Well have rob sands join us to discuss the outlook for the beer business, in which theres a lot of news in the beer business lately. Yes, there is. Meantime, constellation may be hitting new highs, but gopro sinking to an alltime low. One bull says this makes it a cantmiss buying opportunity right now. Thats coming up. Lets get to the markets for this wednesday. Dominic choo is covering all the action. And jackie will be checking in at the nymex. Dom, another volatile day here. The dow up 170plus points in one point. A lot of the themes that have been happening. You mentioned whats happening with energy and whatnot. We were just taking a look here. Up by about 8 , 9 . You can see this after the company yesterday slashed its board from 16 members down to nine, but then increased it by two to accommodate carl icahns board nominees. Oil, gas, copper, materials, energy. That big slide taking its toll. Earlier this morning, pure storage went public. Priced at 16 a share. They raised about 425 million. You can see its been drifting lower. This is important because many view this as an indicator, a barometer of what demand could be like the next coming three or four months. There could be some effects there. A Big Tv Company in the caribbean to pull its ipo yesterday. A number of themes developing here. Pure storage, the biggest Venture Capital backed tech company, so could be a big sentiment gauge. Thank you, dom. Crude oil now at an impasse. What happened . We got all the way up to a session high today of 49. 71 and then crude oil got slammed down. The catalyst was the eia inventory report, but weve seen a lot of volatility. If you get back to the discussion of whats moving what, is crude moving the equity market . Is the equity market moving crude . Either way, both remain equally volatile at this point. A lot of bears on wall street continue to say that crude is going to remain lower longer. Even if it does pop back up over that 50 level and hold over these hundredday and 200day moving averages, crude is still 50. If thats whats slaying equity markets, traders really need to think twice about that. Having said that, were wondering if that was just a false breakout that we saw the last few days, because the fundamentals still dont really matchup. When you get weekly production numbers that actually show were moving back higher, you know the math doesnt make sense. Having said that, you know, its a wild ride. The wild ride continues, and where we go from here is anybodys guess, guys. Indeed. Thanks. Lets talk about all of this in our closing bell exchange. We welcome mark welch, Rick Santelli checking in from cubby land in chicago. Well talk about that a little later, too, rick. So, steve, which is the tail and which is the dog . Oil and equities. Whos following whom . I would assume its been a week since anyone has murmured the name glencore. It allowed a lot of the commodity space to rally in the absence of the major catalyst, which has been china to the downside. So i would say that oil is definitely wagging the market. China comes back online tomorrow. Lets just see what the markets do. China might play catchup. China might be up. This market probably is still a cell. Its a little squeamish. Were at the upper end of that trading range. If you have the luxury of staying long, then you can stay longer time horizon. I dont need to stay long. I can be nimble. I have the luxury of being nimble. Id rather sell these pops. Sell these rallies. I think that dash for trash is probably coming to a close. I forgot that china had been closed a week for that holiday. Thats an important thing to watch. It moved the u. S. Market. When i look at the yeartodate chart, that horrific selloff in august, and now in this last week, weve regained a huge percentage of that decline. So what is it . Do we regain it or is this a false rally . I think the status report accounted for the down move. Its the oil thats wagging the equities tail right now. I think that oil will go higher. The market will like that. Youre going to see that priced into the market. I think its really important over the next few days. Youre one of those longterm investors that has that luxury. Do you want to buy energy here . Do you want to buy these beaten down sectors . Do you see value if youre looking to buy longterm . I think of the biotechs as well. They tried to rally earlier today. I think its the right sector to be in right now. I like the materials, and i like other sectors such as Health Care Technology financials. So yes. Play the bounce. If youre a shortterm tactical investor, do what steve does. You can be nimble and move in and out. If youre longterm, i would recommend to my clients and the audience and our investors out there, take a position in oil right now. I think we can move up from here. Oil stocks or the commodity . Pardon me . Oil stocks or the commodity . Stocks are the commodity. In the commodity and stocks. In the sector. In the sector itself. And theres some good names obviously in the energy sector. Rick santelli, are you thinking about Interest Rates or baseball . You know, im thinking about big jake arrieta trying to go for a 23rd win, thats