have the rally it has. you and i spoke a few weeks ago why we were bullish on equity markets for 2019. i think january sets the table for a fantastic year. i still think there will be volatility, without a doubt. it will not go straight up. for someone taking too much risk maybe time to take a little bit off profits short term. this year we'll look double-digit returns when we look back in december. charles: jonas, earnings parade is so good.
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>> these numbers don't jibe with the global recession. boeing had the first 100 billion-dollar revenue quarter. it is good enough to the other guest's point, if apple pulled numbers they pulled last summer when 3.25% 10-year bond it would tank the stock. after the 20% decline, good enough. what is supporting besides earnings which are pretty good is junk bonds are doing well interest rates are low. 10-year has fallen a lot. have rates will cause a recession -- charles: what bin verted yield curve, particularly after the fed yesterday is that back in play? >> more in play was the spread between risky debt and safer debt junction bonds are yielding more and more, treasurys less, that means people are coming up. people watch that as canary in the coal mine. that stopped. fed went into patience mode like axl rose. they will not raise rates. that will not invert the curve more. watch junk bonds, high yield,
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that is where you see more panic. charles: scott, if we avert ad world recession it is because america, for me what i see every day, ups u.s. sales were phenomenal. americans were using premium package service. same thing with facebook. you have more users. made a lot more money in america. 3m, same thing report after report after report. feels like america is doing well enough. do you have confidence this can continue? that the american consumer can keep going? >> i do. we are the largest economy in the world. we do have some pull. let's say that. i'm worried about wrangling in d.c. republicans and democrats are not plays nice. that puts some stress on these things. 401(k) balances took a hit at q4. we were all-time highs earlier
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in the year. coming back in january as eddie pointed out. there are things going on out there. housing prices taken a bit of a dive but not losing as much value as they were towards the end. year. there are good things consumer is feeling here that would help propell them in 2019. charles: new home sales, eddie, best numbers in eight months. 257,000 annual rate. what was compelling in my mind about the report though, median price was plunging. year ago, same time 343,000, that means we're moving mid 200,000-dollar homes or starter homes s there silver lining we can get that part of the economy going if we move homes at lower level? >> yes. i think that also shows to the strong consumer we have. to the other guests point with interest rates now not having worry of 10-year hitting 4, 4.25, that should help pure growth in the housing market too
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with mortgage rates coming back in. there was definitely a point where there was supply issue on housing and prices got too high. now i think you're starting to see them reset and with interest rates staying low hopefully for the foreseeable future of '19, prices coming in, that will help spur the housing market in the second half of the 2019. i agree with you, overall the consumer here in the u.s. is very, very solid. charles: jonas, january effect, has a pretty good track record. not always perfect. but a pretty good track record. then we think about 2018. january came out of the gate like a rocket ship. we hit a brick wall january 26th, when president trump went to davos and declared war on the global elite. we had a whole lot of other things happened after that. what can we take from action in january that might give us some sort of tell in the rest of the year? >> in my opinion there is global anchor holding down the u.s. economy right now.
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we don't know if that will drag us down or get out of their problems, stimulus and tax cuts like we did. charles: china. >> the whole economy. the whole world is a drag right now. we can't leave that behind. we're doing pretty good numbers. charles: what is the market telling you? is the market saying it can be done, it might happen? >> interest rate action seems like this year will work out. we'll not have a catastrophe. >> housing market slowed down because 30 year got to 5%. most people can't afford median home without home price correcting payment going down to make the same. now you see pickups now. you can get cheaper mortgage. we're at limits of home prices with rates. rates can't go a lot higher that would cause serious problem for the economy this year and if riskier year debt fell again, that means would have global recession. those are the two things i'm watching, essentially mortgage rates and junk bond yields. >> scott, the january effect has
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rackable track record predicting rest of the year this is remarkable january. despite all the noise, heavy headlines this is great year, great month, rather for stocks. can it continue. >> it can. i don't want to pour out the party punch, charles. we had abnormal december. a blast down on christmas eve before the holidays. it doesn't make january not as effective. makes me wonder if we giving back some of that we gave off in december because that was so abnormal. to me. neil: take on jonas' point from previous comment this, will be a year welcome to the jungle. mounts and january like pretty good. months after that may be good. it will be a tough sledding t will be a stock mick percent market. stay with good solid companies with good earnings growth. charles: i'm trying to figure out some quick, pithy line from, you know, i'm a cowboy, horse i ride? >> sweet child of mine.
