Transcripts For CNBC Closing Bell 20141001

Keep in mind down about 3 from the alltime highs and today it is down by 27 points. Currently sitting down by 1. 4 . It is at session lows i do believe. As for the nasdaq, lets take a look at what it is up to. Off by 1. 7 , 76point loss. As for the small cap, russell 2000, little guys are doing it tough, as well. To the downside. Oneyear change is only down 10. 17 . Down 10 , that hit the alltime high in july, july 1st. It is down 10 from that high. Entering correction territory from the alltime high. Absolutely. There is that decline we have seen over the last few months in that. We want your thoughts on all of this and whats happening in the markets. Go online to our website cnbc. Com vote. Tell us if you think investors should be afraid of the markets this month of october. So far, of course, its not been pretty. Talk about it in the Closing Bell Exchange today. While you vote, we have contributor jack varucian, keith fitzgerald, jennifer vail, we have david cudlo and our own Rick Santelli joining us, as well. Keith, you have been one of the reluctant bulls on the frequent panels here. Youre hanging in but you realize that this bull run cant last forever. Now were seeing this kind of volatility recently. What are you doing with the market right now . I got to tell you. Im playing very cautiously. This is like a game of chicken with the fed and the markets coming at each other only somebodys holding the Steering Wheel out the window and my question is, who. I think octobers a transitional month. What about you, jennifer . Are you cautious at these levels, as well . Yeah, absolutely. We think the fed is certainly on the way on the path of raising Interest Rates but given some of the softness we have seen in the economy, that could possibly push off that liftoff date all the way to june rather than march that others have indicated. But does it matter march or june . I mean, the assumption is to happen eventually from a broad macro perspective. If its march or june, does it matter . Absolutely it matters. More for the pace. If you start in march, the pace can possibly be slower. Starting in june, if youre assuming that the feds dot charts are correct, the trajectory is faster if you start in june so that would be the primary difference for the market implications between the march and the june time frame for liftoff. Jack, you have been our super bowl. But, you know, youre going to get times like this, especially this time of year for whatever reason. Yep. How do you view this market right now . Well, you know, bill you asked me if theres a time that i worry. This is the time and the year i actually do worry. Right after the expiration in september. We have seen this pattern of the market coming off 3 to 5 . Keith is absolutely right. Keith is a transitional month. Earnings season is very important but the one story that is driving this market more than any other is what is happening in hong kong. Remember that. You know, this is the capital preservation trade that is taking place and what you really worry about is that people Pay Attention to Interest Rates and sucks them out of the equities and then end up in a situation where the end of the year which is very strong seasonally ends up going up without anybody in and thats once again live shots out of hong kong, 3 00 in the morning. Still there. They had given the chinese officials a deadline to come up with a plan to allow for elected officials in 2017. Thats not happened. They have a new deadline. Theyre demanding the leader, political leader in hong kong step down by thursday evening their time. So, you know, theyre still working out the end game or the exit strategy for both sides at this point so were still watching this story very carefully. He was the chief executive. A lot of pressure on him to step down. Rick santelli, is there any sign in the bond market that hong kong and other political events are playing out there . Fallen in the 10 today. Mandy, well, i think that the 10year is definitely the Global Growth story adding into a weak Global Equity 24hour period and we have talked about this. We started talking about it in january. And its the reason i wasnt offsides, at least personally on the outlook for Interest Rates that in the end we have a market of no alternative and when that market takes a hiccup, theres one natural hedge to that and thats a certain subset of sovereigns, the u. S. , germany euro zone. Off its alltime 88 basis point low yield close from the 3rd of september. Listen. Hong kongs important. Obviously. But honestly i will tell you the only thing i think that cause and effect to point to today is really making a difference outside of the macro of lower Global Growth is the ebola story. Every trader i know is talking about it. Makes them a bit nervous and i said why . And the comments ran along the lines of, we have to see if the cdc has this under control better than the secret service with the elevator and the gun and thats a weird analogy but putting a lot of faith that that organization is going to be able to keep us apprised accurately about whens going on and thats all the traders i was talking to today seem to be focused on. Were going to talk about it next segment and point out a couple of sectors affected by that, the airlines today have been down sharply. For obvious reasons. People may be reticent of flying as a result of this and airlines lower and bio tech stocks skyrocketing today because of their research into ebola. So, you know, there are those companies that have done well. The Canadian Company really thrust into the limelight. I mean, i think its up over 20 today alone and been up some 200 plus recently on the back of the ebola scare and other names who are in the game and developing something with regards of a vaccine or treatment, all of those drugs and companies as mentioned are getting a lift today. Definitely an ebola cause and effect in there. David, youre watching the dollar, all watching it. Up 7plus percent in the last quarter here and prevailing wisdom is this is going to continue higher. Do you agree . Yeah, i do agree. We have seen a divergence in monetary policies around the globe. We have in japan abenomics is not working and forcing more qe by the Japanese Central bank. In europe, theyre teetering on falling back into recession. Very close to a deflationary economy. Theres going to be conflict between draghi and getting there and we know theyll move to qe. Same time our qe here is ending and looking to tightening next year and a stronger dollar, weaker yen and euro and we think Third Quarter shorting the euro and yen versus dollar is nobrain trade in the Third Quarter and keep it on. Keeping that trade on assuming the yen therefore continues to weaken, david, is japan a place to invest . Im sorry . Is japan a place to invest as you say . Yeah. Well, were concerned with japan is, you know, the end result or where we go with abenomics. Yes. As we see the yen weaken and stocks continue to do better there, Japanese Central bank moving into some of those markets we think the safer way to play that is the short yen trade rather than long the nikkei. In japan. So when we look at japan overall, that trade we think continues to work. We would be concerned about japanese stocks longer term. All right. Just point out as you folks at home are voting, 55 of you right now would not fear whats going on this month so far. I would point out seasonally october the first day of october, the last ten years, we have seen six of those days go lower so theres a tendency there. Keith, i want to pursue your defensive strategy further. We are down roughly 3 from the alltime highs for both the dow and s p right now. Is there a pain point for you that you start to throw in the towel or what will you do or start buying more in what will you do here . Well, im actually looking to buy more and ill tell you why. Because if you believe in the buy low and sell high methodology like i do that means any selloff like this is a buying opportunity in disguise. Right now, we know that ebola is a major concern. We know that we could possibly look at medical tech, defense tech, areas of world to continue grow. The energy complex. Not going anywhere any time soon and as far as im concerned, yeah, i would like to see 3 , 5 off the top and then see some acquisitions. Like to see buying back in. Jennifer, what is your bill, if i may. Sure. Jump in. Bill, if i may relative to keiths comments, it is important for longer term investors to remember that bull markets dont end because of bird flu, swine flu or ebola. Good point. Bull markets in the u. S. Dont end because of geopolitical hot spots like ukraine, syria, iraq, israel or hong kong. They end because of a u. S. Recession and were not headed there. We have economic growth. We have growth in earnings. And when rick talks about tina, theres no alternative and thats u. S. Equities because were concerned about japan, concerned about europe and now with the stronger dollar were concerned about emerging mark marketings making the u. S. That much more attractive for investors. We will have one or twoday selloffs on concerns like this. Okay. Our viewers apparently agree with you, david, and the others, that feel the same way. 53 are saying they would not fear whens going on so far on this first day of october. Thank you all for your thoughts on the markets. Appreciate it. See you later. Heading to the close here on this first a trading day of the Fourth Quarter. About 50 minutes left in the trading session with the dow i believe now the low for the session right now down 260plus points or 1. 5 . Indeed. Another day like today truly wiping out the dows gains for the year. A sliver of green at the top of the s p and coke giving in to activist investor David Winters complaints of the executive pay plan and not throttling down of the criticism. That battle continues. Now that ebola has come to the United States, we will discuss how that fear factor could affect our economy and well also hear from the american nurse who was just cured of the virus. Thats coming up later. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. E financial noise financial noise financial noise financial noise for over 60,000 extra curricular activities help provide a sense of identity and a path to success. Joining the soccer team. Getting help with math. Going to prom. I want to learn to swim. Its hard to feel normal, when you cant do the normal things. To help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. Not everyone can be a foster parent. But anyone can help a foster child. Welcome back. Selloff day on wall street. Statistically, this is the worst first day of october. The markets have seen since 2011. So three years. But traditionally as we said, in the last ten years, we have seen more often than not a down day for the first day of the Fourth Quarter than not. And were seeing that now. The dow down about 1. 5 and you see the s p, the heat map. This is all 500 stocks in the Standard Poors index and vast, vast majority of them in the red right now. The market selloff not the only thing on the minds of investors now. Ebola certainly made the way to the shores with one confirmed case. Michelle carusoka rer ra looks at how it could affect your economy. It can have a tremendous impact but not the disease to drive the economic fallout. It is the change in peoples behavior arising out of the fear of catching the disease. So we took a look at the impact of sars. Severe acute respiratory syndrome. In hong kong, more than 8,000 sars cases compared to 6,500 ebola cases so far. Ebola is much more deadly. Brookings Institution Says the cost of the Global Economy of sars 40 billion. Why . Consumer behavior changed dramatically due to fear. A study by the university of hong kong looked at data of april of 2003, the height of the crisis, retail sales dropped more than 15 in a month. Airline passengers to hong kong dropped 77 . Airline estimated losing 3 million a day. Movie theater revenue dropped 47 . People were afraid to go out. Take a look at what happened to Hotel Occupancy rates in hong kong. Dropped from as high as 79 , 2 months later, 18 . Brutal. Heres the one positive. Once the disease was contained, most spending levels were back to precrisis levels so once its contained people get back to behavior. But boy, the impact in the short term is pretty intense. Can i just jump in here quickly . I lived in asia in the sars outbreak singapore in 2003 and absolutely incredible the streets and stores were completely empty in the outbreak and everything was pretty much in lockdown. Right . The minute that the singaporean government decleared it over, boom. People were back in the streets. Very, very visible and tangible. Thats how economic works. Bill, do you remember, i traveled to hong kong, working together right after the sars outbreak. Yes. Back then you could have rolled a bowling ball through the lobbies of the hotels. Yes. Thank you. With the market down sharply today, how much should we be concerned about an ebola fear factor making things more difficult in the economy here . With us now is senior economics reporter steve liesman, elan morie and its fantastic to have all of you. Dr. Li, to you first of all. We have one confirmed case, maybe a second person in contact with that person who may be i think monitored for possible infection, as well. And yet, theres a lot of fear out there on one single case. What are the dangers of this spreading . Well, and you cant really compare it to sars because sars is caught much more easily. Its a respiratory virus. You can get it in Public Places from people coughing on you like a cold, like a flu. This is much harder to catch. You have to come in contact with someones bodily fluids. And usually its either Health Care Workers or close Family Member that is are taking care of the patients or people, the way they were burying them in africa. So, it is a serious concern but i dont think the pandemonium over it at this point is a problem. In the United States we have very good universal precautions. The e. R. S are supposed to detect and isolate. They take care of, you know, bodily fluids. You know . You dont want to get exposed to blood from any other pathogen either so its not going to be the same as africa. Okay. All right. We need to take a quick break here. We have breaking news about the secret service. What do you have . Reporter we have a report here that secret Service Director pearson has resigned. We have a statement from the secretary of Homeland Security, jay johnson, saying that Julia Pierson offered resignation today and he accepted it. That is the director of Homeland Security. He says in the statement he as appointing joseph clancy, a former special agent in charge of the secret service. He retired from the secret service in 2011. Hes leaving a position in the private sector on short notice and returning to the public sector. Also, on the investigation into that fence jumper incident on september 19th, he says hes asked deputy secretary of Homeland Security aided by this departments general counsel, this is Homeland Security, to assume control and direction of the ongoing inquiry of the secret service into that incident so after what was widely regarded as disastrous testimony on capitol hill yesterday, Julia Pierson is out as the director of the secret service, guys. Yeah. I mean, you could see this coming after that testimony yesterday and i know they were going behind closed doors after that to have a confidential conversation with some of the House Committee members, as well. You knew that her days were numbered, the timing is a little interesting here but now they have you saw some pretty aggressive questioning there from both democrats and republicans on the Committee Asking how this could have happened, how somebody could have breached so many layers of secret service security, gotten into the white house. Especially when you consider that the misinformation that they put out initially after that breach of security at the white house when they said he got no further than the front door and he was unarmed. There was right there she didnt have an answer for that information. Reporter thats right. During that testimony you noticed she referred back to the investigation and not necessarily offering new answers or explanations of why the secret service appeared to mislead folks by saying that he was apprehended near the north port coe doors. Thats the main front door of the white house that you can see in all those pictures of 1600 pennsylvania avenue. This intruder went up to the front door, right in there, barrelled past an agent in the front door and basically ran amuck inside the white house being tackled by an off duty secret Service Officer in the east room all the way through white house and ward the back of the building on that first level. So that is a very deep penetration of White House Security and anger here in washington. We saw democrats and republicans now beginning to call for her resignation, clearly that decision was made today that she was no longer tenable as the head of the secret service after yesterdays testimony. It is absolutely incredible, isnt it . What do we know about the revision and the improvement to security procedures, not just obviously for the white house, but other official buildings across the country now . Reporter part of what drum roll of revelations of the Washington Post new breaches of White House Security, including a story yesterday just after pierson finished testifying up on capitol hill and the Washington Post reported that when the president went to the cdc back in september, he boarded an elevator and in that elevator was a private security contractor who was armed with a weapon. That is never supposed to happen. Nobody with a gun not secret service is supposed to be able to get anywhere near the president of the United States. According to the Washington Post version of the events here, what happened was the secret Service Agents asked this security contractor to stop filming the president in the elevator with his phone. He refused to do that and when they questioned he was, he was fired by the supervisor and he offered to turn over the gun. That was the first time those secret Service Agents allegedly found out there was a man with a gun next to the president of the United States. Also reporter very deep breach. Lead article in the Washington Post today. That had to be you would think the back breaker for Julia Pierson at this point. Reporter between that incident, the fence jumper and new details of a 2011 incident and an assailant machine gunned the front side of the white house and secret service didnt realize it was attacked for four days until a housekeeper found debris from the machine gun bullets on the truman balcony. That story also deeply damaging to the secret services credibility as an institution and real concerns here over what now the white house needs to get that institution in shape when the United States faces maybe more threats than ever before. Thank you. The story is that secret Service Director Julia Pierson has offered resignation, accepted and yeah. I think it was expected as we said. Thats the next step. Well see what happens with a reorganization of the secret service down the road. Heading toward the close with 35 minutes in the trading session, the dow down a healthy 252 points that the hour and equates to a 3 decline from the most recent alltime high. As you see among the 30 dow components only one is positive right now. Cocacola in the green right now. October living up to the reputation as a bit of a spooky month for investors. Coming up, other bad starts to october and meant for the market for the rest of the year. And what should investors do amid this selloff . Black rocks bond you rue rick rieder coming up. And whether hes seeing outflows from pimco. Thats still to come. Whos going to do it . Whos going to make it happen . Discover a new energy source. Turn ocean waves into power. Design cars that capture their emissions. Build bridges that fix themselves. Get more clean water to everyone. Whos going to take the leap . Whos going to write the code . Whos going to do it . Engineers. Thats who. Thats what i want to do. Be an engineer. [ male announcer ] join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. Take a look at the markets. Off the absolute lows of the day and not looking good. The dow currently off 1. 