what im thinking about. But listen, cant be overconfident. We have a great tradition of pulling billy goats out of closets. But when it comes to the markets. When it comes to the markets, i love this conversation. Because we think about china by the way, what free market capitalist society, whatever closed their markets for a week. If theres any doubt, i would think thats what we would consider. Globalization has made some strange bedfellows. If youre an unskilled worker, pretty much anywhere around the globe, your life is not going to be where it was. It makes perfect sense that all these different policies have inflated prices like equity. I get it. But it doesnt mean that we have to see a big construction in equities as normalization occurs, if it ever occurs. Because one of the positives for globalization, and think real estate in the u. S. , is that now you have an entire globe of capital that can move quickly to whatever offers opportunity. And no matter how you slice the negatives of u. S. Society, from a global perspective, our stock market still host significant advantages, even if its a little rich. Have you contemplated weve got more and more people saying get used to a tenyear yield around 2 for a long time . Maybe years. I mean, what are you going to do . What are you going to talk about . Well, listen. What well talk about is all the swings it has. It shouldnt have. Because weve had so many thumbs on the scale that we would need Sherlock Holmes to have a magnifying glass. But having said that, yes, i see the global glide path in a much more diminished slope. I think the treasury market has been absolutely clear the last several years. Before we go, hes made the point that october traditionally is the month of bottoms in the market. Are you looking beyond that for weakness in this market . I think its fair. I think we have that selloff. I think we have that ramp in november and december to year end. Buybacks have been a huge part of this upswing. You have companies that disappear from their buybacks in october. So i can see the market maybe selling off to those recent lows and then rallying back in november and december. Bigger scheme of things, i am looking for a bigger selloff, but doesnt negate what i just said that could happen into year end as well. Understood. Before we go so, rick, we yankee fans have to give it to the astros. Congratulations. They shut the bombers down last night. You guys no offense to pittsburgh, but i think chicago is going to be Americas Team tonight in that wild card game. What do you think . Houston was really hungry last night. That was evident. I thought the yankees looked flat. This young chicago team certainly does make for interesting viewing. Yeah, just dont hit it to the foul line the left side there, into the stands. Ive heard that from a reliable source. Whatever happened to him . Thank you, guys. See you later. 50 minutes left in the trading. Were you with me on that . I pretended to. My husband will explain it later. Volatility reigns again today. So right now, the dow is up 64 points. The s p up nine. The nasdaq up 27, but anything can change here. Coming up next, rob sands going to speak on the takeover battle brewing. Get it . Between anheuserbusch and s. A. D. Miller. Alltime highs on a big earnings beat. What are you going to call that company if it merges . I think the current name is way too long as it is. I agree. Plus, john fort and amazons plan for the cloud. Find out if it is a game changer. If thats whats in the works. Thats coming up. People with really long names. Enough with the hyphens already. Well be back in a moment. You pay your Car Insurance premium like clockwork. Month after month. Year after year. Then one night, you hydroplane into a ditch. Yeah. Surprise. Your Insurance Company tells you to pay up again. Why pay for insurance if you have to pay even more for using it . If you have Liberty Mutual deductible fund™, you could pay no deductible at all. Sign up to immediately lower your deductible by 100. And keep lowering it 100 annually, until its gone. Then continue to earn that 100 every year. Theres no limit to how much you can earn and this savings applies to every vehicle on your policy. Call to learn more. Switch to Liberty Mutual and you could save up to 509. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Some neighbors are Energy Saving superstars. How do you become a superstar . With pg es free Online Home Energy checkup. In just under 5 minutes you can see how you use energy and get quick and easy tips on how to keep your monthly bill down and your Energy Savings up. Dont let your neighbor enjoy all the savings. Take the Free Home Energy checkup. Honey, we need a new refrigerator. Visit pge. Com checkup and get started today. Welcome back. Today has been something of a rally day in that sector. The biotech that we often quote is up one and a half percent today. Look at some of the standouts. Youve got to really White Knuckle that. It is epitomized by the biosector. So far, it is a no go on a budweiser miller merger. Anheuserbusch, they own budweiser. They rejected anheusers bid. Seema modi joins us now. Thats right. They