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charles: eddie, you're the common sense bull here, been bullish, right last couple months. what are you worried a bought though? >> what i'm worried about is the slow down in china and not getting a trade deal done. slow down in china, trade deal not getting done, it could spill over into the u.s. and bring on recession fears. if we get a trade deal done, i think that put as backdrop to having a fantastic 2019 but it is not going to go straight up. would i expect to see at least one to two, six to 8% drops we'll see throughout the year. charles: wow. >> i think january is setting the table for a positive 19. charles: thank you, eddie, jonas. >> will not be paradise city. charles: got them all today. president trump meeting with chinese's vice premier. they will talk trade. president trump expressed optimism getting something done by march. we'll have a live report from d.c. next.
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amazon, it keeps expanding sales into every aspect of our lives, retail, grocery, shipping but is it an industry killer? we'll debate that later in the show? should government intervene? we'll be right back. i switched to liberty mutual because they let me customize my insurance, and as a fitness junkie, i customize everything. like my bike and my calves. liberty mutual customizes your car insurance so you only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪
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charles: china's top negotiator vice premier liu he, trump will meet with him about about three hours from now. trump talked about the negotiations just about an hour ago. take a listen. >> the relationship of my people to chinese representatives has been very good negotiating now. they will be colling over here -- coming here about 4:00. we'll talk to one of the top leaders in china as you know. i think probably the final deal, if it is made, will be made between myself and president xi. charles: right now with very latest from the white house, our very own edward lawrence. reporter: vice premier, liue he will meet with president trump
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in the next two hours. trade talks are going well, so well, in fact that loose night the u.s. delegation invited the chinese delegation to an unset aldenner. ate an informal setting in a club near the white house here. president trump is pleased with the talks. he believes a deal can be done. >> we're certainly talking about theft. we're talking about every aspect after trade with a country. we're talking about fentanyl too. reporter: still the president saying that those tariffs will to up on march 1st. still a marked change of rhetoric out of china today. for the very first time the chinese minister of commerce spokesperson came out and said he is talking about what he calls, vigorous measures to protect inintellectual right property. up to now it has just been written down in reports. take a listen. >> translator: we will promote the quality and efficiency of intellectual property examination and to dramatically
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raise the cost of illegal activities. we will resolutely fight against the infringement of. intellectual property. >> we'll see exactly what happens later on today. back to you. charles: thank you, edward lawrence. we have the author of coming collapse of china gordon chang. and keith fitz-gerald. let me start with you. you've been skeptical -- >> keep laughing, charles. charles: as i heard interpretation from the chinese trade representative, that we heard from xi from the same gathering they would implement the sort of measures that would punish companies from, prohibit them from stealing ip. i'm thinking, well, isn't the government behind all the i.p. theft in the first place? >> it certainly is. the people stealing ip, for instance, state enterprises.
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the communist party vigorously controls all state enterprise. huawei is acting on behalf, that is private company nominally, but they have been acting on behalf of the communist party. the chinese will say anything to avoid what is essentially a death sentence from the united states. we saw the first number for january, which continued downward trend for december. chinese economy is probably detracting. these people will say anything. charles: let me ask you, the narrative being thrown out there, within china, there is a battle between the state-run enterprises and these private companies, right now of 300 unicorns out there, 26% are in china. we have great things going on on their own. these folks developing their own ip themselves are probably pushing or pressuring the country, yeah, we do need ip profession for our organic growth and discovery. >> that is true.
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xi xinping victims of his plans are not foreign companies. the victims are chinese entrepreneurs in the tech sector and also outside the tech sector. but xi xinping believes in a state-dominated party. he believes the communist party dictates what goes on. that means state enterprises get most of the liquidity in the banking system. you end up with a system which is really oriented towards the state. charles: of course the market watches this very, very closely. we don't have to tell you that. responsible for a lot of volatility last year. , particularly to the downside, keith. this goes through two scenarios. we get extension perhaps of the, of the increase in tariffs and, we feel like talks have gone well. maybe go beyond the march deadline, with an extension, olive branch till out there. what would reaction be from the market? >> i tell you, there are two things that stand out. number one gordon's comments are
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absolutely spot on and jibe with my own personal knowledge of china. second, the informnal dinner they attended with china, that do a lot of formal business over informal dinners. if there is progress i think that is food. we'll get a little bit of a warmup but if they come out with a deal that truly settles intellectual property, truly protects chinese ip as well as international ip, we keep the money flowing i think markets are off like a rocket. charles: we're talking about like huge, 10% more? just instant move to the upside? >> i think there will be a an instant move to the upside because traders have to get in front of the potential they see building. there will be two moves. there will be a quick reaction and there will be a grind higher as the bigger portfolios catch up with that expectation. charles: gordon, are you feeling better considering the dinner last night, much more warm tone from both side? not nearly the kind of sabre-rattling we dealt with almost all of last year?