4 , 244. Really interesting here, bill, is the amount of triple digit moves that we have literally seen in last 14 sessions. I think today is maybe the tenth in the 14 triple digits move as we can see a lot of volatility picking up out there in the market. Volatility index itself is up 44 in the last month. Thats correct, yes. Lets go over to kate rogers for a quick market flash. What do you have . Heres a sector check. Materials are lagging and the utilities are leading the way. Back to you. All right. Kate, thanks very much. There we are. Theres my mic. We have a special guest with us. Chief Investment Officer of black rock rick rieder. Welcome become. Thanks for having me. Give us your read on today. Are the ingredients in place for something bigger . We are trying to get a sense of markets. This morning under pressure, the treasury market spent a lot of time focused on and started to take off the beginning of the day, rumorless of ebola and Russia Ukraine a little bit. A confluence of factors. My sense is that i dont believe that the growth dynamic and scare is really whens chasing people out of equity markets and into bond markets. I think growth is pretty solid. Is this a fundamental selloff . News driven or just seasonal . Right . No. I think i heard this morning driving in i heard the stories of october and how and the seasonality to it and devastating. September and october. September and october and then november actually the usually a pretty good start and we spent a lot of time thinking about positioning into the end of the year and a pretty good time to start positioning across risk assets. I dont think this is boy, i dont believe that growth scare dynamic of today. So i dont think theres anything senior citizenic and maybe some poging thats taking place and seeing in markets of crowding, dollar, equity markets so i think its a little bit of this. Utility are higher today, one sector doing better. Lets talk a little pimco here. Im sure people have been talking pimco to you recently. What degree are you benefiting of outflows of pimco after the departure of bill gross last friday . We dont really comment on daily flows. The flows have been strong. This year i think well chronicled we have had a good set of flows. Numbers have been good. We dont really offer get a sense for at times of inflows or any flows where theyre going or coming from. The inflows have been pretty strong across the year. We have heard on the monthly flows and seen a pickup. Wouldnt you think that you would be a beneficiary at this point . Yeah. Its not unreasonable to think. The flows persistently strong and it would be surprising if its not going to continue this week and all i say about daily flows and not unreasonable to suggest the persistence continues. We have the sound bite here of new cio at pimco. Lets just play it and wed like your reaction to it. What he is doing with the markets right now. Ive tended to focus on some of the higher return, you know, higher risk mandates with a Mutual Fund Space thats been the pimco income fund. The style, though, is very style and important to note that pimco has a very, you know, longstanding highly structured investment process and even though bill gross is no longer with us we plan to use the process for us going forward. It served clients well. Your reaction . You doing high risk, high yield right now, as well . Its a great firm. Obviously terrific results over the years. We are big believers in the way of running fixed income is stable, lower volatility. Make sure you diversify where you take your risk in the fixed income and more durable alpha and more consistent stable returns over time and we own and like risk assets and think about today. We like exposure. U. S. Is cheap relative to the rest of the world looking out where treasuries are. We like stable portfolios and have the risk buffeted in the appropriate places. Where do you think the 10year is headed . Down to 240. The forecast is we think were going to 3 . By the end of the year . Running out of time and we think yields, we are in a slowly drifting higher Interest Rate environment and think about geopolitical risk and what you talked about today. Thats probably 30 basis points of event risk priced into it. The fed moves and get you to three. May be in event risk for a longer time and think its three next year and maybe mid3s. I harp on the dollar but thats a big move to see on that so far and, you know, that has to play into the investment strategy, especially you think this continues, right . 100 . We have been on this show and other shows and think that the fed will move and march or june, we think the feds moving to a more normalized Interest Rate structure and we clearly think the ecb and bank of japan are easier for a long period of time and one thing that nobody seems to talk about, energy dynamic, the amount of dollars out of the country and what it means to trade flows is tremendously important. Everybody talks about fed ecb, nobody talks about the impact on the dollar and think theres a persistence and see it throughout the year and against a number of currencies, emerging marketing, as well. Okay. Thank you, sir. Thank you. Counting down to the close here. Little under half an hour before rering that closing bell and have a respite for what were seeing out there and we can clearly see off the lows of the day. Not nearly as bad what we were earlier and one stock thats shining green on the Dow Jones Industrial average. Cocacola currently up. 2 . Ill take it on a broadly down day. Announced the rollout of a new line of cokes. Middle medical ris and the boxes will be green and the packaging green and the compensation and talking about with David Winters taken issue with the executive pay issues at cocacola and coming up next hour here. Meantime, the next guest is ringing the closing bell on this pretty terrible day for the markets. Speaking exclusive with William Lauder after this. When the world moves, futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with paper money to testdrive the market. All on thinkorswim from td ameritrade. No. Not exactly. To attain success, one must project success. Thats why we use fedex one rate. Their flat rate shipping. Exactly. It makes us look topnotch but we know its affordable. [ garage door opening ] [ sighs ] honey, havent i asked you to please use the we dont have a reception entrance. [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. The ultimate arena for business. Hour after hour of diving deep, touching base, and putting ducks in rows. The only problem with Conference Calls eventually they have to end. Unless you have the comcast business voiceedge mobile app. It lets you switch seamlessly from your desk phone to your mobile with no interruptions. Ive never felt so alive. Get the future of phone and the phones are free. Comcast business. Built for business. We have got the worst start to october three years going on here, guys. I think with the losses today, both the dow and s p wiped out their q3 gains. A bit of an inauspicious start to the trading month and quarter, bill. Estee lauder folks are ringing the closing bell today. October is Breast Cancer awareness month. Indeed. Were joined now by William Lauder of the companies. Welcome back. Welcome become. Thank you. Glad to be here. Welcome back. Youre all about awareness for Breast Cancer and what we need to do to defeat it. What are you doing . Our theme this month is to bring it to another level of awareness and one of the things is not just the people diagnosed with Breast Cancer which is 1 in 8 women diagnosed but those people around them, family, children, friends, those people who the disease impacts directly by the patients being treated and also those around them support and impacted by the threat of a disease that is not as fatal as it used to be. We are making inroads in that regard. We started 20 years ago. My mother started the campaign 20 years ago and at that time you had a 75 chance of survival diagnosed. Today that number over 92 . 92 . 92 , yes. Thats progress. What do you make of the news this week sunday or monday with researchers saying that a drug is showing unprecedented success of prolonging the lives of women with a certain type of Breast Cancer. More they learn, the more they know how to do it better. Targeted therapies are so much more effective today. There are people being treated you might not know it unless they share it with you because the therapies so targeted. When they take chemo, whatever, they dont lose their hair. A week off of work instead of six weeks or whatever and the effect of it, its more of a speed bump than a huge pothole and obstacle and thats really due to the brilliance of the researchers and the scientists doing this work and the effort made really over the last 20 years to get the arms around this disease. We certainly applaud all that you do and ive got my pocket square. Ill put that in there heading towards the close. Let me ask you a business question. Were seeing volatility in the markets. Questions about the consumer and how theyre doing these days. From your perspective, what are you seeing right now . We see that our category of merchandise, the beauty category, is less volatile. Because of the entry price points of the products, the consumers seem to come to us first and leave us last. There arent perhaps as many people in vibrantly shopping and still seeing good, decent numbers. We always want more Consumer Confidence because more consumers seem to translate into more sales. Right, right. You know what . Its okay what were seeing right now. But generally, you want to feel more confidence out there. Our business, we seem to be okay. There are others out there doing okay and then there are others struggling. We have to continue to stimulate them but from a macro standpoint, we are not seeing if you will some of the malaise you have seen in the market. I want to be comfortable. Consumers dont flip in and out of shopping the way Stock Traders do. Super quickly, ten second, is lipstick indicator real . Is it accurate . Directional. Directional. Its directional. Whats the lipstick indicator . When youre not feeling good about the economy, you might just buy something small like a lipstick to feel better. Right . Like a bar of chocolate. I see. Maybe a bottle of wine or lipstick. It makes you feel better. Generally directional. Not a single category as much as to say those things closer to lower end of the price range that a consumer can buy to make herself feel better, generally seeing that lipstick, lip gloss, other things that theres no doubt that for centuries women have always wanted to feel better and look better and makes them feel better. Our bed rom of business is they spend it on themselves because im worth it. Thats the most important thing. All right. Always good the see you. Let me crank my microphone there and hurt it putting the pocket square in to commemorate the Breast Cancer awareness month. William lauder thank you. You can get ready to ring the closing bell. Well ring the bell. Good to see you. Thank you. Heading toward the close right now, about 18 minutes left in the session here and we have come back a little bit but lets face it, you had no idea what was going on, yes, we have had a pretty good selloff on wall street today. The dow down 218. Hold on to the hats, folks. Next, dom chu explains why the big market move may be just a sign of things to come for month of october which is historically sometimes frightening for invest to recalls. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Dad,thank you mom for said this oftprotecting my future. You. Thank you for being my hero and my dad. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance could be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Another check on the markets heading towards the close here. 15 minutes to go before the closing bell. Off the lows of the day and not looking good, right . Another, another tripledigit move there by the dow down about 210 and the s p down over 1 . Keep in mind, though, bill, from the alltime highs for the s p and dow, literally a few percentages away. I think about 3 for both of those alltime highs. Not like were in correction territory. Exactly. Just yet. Russell 2000 is but its an inauspicious start for the market. Why does october have a spooky reputation . Halloween aside. October wont be just crazy because of the crazy costumes and some expect a roller coaster ride for the markets and heres the reason why. Since 1929, there have been 91 times that the s p has traded up or down by at least 6 in a single day. Thats a massive move. Now, of those 91 days, 23 of those big swing days happened, yes, in the month of october. One out of every four of the most volatile days in the market up or down have happened in this month including, of course, the worst day ever for the index, that was the 20 drop on october 19th, 1987. That was, of course, black monday. To be fair, of those 91 days with swings of at least that 6 , more of those days have been big up days, 49 versus 42 big down occurrences. This isnt to say that octobers going to be volatile. But in the past big market swings have been big in this particular month so, mandy, bill, coming to october one reason why investors are bracing a little bit more some of that same volatility we have seen. Back over to you. We were talking to mr. Lauder about that. Whether or not the Market Driven by the fundamentals or the seasonal factors that come into play this time of year for whatever reason. But the Fourth Quarter, a seasonally strong time, right . Maybe theres some cross currents and we see some of a santa claus rally if you will by the time thanksgiving and christmas come around. Okay. Thank you. Thank you. Unlucky 13 minutes away from the closing bell. Just to keep up the spook factor here. Okay. Scaring the kids now. Dont mean to. As you can see, the dow coming off the lows down triple digits and not by any manner of means as bad as it was. Activist investor back with us, emerging a winner from the battle with coke. Over what he called an excessive executive pay plan that was announced several months ago. Hes here exclusively to explain why hes still unhappy with cokes management even though they have announced a change in that executive pay plan. Thats still to come right here on closing bell. Tdd 18003452550 even on the go. 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Tdd 18003452550 your goto for trading knowhow. Tdd 18003452550 ten minutes to go here the dow come off the lows down 208. Art cashin telling me early on this hour a billion and a half to sell but thats swung the other direction. We have about 150 million to buy so not a whole lot but youre not seeing a tremendous amount of selling into the close here. Joining us now is david nelson of bell point Asset Management and bill gerald. Great to have you on an actionfilled day. Today we have probably a little bit too much. What is your read, david, on whats going on today and whether or not its spelling a bad october . Well, we are certainly starting off badly. We were the last man standing. Everybodys piled in to the large cap trade. You know, i think there are two things investors trying to get a handle on. One is the rising dollar. Im very interested to see if we have lost competitiveness when we start to hear the Conference Calls next week. You think its a net negative opposed to a net positive . Net negative for large cap stocks. A tail wind. Now a head wind. Terry waiting for a market like this. Are you going to get in now or what are you going to do here . I figured an uptick in the volatility and kind of saw and at this point, you know, kind of in a technical spot right here which is kind of i havffy. People are comfortable watching the dips so long and watching the results be positive and might need to puke them out harder here. To use a technical term on the Trading Floor here. Yeah. We could go harder, maybe 300 points or so in the dow but not to say all the tenets of the rally arent intact. So some of the tenets are basically in place. We have good growth. Steady growth. Slow but steady and could lead to a great recovery over the next decade, as well. Im curious from terry where the line in the sand is. Some point we have to reassess and circle wagons. I was kind of thinking around 1943, the 120day. What number are you looking senate. 1920 now in the s p. 1920. Way they broke down here, you know. Again, this is a critical level like you were just suggesting around the 40 level critical and looks like we will have to go further. 1920, okay. A few charts when we come back an see how close we are to that number right there. Hold that thought. Take a break here. Also after the bell, much more on this market selloff and whether or not this is a sign of things to come or a fantastic buying opportunity. Youre watching cnbc, first in business worldwide. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. 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This is the s p that all the traders watch. Hit our low for the day as mandy and i were coming on the air at 3 00 eastern time and its since come back but still a decline of 1. 1 . Coming back to that in a moment. Whens done well lately is the volatility index which is up 44 just in the last month. Today up 2 although much higher than that earlier so as the stock market was coming back, volatility was coming lower here, as well. One more thing to keep an eye on. 10year yield thats dropped now below 2. 4 . Look at that. 2. 39 so theres been a rush to safety i guess to some degree for the 10year here. Well, it is interesting with the 10year. You know, its been baffling investors and me at the beginning of the year as yields head down but i looked at the bond gurus and theyre right. Its a european bond market acting as an anchor for our yields here. The good news of the chart of earlier is at least we held the line in the sand today and talking about it before around 1940. Thats the level we hit today and bounced off of but youre watching a lower level. Only because if it breached 1940, looking lower here to around 1920 level and the next support in my mind would be and support here 1940 on the charts back a while and i think that thats what were seeing here. I hope hes wrong. You hope hes wrong, why. Bounces off of here and doing now and again i dont think the market i think healthier for the market to have a stronger down rather than the complaints to see if its okay to buy the dow, buy the dips and sell them tomorrow on the rally. A buyer or a seller today . I didnt do anything today. Im not an entire or a seller. Ill step back and see how it shakes out. Im nervous. About what in particular . Action like this, the action in the last couple of weeks, a stealth correction all year and whats interesting, i want to see what small caps do. They have given back all the outperformance for the last five years. Might be a buying opportunity there. Its my bad. We should have showed you that russell 2000 index business thats now 10 below the alltie time. 1,200basis point difference. What levels are you looking for, terry, with the small caps, with the russell 2k . They seem to have been a leading indicator of where the market is headed and the question is which way which indicator to look at. Trying to find a bottom in the russells, you know, is hurt a lot of investors along the way so far. So id be more inclined to see if it turns before i participated in the russell and might see follow through in the other indices relative to the russell. Leading to the downside. Now the s p mid cap starting to see erosion, as well. Seeing that in the lower tier stocks right now. Thank you for joining us. Thank you, guys. Thank you very much. See you tomorrow. Do this again. See if the selloff continues. Thanks, everybody. Just off the lows of the day down 235 on the dow. Stay tuned for hour number two of the closing bell with bell, kayla and the reform broker himself downtown joshua brown. Well see you tomorrow. Yes, bill, thanks. We are all here at post 9 and joined by kayla taushi and josh brown and finishing up a pretty terrible day on wall street. Dow jones industrial average settling down nearly 240. Nasdaq with a rough day, as well. Down more than 70. Real story in the russell 2000 now firmly in correction territory. Down 10 from its highs. Josh brown to you first. Does this get worse . Think people hearing the bad d