hoped the third time would be the charm, but sab miller turned down the bid. The refusal of the offer opens the door to a week of wrangling before next wednesdays deadline for a formal bid set by the uk takeover panel. They hold a stake of 27 , said it would support a deal at our above inbevs proposed price. Bevco is rejecting the proposal. The combined entity would make a third of the worlds beer. The deadline extension can be granted if sab miller asks for it. Keep in mind, ever since rumors started swirling of a deal coming together in mid september, shares of sab miller have been rising, up some 22 . The deal seems to have gone flat. Theyre giving it the Old College Try several times. Thank you, seema. Elsewhere in the beer and wine world, Constellation Brands hitting a new alltime high. We are joined by rob sands. We want to get to your earnings, but first i have to ask you about this potential mega mergener the area that would create this incredible behemoth in the beer sector. Youd have some major competition coming your way, wouldnt you . Well, in actuality, it probably wouldnt have much of an effect on us because this is really about different parts of the world in north america. The miller corpss part of that business will remain largely independent and become part of another entity. It will continue to run essentially the same way in the u. S. Sab miller playing hard to get . They want more money . Do you think they really dont want to be bought . Your guess is probably as good as mine. Youve been inquisitive. Empowering your earnings the next several months. Are there any areas that would be tantalizing to you if you had to jettison some proposals for a merger of some kind . I dont think so. Because as i said, you know, in our major market for beer, which is really the United States, you know, theres anheuserbusch, and theres miller corps, and those two cant combine for antitrust reasons. So, again, i dont see much there thats interesting to us. How much longer can this juggernaut go for you guys, do you think . Well, first of all, its being fueled by a number of things. Demographics. The growth of the hispanic population is definitely one of the things. The hispanic population is slated and to continue to grow. I would say that the conditions that have driven this kind of growth in our beer business historically are going to remain intact for the foreseeable future. We also have some brands behind those which are fueling our growth right now. We have additional brands like negro modello and pacifico and brands that we havent even introduced yet that we can follow on in terms of continuing to drive the business for the future. We see a pretty steep growth pattern for quite a while for our company. Why are wine and spirits so slow in their growth relative to corona . Whats up with that . Yeah, so thats volume. If you look at the wine and spirits segment, its actually in quite strong growth at the moment. Our spirits business in particular has been growing more like high single digits. And our wine business is accelerating in terms of growth. So, you know, both very strong categories in terms of growth. Are they growing at the same rate as our mexican imported beer business . No. But i would say nothing is growing at that rate. Thats really a phenomenon. You know, with your sales footprint, let me finish by asking you, you know, the imf is out again raising the possibility of a global recession of some kind. What kind of growth do you see around the world where you do sales . Are you seeing a softening in some areas of the world . No. Not in our business. Were primarily a north American Company when it comes to wine, beer, and spirits. I think that the u. S. Economy is fairly strong, relative to the rest of the world. So were sort of one of those fortunate companies that are north american centric. Were not in markets that are going into recession. Now, that said, we do have a Canadian Business, but the Canadian Business of ours is extremely strong at the moment. Even given the canadian economy being somewhat weak at the moment. Its just a lovely chart. Outperformed the rest of the market, thats for sure. Thanks, rob. Weve got about 37 minutes left if the trading session with the dow up 71. We were up 170. We were down 20 or Something Like that. Its been about a 200point swing for the dow today. Coming up, the future of the media influx . New developments at a host of companies from viacom to lionsgate. And jay leno is back in the drivers seat. Watch the season premiere of jay lenos garage. Thats tonight here on cnbc. It airs at 10 00 p. M. Both eastern and pacific time. Very excited about that. Its going to be big, as they say, right here on cnbc. Stay tuned. Welcome back. The owner of fastfood chains like kfc and pizza hut posted disappointing earnings that youve heard about here on closing bell yesterday. Jack dorsey has gotten a vote of confidence from abroad. The saudi billionaire has boosted his stake in twitter to more than 5 . They are now the second largest investor in twitter with a stake worth more than a billion dollars. Amazon aiming high. Amazon is trying to accelerate big business and