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>> i think there will be some sort of deal but i don't think it will be in the long-term interests of the united states. you know, just look -- charles: we'll get snookered? >> we'll get snookered. go back to last april, the 100-day action plan wilbur ross announced, you know, u.s. credit card companies are going to be admitted. they were supposed to be admitted in 2006. there was wto case that we won in 2012. and they're still no american credit card issuers that are able to issue their own. so you know, earliest it will happen is 2020. so, yeah, the chinese will say anything. but i do believe the market will go up a lot. when they see this is not working out about a year or two from now, it will go back down again. charles: bored an, sorry, keith, less than a minute, what happens if there is no deal, both sides walk away visibly upset? >> then we have a serious problem because the risk is xi xinping, is a caged animal at this standpoint. president trump is you putting pressure on him. the biggest thing he goes hard-line. he makes friends with russia.
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he expands in south america. fills vacuum we left in the middle east. there is lot of challenges there, not one of which bode well for us. charles: gordon, keith, i couldn't think of two better guys to have this conversation with. thank you both very much. >> thank you, charles. >> amazon gearing up to report after the bell. will the company give us a clue what is going on there. we have microsoft's numbers. something to test it up against. also coming up, democrats, well, there are already divided on california senator kamala harris. their call to eliminate private health insurance. more divided with someone who might have been a star in the party. howard schultz will go to war with the party? we'll discuss it next. ♪
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♪ charles: everyone's waiting for amazon. meanwhile the company under pressure to reveal more about its business and the source of its profits. one of the reasons for this amazon gain ad reputation as an industry killer with a voracious appetite. no industry is too big, or too small, including selling live christmas trees. with that in mind, many say something must be done to slow doesn't behemoth before amazon puts companies out of business and too many people out of work. bezos has impact on many industries, printing, videoconferencing and groceries. the day whole foods was took over, stocks were rocked. in may of 2017 reports that amazon was interested in being a major player in pharmaceuticals. that sent shares of walgreens and cvs tumbling. they haven't recovered since. rumors of amazon entering package delivery first reported in january of 2016. pressuring shares of fedex and
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ups, now, both are higher since but have significantly you know performed the market. so, should government intervene to stop amazon? on is this just creative destruction at work to benefit consumers even if it means fewer jobs? here to discuss, veronique de rugy. what do you think of amazon, the bigger it becomes more of a target it becomes. >> that's right. fears of bigger companies becoming bigger, taking over every area of our lives. ultimately when they achieved the massive power, becoming like tyrannical to consumers perennial fear. standard oil, basically the government broke up after it already lost a third of its share in the market. groceries, which most people won't remember, a and p was talked about as amazon. microsoft in the '90s. it goes on and on and on.
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yeah, it's a target and i really hope we're going to learn from the past. we're going to learn as long as there is not a government protected monopoly power, as long as amazon is innovative, you know, it is going to be okay. i bet you by the way maybe you and i were not going to see the end of amazon in our adult life, but i guarranty you will be laughing at us talking about this threat of amazon. charles: you know, to your point, in this political environment and just judging, the way people feel, it seems like it is ripe though, amazon is the ripe target because -- >> of course. charles: there have been a lot of examples throughout history but it feels like a unique company. feels like not only the sears of yesteryear, it is the a&p of yesteryear. almost every major behemoth that came before it under one roof, and a lot of people believe that is too much power. >> a lot of people said that about a lot of companies before. oh, this time is different, actually turns out never to be
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different. as bigger as amazon becomes bigger and bigger, what happens, they're going to have a harder time innovating and, if they can't continue pleasing consumers, because ultimately that is what companies are for, to please consumers. consumers are to actually guarranty inefficient companies stay in business, as long as they continue doing this, they will stay in business but as they grow being innovative will be harder and the next company can come in as we've seen many, many times in the past and, and win the day. charles: you know, it is interesting because listen, there is no industry i don't think, when they went after live christmas trees this christmas, i said that's it, they want everything. but they are spending a lot of money now. all of these silicon valley giants on ndc, lobbying things like that. will that be a necessary thing for them to at least stave off
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the urge for washington, d.c. and others to go after them? >> they are going to have to be certainly like careful because the attacks, systematically you see it, when there is a fear about a company becoming too big, the people turn to the government to address this problem. then that creates a lot of problem. people tend to overlook the fact that amazon is not just a big company doing everything itself. it is actually found a way where it is integrating a lot of other companies, allowing them to sell on its platform. charles: right. >> it is not just like, it is not doing it all itself. charles: sure. >> it is actually providing a lot of services for much smaller companies but they are going to be careful. charles: i was going to say, the most recent example of that, south carolina. mercedes is now manufacturing all of those great vans in south carolina. they have expanded the factory. they're hiring hundreds of people just to meet amazon demand. veronique, i love having conversations with you. >> me too.