news all day. It could get worse but you have the russell, the iwm lets look at, at a 30 rsi. Relative strength index in a 14day period. Every single time weve been here, thiss a tactical buy. We have a huge bounce for that index and i think its worth paying attention to. On the s p, the big caps, this is the seventh time since june we have seen the buyers come in at the 120day moving average. I dont know why thats where we seem to have support and they came in every time. This is the seventh time and, again, i think its noteworthy theyre responding when prices goat a certain level. Thats the good news. You already know the bad news. That being said, we are only 3 off the all thetime high for the dow and not that much and with strategists calling for a 5 to 10 correction, as a normal pullback, considering how far we have run up, do you think that today is anything to really be worried about . We heard Money Managers saying im not just watching today. I get that. Everyone wants to buy the dip until its here but welcome to the Fourth Quarter and october. This is what the market does. If you look back through history, the second two weeks of september are usually the worst. We got that this year. After alibaba, the selloff began. October is wimpy and the market bottoms and so far the script is going according to plan and i would not be shocked to see us go through october with more volatility. Thats what history says this season can bring. Look. Perfectly acceptable. Even to a bull they would say right here and right now to pull back. Finally give us the 5 to 10 pullback to feel better and step back in and buy. I have news for you. You got that 5 to 10 . You got 10 in the russell. You got about half of the russell and most of the mid cap index below the 20 and 50day moving average. The typical stock is nowhere near where the s p price index is. You have a handful of mega cap names that held up the big indices but you have the dip and for quite sometime. You have a buyback in the dividend cycle nearing the end. Now companies not only rely on the earnings per share and theres expected to be a little bit more cap x coming into the market. Charles schwab with a note saying we are getting to the point where companies will start reinvesting in their own growth organically but do you think it takes away from the Financial Engineering that pushed the market to where we have seen . If you believe the typical strategist on the handoff, theyre okay with it. Thinkd rather see an increase in volatility as the buybacks subside and then more money put to work in the real economy. Getting through a period of that changeover, its not the end of the world. They hurt for a little while. Ask this question one more time and asked on the halftime show and elsewhere on cnbc. Did the spectacle of alibaba mark the top . I know a smart guy that said it did. You do tend to have the clusters of huge deals, big m an around market tops f. Thats the top this time, its poetic. To me it seems too easy. Too scripted. As of right now, 2019 on the s p appears to be the tiptop of the market so alibaba would be the top seemingly. To the minute, to the hour, i mean its pretty dramatic. And for that reason, its probably too simple. The smart guy isnt wearing a black blazer right now, would he . Dominic chu oh man. He is out there somewhere. You are on the board. What did you take out from the tape . Wasnt me. Whats happening right now. The down volume is immensely outpacing the up volume and settling things out. Down voluntarily youm 705, 706 shares. The buy to the downside. Overall picture of whats moving, this was a flight to safety type feel today. Utilities, the single, the one only sector in the s p that was positive and positive to a good degree, so that tells you people are moving back into that yield play if you will. Also, whens helping things out is the fact that the 10year u. S. Treasury note is back to onemonth lows, 2. 4 and as the rates go down, the attractiveness of yield plays comes back all over again and one other thing to focus on here, we have been talking all day about the idea that there are a number of thing that is are getting involved with this kind of downturn, factors coming in. One thing i had not mentioned that i got tweeted about quite a bit and people messaged me quite a bit, hey, dom, when about the fed taper . We are going to the Fourth Quarter with the fed taper off the table going into 2015. Thats got to have some effect on the market and yes, and thats a fair point. The fed taper or we dont know what happens and the market reaction, thats a big deal and i would say if people are still buying 10year treasury notes to the tune of 2. 4 yields and this idea that earlier today, kayla, josh, scott, that the German Government for the First Time Ever was able to auction off 10year government bunds with a sub 1 rate tells you theres no real fear of growth or inflation at least in certain parts of the world, guys. To be clear, looking at october, yes, start of it today ugly. Since 2000, only four down octobers. Right. This notion that october is always a bad month simply because there have been some market earthquakes in the month of october always a volatile month but not always down. Youre exactly right. Well sort of look. Well see how it shakes out. Hard to look at it that way. Every month, though. The first one, two days of the month. Worst start, best start to the month and not enough data points but when you have yet another tripledigit move this time do the downside and 10year sub2. 4, thiss a place started off and ended up with the third best august of all time. We were up almost 4 in the broad indices and that month off to a rocky start after a july selloff so, you know, its one day. Lets bring in Nathan Bachrach for his take on the Market Action and where we go from here. Nathan, welcome back. How do you feel about the ominous start to october . You know, i dont really feel bad because to be honest with you this is a normal process. Im saying far while thats whats going to affect our markets doesnt have a lot to do with whats going on here. I understand the supply management had what number and overblown so if you accepted that number was right then youre disappointed right about now but lets take a quick tour around the world. Demonstrations in hong kong. We have got a europe finally we now finally learn that the european economy has no clothes and germanys going to have to figure out and draghi most particularly has to figure out how to get a version of qe without having the authority that his buddy janet yellen and bernanke before her had. When you take a look at everything external, it explains eventually the top of a flagpole, people only got one thing to shoot at and then negative expectations start to come in. I think we are doing fine. Small caps going to have a problem. Theyre afraid right now and i dont think correctly that the cost of moneys going to start to go up for small caps. I dont think it is. Large caps are the only thing thats done well. But this is probably a good sign when you look at the portfolio. The bonds have done very well and i had a call on closing bell two weeks ago and said lqd and buying long because figured that rates would come down getting some disturbance in the force if you will. Speaking of disturbance in the force, my Young Padawan dom chu, 4 trillion of stimulus sounds like a lot and the fed tapering to like 5 billion to 15 billion. Take away nine zeros and a 4,000 item in the budget and 15, would you notice it and care and make a difference . Nathan, i would absolutely notice it and thats why i agree. A fair point. Lets not forget. This is an unprecedented Stimulus Program and nobody really knows whens going to happen when things unwind. Thats the point. Dominic, one thing we do know is that the impact on the economy if the ecb does fullon qe cannot be foreseen and a party in the stock market because it happens every single time. We have seen that before, youre right. Japan, theyre buying etfs. Theyre not even worried about treasuries. Theyre buying tell you why im not worried. Take a look at gold today. Gold up four bucks on a day like this, on a couple of on a weaker day like this. Ing ins happening. Trust me. This is just a little glitch. Were almost ten minutes in and talking about the market we have not mentioned the slide in crude oil and the effect, josh, that could be having on the market. Crude had a reversal. It was positive throughout most of the day. It reversed. And the market accelerated with it. Energys got a problem and if energy has a problem the s p might have a problem. Well, if you buy into this concept that the markets biggest fear right now is deflation, then yes, you dont want to see broad selloffs in the futures markets, talking about oil or agriculture which is atrocious this year or any of the other hard assets. I think that frightens people and it certainly has a big impact on sentiment. Nathan with all due respect the psychology of the market and we look at a chart like that, in the commodities complex and bears are watching crude oil as a sign to see it fall off 0 a cliff like this afternoon as one of the most bearish signals. We look at whats happened in news about ebola and, of course, that fat finger trade in japan overnight to talk about later. All of that is contributed to a very soft psychology in the market today. But when you talk to your clients, is that resonant in main street america . Are the clients calling you today and voicing the same concerns or something that we just feel here at post 9 . I think to be honest with you its a post9 phenomenon. Out where people have diversified portfolios, they dont look at it every day. They look at it today. For every penny a gal listen of gas goes down on a yearly basis, another billion dollars goes into peoples pockets and then a chance to circulate. So actually, i believe it has a positive effect in this very much of a positive effect in the short term when you ask somebody, how are you doing . Theyre likely to say im doing better. The dollar seems to go more because if at the Interest Rates are low, too. Yeah. Interest rates are low. Nobodys buying houses and nobody can afford them. Thats another issue, kayla. Nathan, thanks for joining in the conversation today. Appreciate it very much. Dominic chu, thank you to you on the floor as we watch how this whole thing is starting to shake out in october. Traditionally the first day doesnt tell the story of the month. Sure. This is within of those day that is got nasty and starting the look at small caps, people have been discounting the fact theyve been so bad. They lead on the way down. They tend to lead on the way up. People Pay Attention now. I think so because what you were hearing is dive vur intelligence. The russell bad out of the gates an recovered in the spring, it was for like ten minutes and every single time the russell stretched to the downside everyone would point to facebook, google, gill yad, the market is fine. You are a narrowing list of names powering the s p 500. Now the s p 100. Thats not sustainable. You need the russell to bounce or not. The answer obviously we know now or not and dragging Everything Else down with it. It should not come as a surprise. Okay. Well, big newses on pimco and how much money is really coming out of the fund. Thats next. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple, unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Or a helping paw ater, Everyone Needs a helping hand, so mattress discounters good deed dogs is raising money to help train Assistance Dogs for wounded veterans. Veteran i live independently because of what all it provides for me. And its huge theres a lot of wounded, ill, and injured out there just like myself, who just maybe need a little bit of help. Tag you can lend a helping paw too. Give at mattressdiscountersdogs. Com or any mattress discounters. Mattress discounters good deed dogs helping dogs help people. Welcome back. Breaking news now on exactly how much money is coming out of pimco. Kate kelly has the details. Thanks so much. Pimco reporting that for the month of september which, of course, when the infamous strategist bill gross unexpectedly decamped far competitor, they lost 23. 5 billion. Leaving them now by latest calculations with less than 200 billion. Although very close to it. The amount of money they lost in september actually more than a number of the companies that make up the s p 500 in market cap just for comparisons sake. Again, a pretty large outflow on the heels of grosss exit, scott, and this is sure to get people talking about whats next for the company amid this turbulence. No doubt. Kate, thank you. Stay with us. Lets get reaction to the huge pimco news. Joining us now is kevin oleary and Rick Santelli. Kevin, you hear the numbers, projections of some on wall street saying high 200 billion to 300 billion by the time its all said and done. Is it fair to ask the question, does pimco fully recover from bill grosss exit . You know, scott, heres something to understand about fixed income investors like me. I own a manager in the fixed income manager. Were boring. We dont like excitement. We dont like star managers and news. We dont like you talking about us every day at 4 00. This is horrible to keep assets because what happens is any controversy in Institutional Investor thats buying bonds which is the most boring asset class which i love doesnt like this kind of news so, of course, they exit the manager. When you get a star manager like bill gross exiting, you cause chaos within the fund family and exactly what happens. If im managing that forever, if i was pimco, even if bill died, id stuff him like weekend at bernies and stick him in a chair. I dont want any news. I dont want him going anywhere. Youre measuring it by the billions of dollars. 23 billion is five fund managers, its five separate companies, its a huge amount of money. I hate star managers. This is horrible. And youre seeing the results of whats occurred. Yeah, but, kevin, twittersphere will love the comment but, rick, 23. 5 billion, 10 of the total return fund, but that is as kate just said larger than much of the s p 500. We talked about the pimco effect in the fixed income market on friday and also coming into the beginning of this week, but what affect if any can you see in the fixed income market on all of these assets moving around . Well, based on the investigation you gave me, we can do that quite efficiently. For the month of september, 23 billion outflows, we know they had a huge position in 5s. Where were they at the end of the august . 163. Where are they right now . 167. Where were 10s end of the august . Around 234, 235. Where are they now . 238. Listen. I understand that the only thing the median general loves more than building the funds up, bill gross was a friend of many, they come the other way and in terms of what i do its about the markets and i think that digestive process is glitch free. How much bigger it gets, i cant answer. The real question is, how much cash does pimco have to offset selling some of the securities and also have a big presence in futures which are highly efficient and highly liquid and of course the other question is, when you get redemptions, if they really do sell the securities they turn it into cash, that cash then, of course, has to be adjusted. But maybe the cash that the investors get goes to another firm that has to come back and maybe grab the same assets so the question is, how much ends up in the spit bucket . In other words, how much leaves pimco but doesnt end up in somebody elses pocket in thats what the markets going to have to process. Kevin and josh, i dont know if you watch the pimco leadership on cnbc yesterday but id be curious to know whether that appearance stemmed some of the outflows or increased them in terms of, you know, what impact it had. Because that was the last day of the month. Let me give you my take on it. News is always bad when youre managing bonds. You want no news, boring. No controversy. You dont want any managers talking about anything. Youre talking about making pennies in front of a steam roller. As soon as theres controversy, you exit. And rick made a great point. Lets say im an Insurance Company indexed on the 10year bond. I have a 10year portfolio. I dont care pimco manages it some xyz company. I take it on pimco. I cant stand you talking about it every day at 4 00 and give it to another manager and buying long 48 10years. My point is pimcos pain is going to be blackrock and vanguards gain. To a much lesser degree, though. Ricks point is well taken about the spit bucket. The inflows have been in the hundreds of millions. Up until this point. The last figures i saw. In a week. Sure. Only in a week. Inflows today i think 1. 65 billion and thats obviously a drop in the bucket of the 23. 5 pimco lost. However, the fact it doubled from august to september is notable. Sure. You may see a dispersion of funds. To fol he on the point of not wanting to see the boring bond manager in the media and the midst of firestorm of publicity, if hes correct on that, which he may well be, and i think the real risk is to janus shareholders, they made a conscious, public decision, done with star managers, going to be a team approach. They were never going to play up the gunslinger again and hired the most famous, biggest gunslinger active manager maybe in the history of the industry and what we still dont know is how much of the firm bills getting. Does he own 5 . Does he own 10 in could it conceivably be more . I think if youre a shareholder in janus you had a nice ride as a result of this news but thats the risk because we dont know if the culture works with well this star approach all over again and might be a flashback to the dotcom melt down last time down this road. Kevin . I totally agree with the strategy. I hate star managers. You never know when they go nuts. That story that david faber broke last week about the five managers going to war and flying to geneva saying its us or bill, i dont like that story as a bond investor. I dont like chaos, controversy, any of it. Im making 2. 4 on a 10year. I dont need the drama. Frankly, if im a janus shareholder, i would be a seller here. I agree with that point. The numbers to get your total return, triple that yield to get the total return and 43 years, mr. Gross doing that and might have been the greatest move janus makes in the history and once more, bill gross anything but low profile. He raised the stature of a single man having huge success in 43 years. He lives large and my guess is hes going to live large at janus, too. Maybe hes gone nuts. Much easier to manage money that was the problem at pimco. Turning a battleship in a toilet bowl. I have seen a million ctas and commodities too big for the size of the market and i think that was the biggest only saying, rick, im only saying maybe going to be as good on the angels as he was in his previous life. Guys, well end it there. Up next, as the texas ebola patient is in serious condition, concerns mount. Well talk to nancy writebol. She had it and she survived. Thats after this break. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back. Dallas is the focal of Public Health in america. A patient in an American Hospital has been diagnosed with ebola. Cnbcs meg tarrel is in dallas. Nbc news confirmed the name of the patient, thomas eric duncan. He flew here from liberia, arrived in this country on the 20th and four or five days later he started showing symptoms of ebola with a fever. Came to the hospital for treatment. He was came in on friday and then not admitted, discharged after a miscommunication here in the hospital and then came back on sunday and then was confirmed for ebola just yesterday. Now, the cdc is sending ten people here to dallas. Theyve got them on the ground. Director saying theyre stopping ebola in the tracks here in the u. S. Sentiment echoed by state Public Health officials in a News Conference today. This is not west africa. This is a very sophisticated city. A very sophisticated hospital. And the dynamics are so significantly different than they are in east africa, excuse me, west africa. Reporter governor rick perry also speaking at the News Conference today underlining the states preparedness. No place in the world i will suggest to you that has better professionals, better ability to address this than in texas. We wish it were somewhere else but the fact is its here. And we have an Extraordinary Team of men and women, passionately and compassionately delivering care to this individual. Reporter now, hoelt Officials Say theyre monitoring any of the contacts that the patient may have come in to contact, 12 to 18 people they say to contain the spread. Scott and kayla, back to you. Okay. Meg, thanks so much. Want to bring in nancy writebol, one of the few ebola survivors and a missionary nurse who had worked in west africa this summer. She, of course, rushed back to the United States with a care received help her beat the very deadly virus. Nancy, great to have you. Thanks so much for coming on the show today. Most importantly, how are you feeling . Im good. Thank you, scott. Thanks for having me today. Im wondering if you can give us an idea of what this patient down in texas is going through and how the medical staff down there would be reacting. Well, i think the medical staff is probably reacting in a just great and as has been said a very compassionate way. Hes probably experiencing fever, maybe some vomiting, just weakness. It just depend on how the virus attacked his body. Nancy, we just looked at a time line of this patients travels, back to the United States. His visit to the hospital. He was discharged and only given antibiotics. He wasnt asked about his travels which does raise some questions. Im wondering, as a nurse yourself, what questions do you think doctors and nurses and parents for that matter need to be asking when they spot certain symptoms without being a fearmonger. What should we be asking and looking for . Well, i think one of the most important things is the contacts. You know, where have they been coming from . Who are the people they have been in contact . For west africans, of course, there are questions like, are there Family Members you have been in contact with that have died . You know . Its about where people have been and their contacts and thats those are very important questions. What kind of symptoms are you having . And knowing the symptoms that are part of the ebola virus. Nancy, how concerned should all of us be here in the United States . People hear ebola. They hear the first case diagnosed here in the u. S. They think, outbreak. Maybe that wont be the case. We certainly hope not. How concerned should we be . You know, i think that we have some of the best medical care in the world. And its totally different here than it is in west africa. And i would just say dont panic. And allow the cdc and the doctors to work in a way that they know, they have treated ebola here now. And they have had the opportunity to see how the virus acts and so when you have a person that comes in and is diagnosed with it, you have doctors on the ground who know how to care and how to find contacts that may have come in contact with the sick person. Nancy, for missionaries or medical workers considering traveling to liberia or west africa to help combat this virus, what would you say to them as someone whens been there and seen it firsthand and you know the risks of getting sick there . Well, i think that for any of us, it is a concern to follow protocol in protecting yourself. Being safe. And not taking any undue risk. Nancy, we are glad youre feeling okay. Love the big smile. Thanks. Hope you continue to do well and talk to you soon. Thank you. Thanks so much for having me. All right. Nancy writebol. Moving on, it is no secret there are problems at the secret service. And now, the person at the top of the agency is paying the ultimate price. That storys just ahead. Activist investor David Winters may think things got better with cocacola today. He wanted big changes in the Compensation Plan and today he got them. Hell join us in an exclusive interview coming up next. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. [b ll rings] time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. Or a helping paw ater, Everyone Needs a helping hand, so mattress discounters good deed dogs is raising money to help train Assistance Dogs for wounded veterans. Veteran i live independently because of what all it provides for me. And its huge theres a lot of wounded, ill, and injured out there just like myself, who just maybe need a little bit of help. Tag you can lend a helping paw too. Give at mattressdiscountersdogs. Com or any mattress discounters. Mattress discounters good deed dogs helping dogs help people. Welcome back. You are looking at the dow, 16,804 closing down 238 points in todays trade to start off the month of october and Fourth Quarter. Cocacola, though, seeing news. Changing the pay plan for executives after several shareholders including Warren Buffett expressed concerns. David winters is one of the first to lambaste the compensation republican and exclusively he joins us now. David, welcome. Scott, its great to see you. David, i see a headline here saying buffett gets his wish. Coke revising executive pay plan. How much credit do you deserve . I think wintergreen deserves the credit. He sat on his hands and we think he threw the principles out. You know, david, that if Warren Buffett didnt speak up the board they probably wouldnt have done anything and given you the heisman like before. Well, i think its a number of shareholders. Once the s. E. C. Filings came out, scott and kayla, we see theres widespread opposition and that the board, in fact, one of the Board Members made a statement that they had wide support and they didnt. David, when you look at the changes that the company made now roughly a third of the executive compensation made up of stock, the rest will be in earnout and paid out with certain stock awards, if they meet performance goals, thats much different than 60 stock, does that make you happy . The makeup. Kayla, i think its a vague announcement that needs more particulars and a move in the right direction. Its cocacolas public admission that the plan was a bad plan and that what they have told shareholders over the last many months was incorrect so we think change is coming to coke. There needs to be improvement in governance and operations and we think that will improve the coke stock price over time. Hi, david. Its josh brown. Do you worry at all about the paradox where, yes, youre empowering people and putting people in a position to earn what they take home and hit goals, but by the same token, that can lead to some shorttermism. We had a share of that down here on wall street in the last decade. Does that concern you at all with stock based compensation in general and coke specifically . I think youre right on the nose. It has to vest over time and a clawback and remember the people who have admitted that they did this bad plan are the same people in place. So the question is, josh, do you need change at cocacola . In terms of refreshing the board and potentially you want to see more than just a new comp plan. You want to see some swinging doors . Well, i think the comp plan was a bamboozle and this new release, you know, is an improvement but theres more to go to improve cokes margins. All right. Are you suggesting, david, that youd like a new ceo . Well, i think that, you know, we deserve as cocacola shareholders to have the best in the slot and the current ceo is one that delivered a plan that was massively dillutive, told the world they had all the support. And, in fact, they didnt. So i think thats a problem because trust is the basic essence of investing. I think, david, the board should get a little bit of that blame, as well. Wouldnt it be easier to put up a slate like a shareholder would in any given fiscal year and bring it to the shareholder vote next year for the annual meeting . We hope that cocacola as they made progress and certainly pressured by wintergreen and others to make progress here and we hope that they are willing to reexamine cokes operations and whos on the boertd and whats in the best interest, because cocacola for us a longterm invest. Were an activist and want to protect our investors and want to own coke forever and compound. Forever . Well, you know, look. If you can own a great investment and its a gift that keeps giving, and it can compound tax free, thats a beautiful thing. Thats how you get rich. Thats our goal at winter green. A victory for activist investing . I think a victory for all longterm shareholders, america we are not going to have management clipping huge portions of returns and i think its a victory for wintergreen investors. All right. David congrats. Thanks so much. Great to see you all. You, as well. Breaking news on argentinas central bank. Argentine stocks down more than 8 today amid rumors that the head central banker resigning. The argentine government just confirmed that juan carlos baraera resigning and replaced and unconfirmed by the government. Kayla and scott, yeah. So a lot more uncertainty when theyre technically in default and u. S. And Foreign Investors holding the bonds hoping to see some upside down the road. Okay. Thank you so much. Speaking of being replaced, word from the white house, a little less than an hour ago, of a change at the top of the secret service. Julia pierson is out as director of that agency. Well get the latest details in washington next. And can a triple murderer on a federal penitentiary va video games all day on a tablet . Yes. Well have the shocking story next. Thats my kind of jail, scott. If you were a denture . Take this simple test. Press your tongue against it. Like this. Ahh it moves, unlike natural teeth. Did you feel it . It can happen with every denture. Introducing new fixodent plus truefeel. It helps keep denture firmly in place, with its smooth formula free of flavors and colorants. So you get a closer feeling to natural teeth. New fixodent plus truefeel. Fixodent. And forget it. Bullets fired at the white house. Is secret service didnt know. An excon on the elevator with the president. The secret service didnt know. A white house fence jumper makes it to the east room before the secret service stopped him. Three strikes an youre out at the secret service. Right . Reporter yeah. Thats right, scott. The news coming late this afternoon that Julia Pierson is out as the director of the secret service after yesterdays disastrous testimony