big governments move to the cloud in a couple of ways that theyre doing that. The first has to do with basically sending aud ining a b business that sucks the data out of the old system. Put it on the truck, send it to the cloud. Heres what amazons chief of cloud told me about it in an interview. Take a listen. If you look at our business, we have over a million active customers who are using aws. Probably the Technology Area thats been slowest to adapt to the cloud, still steep a little bit in the old world is the database space. What that means is theyre paying way too much and theyre being locked into these proprietary old database providers. The biggest . Its rare that i meet an enterprise that isnt looking to flee from thaeir current databae provider. I dont think they will. The second piece of what amazon are trying to do here is around analytics. A new product is going to allow businesses once their data is in amazons cloud to do more with it. To visualize things. To product whats going to happen next. Hey, amazons goal is for all of big business and government to run all of their systems on their cloud. Theyre taking another step in that direction, guys. Back to you. I always thought of it as a warehousing business for information or data or whatever. But you make it sound like theyre trying to suddenly take over the Enterprise Computing space as well . Exactly. Theyre much bigger than where they started out, saying hey, its storage, its a little bit of compute. Now theyre saying hey, we actually have this analytics product, this application that were offering that runs on top of that. Pushing harder into it now. That makes a lot more sense. I was going to say i couldnt understand why they were so hot for this business. The margins were this big and getting smaller. The margins overall, yeah. The margins overall are actually pretty big. For amazon, for sure. People were surprised to see 20 plus operating on this business. You can believe once they start layering applications on top of that, they have the chip. Hes an ambitious type, isnt he . Ive heard. Yes. Time now for a cnbc news update with sue herera. Heres whats happening at this hour. President obama welcoming german president joaquin gout to the white house. The two president s discussing a variety of subjects including the syrian refugee crisis. The coast guard has told family members it is ending its search for 33 missing crew members from a u. S. Cargo ship that sank last week off the coast of the bahamas. The search will end at 7 00 p. M. Tonight. Jeb bush meeting voters in iowa for a second day this week. He heard two forums where he continued to push his executive experience as florida governor. He and the superpack backing him are spending almost 2 million in tv ads this week alone in iowa, new hampshire, and South Carolina. Speaking of which, South Carolina governor Nikki Haley Says while conditions are improving in the midlands area of her state, the flooding is about to get worse. Flood waters are starting to flow towards the atlantic ocean. 409 roads and bridges remain closed in that state. And that is the cnbc news update at this hour. Hopefully theyll be able to clean that up soon. Horrible. Thank you, sue. 29 minutes before the closing bell. Up next, a leading trader will tell us where he thinks the markets will close. Most important last halfhour of the trading day. The toprated analyst covering media stocks is going to tell us what content players could be poised for biggest gains and losses. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. Heading into the final last hour of trading. Tremendous volatility, whether its due to whats going on with oil or whatever, but what do you make of this now . I mean, traders must love this. Certainly its a more exciting time, more opportunity for a trader to sort of show his hawk his wares, if you will. What are we going to see here . Youre right. The last halfhour of the day, the volume has been up. Were seeing volume going into the last trading of the day. A lot of interest down here. The numbers are big. Were still leaning to the buy side. Were about ready to launch earnings. Weve had the last bit of fed news. This is getting to be an exciting time down here. Were enjoying it. The last few times, we havent had as much volatility, but do you think thats going to continue because of that . It seems that way. If you go back to last week. Today overall, the vix, its more like a Beautiful Day in gotham city. I think what weve seen, particularly last week, what i predict will happen going into next week is were going to start to see that. Theres a lot of Short Interest out there, and this is really where the rubber meets the road, when the earnings come around. So everybodys going to be throwing down. Yes, they will. Thats trader talk, by the way. Thank you, see you later. Everybody throwing down, though. Merger speculations, cable bundling, cord cutting. All major headwinds facing the media space today. Joining us now with his take, number one media analyst on Institutional Investors 2015 all America Research team. Are you as negative as a lot of people have been . Its just going to be tougher