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charles: it is sort of an interesting session on wall street. it has been a mixed bag with earnings but the dow sort of sloppy. the rest of the indices up. nasdaq is really killing it. we'll go into deeper dive on these markets. democrats are up in arms because howard schultz is stealing headlines and crushing the solissic dream. will he indeed be the spoiler of 2020? that is next. ♪ moving? that's harder now because of psoriatic arthritis. but you're still moved by moments like this. don't let psoriatic arthritis take them away. taltz reduces joint pain and stiffness and helps stop the progression of joint damage. for people with moderate to severe psoriasis, 90% saw significant improvement. taltz even gives you a chance at completely clear skin. don't use if you're allergic to taltz.
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♪ charles: welcome back. earnings moving the market all week long as concerns over trade and global growth. ge also soaring despite missing because they did beat in key
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sectors and gave pretty good guidance. how the stocks are opening down and trading higher. that is a good tell. all eyes on amazon set to report its results after the closing bell. we'll have a preview for you. meanwhile democrats in disarray over howard schultz ceo from starbucks mulling a run in 2020 including fellow democrat mike bloomberg. they're blasting him for not running on the party ticket. elizabeth warren stayed true to herself, simply bashing him to be a billionaire. >> i find that sew offensive, first of all elizabeth warren doesn't know me. i started from nothing. i'm self-made. isn't that the promise of america? , that regardless of your station for life, you can come and be successful in this country? charles: he has gone from being a spoiler to really being a spoiler. he is putting a spotlight on broken system that the democrats are trying to sell us even as he
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sells his books. from "the wall street journal" editorial page, jillian melcher. forbes political contributor rick ungar, and contributor to the pac, ford o'connell. democrats maybe howard schultz siphon off votes and now he is attacking their new core social belief systems democratic socialism. he says this thing doesn't work. >> you're absolutely right. the democrats are in full freakout mode of howard schultz and existential threat and white house 2020 spoiler. he is knocking down key democratic arguments about free items, medicare for all before the democratic field can even get off the tarmac, charles. charles: rick, you know what? considering how you don't like aoc, you must be thrilled at least with some of the things you're hearing from howard schultz? >> i always look forward to opportunities to tell my friend
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ford he is wrong but i can't today, i hate that. my two words to my democratic friends, calm down. everybody is so overreacting to this i have done my research inside the nascent howard schultz campaign. i am absolutely assured at this point if he finds that he will be a spoiler and that's all, he will not continue with it. in the meantime, listen to what the man has to say. this is not a dumb guy. and i think this is a lot added to debate hearing what is on his mind. i agree with him on many issues and i am a democrat. charles: "wall street journal" ran a editorial today. we have a part to share with the audience. jillian, i want to ask you about this, the way progressives are denouncing howard schultz you would think he is donald trump's first cousin. they fear a policy debate, which is exactly why schultz's candidacy could be good for the country including democrats. >> yeah. what we have right now,
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democrats competing to outsocialist each other. we have elizabeth warren, aoc, bernie sanders. you've got cory booker, kamala harris, taking extreme socialist positions. when you have someone coming in, let's rethink this. maybe we like private insurance. 70% tax might encumber business, that helps moderate the party f you're looking strategically as democrat the risk they're going so far left they may isolate and scare off a large portion of those moderates. charles: here is my theory, ford. i will share it with all of but you can take first crack. if schultz bows out i think folks pushing party further left will take a victory lap, feel more emboldened that they won. that his ideas were defeat. that is not where the country wants to go and they will go even further left? >> i absolutely agree with you here. there is real battle within the democratic party whether you want to be a moderate centrist
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or fiery progressive that everyone deserves a free lunch that is universal right. democrats won in 2018 with suburban voters in the rust belt, suburban voters in arizona. if they can't capture suburban voters going so far left because they freaked out the nation, they will glom on to trump because they have no choice. charles: rick you have the inside scoop. polls say harris is doing pretty well. coming out of the gate pretty good. >> woe can't even come close to having that conversation who is winning this is so insanely early, there are some more candidates to come. charles: who is out in the wings will change this? i bernie sanders was flat. no one reported on him. >> it was flat. charles: so who is going to come out to disrupt -- >> we'll see amy klobuchar. one of my favorites. charles: is she going to be centrist? >> absolutely. that is what she is. certainly left of center but