on capitol hill about that series of problems that you just listed involving fail yurls at the secret service. The new acting director of the secret service they say will be joe clancy and the white house saying that they only learned about this incident that you mentioned involving a man with a gun on an elevator with the president of the United States minutes before it hit the press just yesterday. Heres white house spokesman josh earnest talking about all of this a few minutes ago. This afternoon, the president had the opportunity to telephone director pierson to express his appreciation for her service to the agency and to the country. She dedicated more than 30 years of her life to the United States secret service and to the important work that they do over there. Reporter now the replacement is joe clancy and he is until very recently executive director of Comcast Cable security. Of course, comcast is the Parent Company of this network. Clancy is a Longtime Secret Service veteran. The white house saying that they feel that he is the man for the job. In order to get this secret service situation fixed. A big problem here in washington. No doubt about that. Thanks. Kevin, your response to this almost unthinkable story not only of the elevator and now the fallout . You know, its interesting because just two weeks ago we shot a sequence of shark tank at the white house and Michelle Obama loves the show and we wanted to support the investment in veterans and went to the white house to do it and met the secret Service Staff that worked there. Fantastic staff. But, you know, one of the mandates that we have had the white house since its inception close to 200 years ago is we as americans can visit it. We can go there and see it, touch it, feel it, walk in it. As a result of that, you have the risk of these kind of Security Breaches and i must say millions of people have gone to see the white house. The east and west wing as i did during the period we shot shark tank. I appreciated that opportunity and should we take this Security Breach where nothing actually bad happened and change that mandate that would be a failure of the original founders of this country to give us access to the but, kevin, i mean, a guy with a gun in an elevator with the president . Yet nothing happened, thank god. You know, theres a lot of guys with guns in that white house. They just dont happen to be this person was not part of the secret service. But the truth is that person who ran across the lawn and i spoke to one of the chiefs of security there. They dont want to shoot you. They have 80 attack dogs. They have technology to look at the body running toward the white house and where the bullet came from. Thats the most secure place on earth. If i had to go anywhere on earth to save my life, it would be there. The windows are four inches thick, scott. Nobodys going to die there. I think these sound really, you know kevin, a bullet pierced a hole of a white house window i have to take the other side of that. I dont see why in 2014 were still running tours of where the president of the country lives. A huge expense. Something thats probably a guy that tackled him on the way out after a shift. He wasnt patrolling. Crazy. I think the white house should be harder to get into than peter lugers. I went there and i want to go back and eat in the kitchen like kennedy did. We have to go. So do all of us, kevin. We agree. Crime doesnt pay. Goes the old adage. It does if youre jpay Offering High Tech Services to inmates. Those inmates somehow are paying up for it. Well give you that story up next. train horn vo wherever our trains go, the economy comes to life. Norfolk southern. One line, infinite possibilities. Would you believe that inmates the some maximum Security Prisons have the same access to technology, such as email and stateoftheart tablets as some of the rest of us . Doesnt even matter whether they are doing time for minor drug offenses or for more serious offenses like homicide. In a joint project with the center for public integrity, we gotten a exclusive look at tech behind bars. C. Listen to that, thats up there, i can go ahead and get in my email. Reporter this could be anyone using technology. Whats your favorite game . Suduku. Reporter except one big difference. We are inside a maximum security prison. An advantage, its a blessing for us to be able to have t you log into the kiosk and, boom, there it is. Reporter thomas drumgold, an exmarine, is doing time at the north dakota state penitentiary for possession of drugs and guns. Pandora. Holy. Reporter the prison contracts a Company Called j pay, which provides a wide range of Technology Services and products to prisoners, everything from email attaches photos or even videos, they actually can send video messages. Reporter to tablets. How much did that cost you . It was 59. 99. Reporter and music downloading services, similar to itunes. I listen to a lot of rock. I listen to a lot of metal, actually. Reporter you can even try it before you buy it. Theres also video visitation. 12. 95 for every 30minute session, where loved ones can see and a talk to prisoners without even leaving their homes. And j pays main business, electronic money transfers, which helped to bring in about 50 million in revenue to the company last year alone. Family members can transfer money to inmates via a computer or smartphone and then inmates can use that money to purchase all these other j pay services. The facility houses over 700 male inmates. Warden colby braun oversees the prison. I think its crazy we are aing through type of technology within the prisons. Reporter he wasnt easily sold on j pay. Initial reaction is no the fear was the original can they access anything else through technology . Reporter but now over 50 of the population utilized j pay in some form. Its almost that instant gratification, same as we get with text messaging. Our thanks to dina for that were are. Orange is the new black makes it look a lot different. It wont be blue, but pepsi says its news soda will be true. Pepsi true promises to be a healthier cola. Sarah eisen joins us with the details when we come back. You do a lot of things great. But parallel parking isnt one of them. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. Want to change the world . Create things that help people. Design safer cars. Faster computers. Smarter grids and smarter phones. Think up new ways to produce energy. Be an engineer. Solve problems the world needs solved. What are you waiting for . Changing the world is part of the job description. [ male announcer ] join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. Welcome back. Breaking news on directv and the nfl. They have signed a multiyear deal to renew the sunday ticket package of every sunday afternoon out of market game a new multiyear agreement. This was the final year of a fouryear agreement with an estimated 1 billion value on a deal there have been reported the new deal is as much as 50 more valuable than that for the nfl, as much as 1. 5 balance year and could be as long as an eightyear deal. Back over to you. Wow. A big linchpin of the at t purchase of directv. So i know that both parties are probably glad to have that. I wonder how much my bill for the nfl ticket is going to be going up now. Yikes. You strike me as a red zone kind of guy. I got the whole thing. Doing the whole thing . Yep. Pepsi is going green but not the environment the company is concerned about, its health. Yeah, sarah eisen joins us to explain. Got the green can and everything green as in natural. This is pepsis first steviabased cola in the u. S. , launch exclusively on amazon. Com, interestingly, in the middle of october. It has stevia, but it also has real sugar. Pepsi says 30 less sugar than, say in a regular pep cism the key here is that there are no artificial sweeteners or high fructose corn syrups part of pepsis strategy here in beverages to move where the consumer is going and that is zero or low calories, through waters and juices and now, naturally sweetened cola. This is actually medicalry, what its called, not a low calorie. Coke has its own version called cocacola light, which is also in green packages, also has stevia and real sugar and is having somewhat of a lowkey launch as well, being rolled out in fresh markets across the southern states. Perhaps one reason for the all the caution on the launch this is a big experiment. We have never had steviaflavored drunks in this country. It took three years for pepsi to develop this one. If you look back to 2004 when splenda was all the rage, the rollouts from pepsi and coke didnt actually go anywhere using splen d. A. The bottom line here is the backdrop is tough, soda sales falling the last decade. Now diets are falling even faster than overall sodas. People dont like artificial. Stevia holds the promise, it comes from this natural plant in paraguay, of all things, using the leaf, get a zero calorie, very sweet kind of flavor but a bitter aftertaste, you can taste a little bit in here. Thats why they are balancing it out with the real sugar, guys. Now i got to go buy the paraguay etf . You can source it across south america and north america. Stevia is hot, using it in foods, yogurts, not just beverages. All right. Thanks for that, sarah. We will try it you know what else is green and you can get on amazon . Surge. Yep. We will see what you get. Fast money coming up in just a few seconds. Melissa lee uptown, whats on tap . We have got the Biotech Company trying to develop a vaccine for ebola joins us exclusively on the show. All right. Thanks, guys, this is fast money. We start off with a market alert here, a lot of red on the screen, the s p down, nasdaq deep in the red. Russell 2,000 officially in correction territory. Major fear factors weighing on stocks, concerns over owe bole la potentially spreading, hong kong protests, a European Central Bank Decision tomorrow and the jobs report on friday. Lets break down the selloff with our traders, tim seymour, john najarian, brian kelly and guy adami. Brian kelly, guy to you, seems like around the world, there are things to be leery of. Yes, and economically, we have seen some slowing of all the economies out there, we saw