for some of these big Medium Companies to make money . Well, we downgraded the sector in january on a lot of the themes you just laid out. Weve seen a construction in valuations. But i dont think the pressure is over. I think as you head into the end of this year, into 2016, one thing you have to keep in mind is theres real consolidation on the distribution side. Theres some big deals pending. Some closed like directv and tnt. I think the pressure on Cable Networks in particular, as well as the advertising share loss to some digital platforms is not over. Its going to continue. Thats Pretty Amazing because were going into an election year, where traditionally, you get so much spending. What do you make about the stars potential lionsgate merger . Thats what youre talking about in terms of getting more powerful. While we are cautious of the sector, we think there are pockets of opportunity. Weve been focusing on that small to mid cap space, where we think there could be some consolidation activity. We had upgraded in january and the stock has done incredibly well. We downgraded it in august. Because we felt like a lot of the m a value was already priced into the stock. Still think something could definitely happen there between lionsgate and starz. One of the valuations happens to be around crisis. The canadian tax rate that lions gate benefits from actually creates a lot of value and you can see assets inverted a lot. A lot of name we like a lot thats really benefiting from this year of over the top is dreamworks, which has now turned into one of the largest Tv Production Companies on the kids animated side in the world producing content for netflix. The whole concept of cutting the cord, which seems to be accelerating, you know, with the new generation. Are there is it safe to say its just content providers that are the winners in this regard . That distributes are the ones who are going to have the toughest time for this period . Or is it that easy . The way we look at it, you have some Cable Networks that have generated incredible margins on the back of the cable bundle. I think thats where the pressure is most severe. Wwe seen it in stocks like viacom this year and scripps discovery. Content producers like lions gate and dreamworks will clearly benefit, but i would actually push back on the consensus view that distributors like the Cable Operators are going to feel a lot of pressure. What you see happening is this massive shift to streaming and bandwidth consumption is exploding. That plays into cable strength and a lot of the skinny bundles is being driven by the distributors who are creating new packages of programming that appeal to that younger millennial customer set. So im quite optimistic on the cable stock. Do you have any opinion on viacom, with this drama about what is going on with Sumner Redstone, who could succeed him and what the transaction plan is . And did you ever like the stock . We havent had one in a while, but we have had one in the past. We think kids programming is to some extent the tip of the spear. Its the most competitive area in content. Netflix, we think over half of netflix households globally access the kids content on netflix every single day. So when up that Movement Towards mobile phones and tablets, theres a lot more competition for that dealership. So the Sumner Redstone drama doesnt play into your assessment at all . Youre focused on that fundamental issue . Yeah, i think theres an earnings problem more than something thats going to get fixed with a change in governance. All right. Ben, congratulations on the distinction, the number one media analyst out there. Thanks for joining us today. Thank you. All this lingo now. Cord cutting and cord shaving. I just want to know what time the baseball game is on tonight and tell me what channel. And youre still watching it on tv, right . These kids, they watch on these little screens. Who can stand it . Who wants to watch . 19 minutes before the closing bell. The dow is now higher by 87 points. Just roughly 90 points to get back to the highs of the session. Higher than almost 12 points. Volkswagen and audi are not the only people irate over the emissions scandal. Local dealerships none too pleased either. Some are considering walking away from the brand. That story next. We have a dealer coming up who is very angry about it all. And later on closing bell, a global recession is on the horizon, according to citigroup. We will look at what prompted that call coming up. Stay tuned. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . We are back to a triple digit gain for the Dow Jones Industrial average. Up 100 points on the nose. 1,800 points to get back to the may highs. The second time weve been here. As high as 173 points and then went negative. Its pretty volatile. Heres lululemon shares. They think the stock goes to 69, up from the roughly 53 that its at right now. They expect double digit sales growth over the next several years thats going to help. Especially when it comes to the International Sector for lululemon. More people overseas doing downward dog. Theyre doing more over there. What is that hot yoga . Bikram yoga. I like it. Volkswagen, and the audi emissions scandal will be front and Center Tomorrow when the u. S. Executives from the german auto maker appear before a congressional committee. The owners of vws american dealerships want their own answers. He joins us. Some of the dealers are upset because theyve got a brand take a look at the vaifrability ratings. Favorability ratings. It dropped from 33 in may all the way down to 12. 