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very much more, as ford said, that moderate centrist part of the party. you will see a number of more candidates come out. some will be further left. and some will be centrists. there will be this battle. that is absolutely correct. i can't tell you which side will get the nomination. i can tell you this. if history is any judge, whenever the left does ultimately appoint who is going to be presidential candidate, we get killed. >> this reminds me a lot of 2016. it is progressive wing where all the energy is, some ways the fringe, than the establishment democrats. especially this many candidates there is -- charles: this time the establishment is starting to lose its grip, its grip on the messages, its grip on popularity, they're losing their grip on the ability to engineer the party the way they want to engineer it. it is not only -- we've seen the elites and establishment lose their grip around the world. >> sure what is fascinating about this, what is fascinate
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about this the establishment right now is bernie sanders, it is elizabeth warren. i remember like what, eight years ago, people were upset when you said barack obama was a socialist. now a title they're hustling to claim. that is quite remarkable. >> fiery progressives are doing trump's dirty work for him. what trump wants to see contrast with the progressive wing of the party. if the contrast comes he will be reelected in 2020. s his biggest worry like joe biden, doesn't take a specific position and plays well in the rust belt. charles: this is interesting conversation. we'll keep having it. rick, ford, thank you very much. earnings after the bell for amazon, we'll tell you what to be looking for, hints, cloud revenue. major indices are higher. only the dow is limping along. look at the nasdaq. that is a rocket ship, digesting a host of earnings reports, facebook among many. there is key tell i want to share with you that this market
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charles: the dow struggled today. the session for broad market is bullish with every measure of breath impressive, including new york stock exchange where advancers have three to one ratio over decliners. more stocks hitting new 52-week highs. i talked about this in the past. bring back jonas pharis and keith fitzgerald. does 24th, 1100 stocks hit new lows on nasdaq. that number is hanging around single digits. i like that this week, stocks opened lower, under pressure fining ways to reverse. we seen that happen with mcdonald's. sherwin-williams, low as 397, 20 bucks from that. tesla down from the loy of the day. buyers are starting to emerge, particularly deep pocketed buyers. >> absolutely. january is always a month where you see this phenomenon.
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money has to go to work. a lot of pension fund allocations have to change. er race is a money has to go to work. erisa. new highs i watch those very, very closely. >> on top of that a lot of money came out of the market at the end. year out of panic is quickly trying to get back into the market. that is reversal of cash flows essentially. i think markets is at good level. i think it overreacted on way down and corrected too high. charles: equalibrium? >> we need a driver to go much higher. i think investors are trying to find it in facebook. really good numbers. company was having a lot of trouble last year. primary part of core momentum. apple seems to be non-growth company. they're looking for ad sales. a lot of wall street analysts are real psyched. raising estimates, driving stock up today. i'm a little more negative. i think warning out of ways to
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grow. 2 1/2 billion customers. it is limitless the future. you would i this at end of the day it is advertising. struggling without getting into data. they're a little war with apple. right now apple is kicking off some apps. charles: right. >> i think it's a big story they fight over each other with the market share they take on. charles: before i go back to you keith, you talk about a catalyst, sometimes can new highs bee get new highs? >> sure. charles: that market goes up too much it breaks certain resistance points? you're a money manage mare, you're getting paid to make money, if the market is on the cusp of a major breakout don't you have to participate? >> you do and you lose accounts if you're not participating. there is a lot of momentum in the market. i'm not momentum investor. >> you're young. >> a lot of people, a lot of people do it. they will buy because it is up, new highs. there are whole funds that follow momentum. do well when market is up. a dangerous strategy during a
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crash. you will lose more than the market. that is proven through the last bear markets. for me i protect money in the down markets more than anything. not a great strategy but gets more gains. charles: keith, what are near-term catalysting going to be? we had extraordinary january. against the worst december since 1931? >> well, people were voting for the negative. it didn't happen. in fact we've got great numbers. those inevitably, revenues propepping earnings which propel stock prices. if you look ahead like the market does you have to get in front of that. to me i see political situation calming down. i see a deal in china potentially kicking us off. i see the "brexit" situation getting resolved. how i have no idea. those are the things you have to be prepared for the upside. most investors are underestimating that right now which itself is contrarian signal. charles: you have to say we get china deal, no government shutdown, that will be one hell of a one-two punch even if it is