8 in september. Yes, they had slightly positive sales in september. But that doesnt tell the whole story. Because theyve got a drop, they have boosted incentives. When we caught up with this gentleman, steve caliper who runs a v. W. Dealership, he expressed extreme outrage. In all of the years that ive been in business, all of the frauds that ive seen, this one just takes the cake. Here you have your own manufacturer of products delivering a couple product to the customer, making certain that its defective. Where does that happen in the world . Steve caliper wants answers and hed like to talk to some of the leading executives for v. W. In germany. Not sure thats beginning to happen any time soon. As you take a look at shares, theyre down more than 30 the last month. The bottom line is this. Its not just the people who drive these v. W. Diesel models who are upset. Its the dealers as well. They cant sell many of the models that theyre holding. They would like some answers. Im curious. This guy is obviously very, very angry. He feels betrayed by the german executives. Is he thinking about selling his dealership . Hes been selling for 23 years, did i hear . 23 years. Its not out of the range of possibility, but nobody wants to sell a dealership when its got diminished value. You want to sell at the top. Can you switch . More than that. He wants some answers. Well, hes got other brands. He sells other brands, michelle. The problem is hes got a store dedicated to volkswagen. How do you sell volkswagens right now . You offer more of an incentive, which theyre doing. Hes got a brand that has just been beaten up and hes upset about that. All right, phil, thanks. Great story. Interesting interview. By the way, we have very gd news for carood news for car fans out there today. Cnbc presents the premiere of jay lenos garage, a new Series Starring the tonight show host. He looks at americas love affair with cars. He finds the most interesting car and the interesting people who own those cars, and this is like some of the schtick he used to do on the tonight show. Its hilarious. I love this show because its so authentic to him and what he loves, and what he did in his spare time. If you dont know his passion, he owns like 130 cars, 70 motorcycles and theyre all warehoused in a gorgeous facility in burbank, california. Anyway, he gets to share that passion with jay lenos garage tonight at 10 00 both eastern and pacific time right here on cnbc. Really looking forward to that. The 12 minutes left. The dow is up 71 points now. The volatility continues here. Up next, the feds timing on Interest Rate increases is yesterdays news. According to our next guest, the focus for the market is now on earnings. Sam stovall of s p capital will explain after this break. You wouldnt haul a load without checking your clearance. So why would you invest without checking brokercheck . Check your broker with brokercheck. For my frequent heartburnmorning because you cant beat zero heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. The dow up 83 points. Was up 175 or six. Down 24. Its been all over the map. Joining us, sam stovall, managing director at s p capital iq. Your area of expertise is earnings. And that will give us something to hang our hats on. The fed meetings over and were following oil. Were waiting for something to trade on here. Right. Well, the bad news is that Third Quarter earnings are expected to be off by more than 5 . And the average beat is by four percentage points. Were still going to be under water by 4 . Each successive quarter heading into 2016 will be positive and better than the preceding one with the second half average being above 14 . Do you think thats what that selloff was about earlier in the year, and based on what youre saying, what does that lead you to predict about the rest of the year with the stock market . I think the selloff had more to do with the concerns about the no, china was a big deal at the time. But was it also telling us about the fact that absolutely. You take a look at the potential for an earnings recession. You can either look at it as two successive quarters of negative earnings growth, which is what were forecasting this year, or in a full 12month basis. Were estimating that all of 2015 will be down close to 1 . Weve had 13 of those times since world war ii and it has preceded or accompanied ten recessions. So usually, an earnings recession is accompanying an overall one. Who would be the biggest loser . The best sector is likely to be consumer discretionary. Followed by telecomm and health care. The worst are usual suspect, energy and industrials. You think health care will do . Right now biotech is trading at only 13 times next years earnings, versus 15 times for the