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short-lived. jonas, keith. very much appreciate. amazon is a biggie, much more important to the communication services space than google or facebook. it might be the most important stock in the market. they report their earnings after the bell. we'll have a preview for you next. ♪
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charles: all right, folks. all eyes on amazon. the e-commerce giant will report earnings right after the bell, and of course, everyone's looking at these holiday numbers, and then of course, everyone wants to know about their business, their cloud business, because this stock will be the one in my mind that could make or break this rally that we have enjoyed in january into the rest of the year. we brought the man in to help us hash it out, connell mcshane. what's the street looking for? connell: we will have it after the bell for you today, the last quarter, $71.87 billion on revenue. amazon does have a habit of missing revenue targets. five of the last eight quarters they have come up short of wall street estimates. this time we are looking for about a 19% rise year over year which by the way would be the slowest growth revenue-wise for amazon in a little over three and a half years which is sort
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of interesting. to your point, i think the focus is going to be on this aws business, the cloud computing business, as it was with microsoft the other day. that is, you know, where not only the future is, but increasingly, the present for amazon. they're expected to show growth there revenue-wise in that business segment of 42% compared to where they were last year. so we'll see. if they hit that target, you would know more from watching the stock than i would, that might be more important than hitting the overall revenue target. charles: that will be the most important thing because the guidance last time they reported, they did guide fourth quarter 20% so that's in line with wall street but that's what knocked their stock down. because the year before in the fourth quarter they had 30% growth. is this an issue with the currency, some say that played a big role in it, is it because brick and mortar are getting their act together or because this hot new area, cloud, you had to yourself the last couple years, you have competitors. microsoft last night gave 48%, their cloud business, and now
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there's a lot of talk of microsoft actually leapfrogging amazon. they will have to post a very -- i think if they beat anywhere it has to be that number. they have to come in more than that 7.26 number. connell: the stock is running up ahead of the numbers. we are an hour ahead of the amazon numbers and the options market is pricing in a pretty big move tomorrow, a larger than normal move, if you will, of over 6%. normally on average the stock moves about 4% up or down the day after it reports earnings. so if you're right, if you look at it and amazon is expect toed have its cloud business go up in revenue by 42% and you are comparing it to microsoft, you are saying that was 48%, what's a good number, what's a whisper number there. charles: got to be mid 40s. i don't think it has to beat but it has to be in the mid 40s. i will say this. december 24th, christmas eve, the stock went all the way down to 1343. it made a remarkable comeback. last time they reported, it crushed. see where it is right now? if it is a good number and wall
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street likes it, we will see a massive breakout, technical breakout, and you will have people talking about probably the stock retesting the all-time high. again, i think they have to beat, the $7.3 billion number on cloud will probably be the key. connell: i don't know who is interviewing who here, which is fine. but we'll have the number in an hour. i'm curious to what you think. you said right before the last break that to you, this is literally the most important stock in the market right now. charles: it really is. it's overwhelmingly more valuable to the communications services sector, much more than both googles combined. much more than facebook. disney is only 4% of communications services so -- of consumer discretionary so the point is, it's got to crush it. i think this is the number, this is the stock that takes us over the hump. connell: we'll have it. thanks for joining me on your show. charles: thank you very much. we will try to spruce it up for you. connell: i like what you've done with the place. charles: that's not really the
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c.p. effect but we are having a great session. you can brace and fill. this last hour of trading will be very eventful. lot of people getting ahead of these numbers. lauren simonetti is in for liz claman. lauren: breaking news right now. a shiver in the air outside and in the markets on this final trading day of january. we have a mixed picture for you at this moment as earnings weigh on the dow, but prop up the s&p 500 and the nasdaq. take a look here. the dow is down by 50 points. the s&p is up about 20. the nasdaq is climbing 91.25% on this final day of the month. trade talks, budget battles also leading to some of the uncertainty out there. president trump is speaking in the oval office in just a couple of hours. he spoke a couple hours ago as well. he said the united states could be on the verge of a very big deal with china on

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