s p. Biotech is at a discount. You talk about earnings, whether its old news. Im beginning to think, is it going to matter at all when theres so many predictions that the tenyear yield isnt going to move for a very long time regardless of what they do . That makes it a lot easier, doesnt it . You have to build in your expectations. Exactly. We have never had a bear market whenever inflation has been below 2 , and the yield curve has been two percentage points, which is where we are right now. So even if the fed moves up by a 25 basis points, its like who cares . Sam stovall joining us here. Coming up next, were coming right back with the closing countdown. And then after the bell, well debate which republican tax plan is best for the nation, reforming the existing system, or putting something totally new in place . Thats coming up. Youre watching cnbc, first in business worldwide. Surprise we heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . When youre not confident your companys data is secure, the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Welcome back to closing bell. We have just had the clearest indication that Hillary Clinton, the democratic frontrunner, is feeling the heat from Bernie Sanders. Shes indicated in an interview with pbs that she is inclined to oppose the transpacific partnership, president obamas signature trade deal, signature pivot to asia, which he had just concluded that agreement. Of course, Hillary Clinton was a strong advocate of that agreement as president obamas secretary of state. Its possible to look at this as anything other than a political lens. Shes indicating it doesnt meet the high bar that i have set for protection of workers and the environment. This is something that is vigorously disputed at the white house, but this will, as we enter the democratic debate, the first debate next week in las vegas, give her some ability to push back when Bernie Sanders says Hillary Clinton is too moderate for the democratic electorate. Back to you guys. All right, thank you very much. John harwood there heading to the close, over a minute left here. This is the dow. We compare it to crude oil. They were almost in lock step today. A rally on the open crude oil. Fell on the inventory data. Took the equity market with it. A comeback rally. And a selloff, especially for crude oil. The dow holding on to a fractional gain. Very quickly on the bio you know, well leave the biotechs for another time. Talk about this volatility. We talked about the fact that Health Care Stocks led the way higher. The hardest hit, to your point here. This idea that even with the volatility, there doesnt seem to be a lot of order flow, a lot of volume that goes along with it, which indicates that many people who manage money are not wholesale changing strategies just yet. Of course, we know there are overhangs. China, the fed, etc. , etc. Well see what happens. Well see you in a little bit. Well talk about the ipo market, which has definitely cooled off here. And who in the Republican Party has the best tax plan. Thats coming up on the second hour of the closing bell. Welcome to the closing bell. Heres how were finishing the day on wall street. Dow jones industrial average finishing higher by 121 points. The high had been a gain of 173 points. So back to triple digits four days in a row for the Dow Jones Industrial average. A long time since weve seen that. The nasdaq higher by 43 points. Joining us on todays panel, we have cnbc contributor carol roth. Also with us for more is dan nathan. Let me start with you. Four days in a row, we havent done that since july 14th. The big selloff that we saw, is it over . Are we finally regaining traction here . Is this just a false rally . Its typical of a bear market rally. I think youre going to see these really sharp countertrend rallies. I think a lot of the factors that made it possible over the last few years are really no longer in place here. I look at this 5 rally from fridays lows for absolutely no reason other than the fact that i think that lot of investors got caught offside. Now youre seeing this kind of bounceback towards the trend. So i think chinas markets are going to reopen tomorrow here. I think theres no indication that theres been any increase in demand that suggest crude should have moved up the way that it did. I think investors should be losing this recent strength to kind of lessen their equity exposure. You agree . I do agree. As we head into earnings season, i would expect very much of a mixed bag. There would be some companies that do well. There would be many that disappoint and probably many more that give Forward Guidance that is very disappointing. I think were going to continue to see this volatility, and probably be within some sort of a range here, where were keep hitting these lows and bouncing back. I dont see where this rally has the steam. I dont see any good news thats going to continue to push it. Weve been given Corporate America has been given tremendous number of excuses to use, right . In earnings season. With the slowdown in china. The emerging market problems. Currency. I mean, you name it. They had the excuse. They lowered the bar. I think thats probably our only good news, that the bar is so far lowered that there will be some. More of the investors are going to be in tune to what is that Forward Guidance. Especially as we go into the Fourth Quarter with retail sales and the consumer. Were already starting to hear that theres some expectations that there may be a light Holiday Season here. Maybe its as simple as weve got four days of very strong moves here, right . The jobs report stunk, right . Are we back to the feds on hold . What else do you do but buy the stock market . We really thought that we would be ready for a liftoff, six years in, and it just doesnt appear that thats the likelihood. The notion that the u. S. Economy was going to be coupled from that of europe or emerging markets is kind of proving itself out that thats just an impossibility, when you think about the august and the september jobs data. Weve seen u. S. Multinationals slashing a lot of jobs. You should be happy with the returns youve gotten. You have one down year in the s p 500 since 2002. I think a lot of the conditions that made this bull market possible over the last five or six years no longer exist, and the reasons why investors were tripping over themselves to buy stocks in the u. S. This week are really kind of silly. And i just think enough is enough. Be that as it may, there are the outliers. What about a company like go pro which was downgraded today, which is hitting an alltime low . What about a yum brands . Bill, let me tell you it presents opportunities right now. Get started yum brands, this is a company that has tremendous issues as far as credibility with their management. You know, when they reported back in february, they guided to a second half a massive recovery. They committed to double digit eps growth, because chinese comps are going to come back. These guys do not have visibility in china. This chinese consumer, the middle Class Consumer may not be as strong as tim cook seems to think. As my friend guy adami likes to say on fast money, maybe it is that middle Class Consumer in china that is aspirational. Maybe theyre spending a disproportionate amount of their income on iphones or nike sneakers. But they may not be for gross kentucky fried chicken. I agree with that. Not just the middle market consumer in china, but also the higher end Luxury Consumer in china. You have to remember they had that corruption crackdown as well. So i think that whether youre the high end or the middle end in china, that we are not decoupled from them. Yum brands is a perfect example. What are you thinking on Interest Rates here . Ive been saying we are going to raise Interest Rates this year forever. Ive probably been one of the people pounding the table. I just dont think from a risk rewards standpoint that the fed is going to be able to make that trade in a way that makes sense. So i dont see this happening any time until maybe march of 2016. Maybe later. Yes. Art cashen agreed with you this whole time. We asked art, how did you know they werent going to raise rates . He said practice, practice, practice. There are new red flags being raised about the ipo market right now. Dom is back with that. The reason were so concerned about ipos today is because pure storage came to market today, and its been the first real big tech ipo that weve seen since the turmoil during the summer. Remember august 25th lows. We havent seen a real big tech ipo until today. Pure storage does Enterprise Cloud storage solutions. Think of it like box. And this particular company came public with an expected range of 16 to 18 a share. They priced it at 17. It opened about a quarter below that. And then finished the day you can see just right now. 16. 01. It finished the day about a dollar below where it priced its ipo. The reason why so many people are looking at this right now is because youre looking to see what kind of appetite there is for more ipos given the volatility that weve seen. They went public. Another one that didnt, mobile telecomm services. They had originally slated to go public and they pulled their ipo yesterday. So on the one hand, pure storage, the biggest tech related ipo so far this year, renaissance capital. It does go public. Just more data points about whether or not this ipo market is healthy. Thats the reason why so many folks are scrutinizing this particular deal today, guys. As a former investment banker, i actually view this as good news. I like when the ipo market is rational. And actually has some scrutiny behind the companies that it is allowing to go public and pricing within the range and not way above the range. I think thats a good thing. I think weve seen far too Many Companies that probably shouldnt have gone public or went public too early. Twitter, a zinga, that shouldnt have gone public when they did. I like the fact that theres a little bit of a pullback. I think that it will put the pressure on the vcs to make sure that when their valuations go up, that theres something behind it other than just their money. Does this play on your bear call as well . Yeah, it speaks to risk aversion here. You dont really want to be the last one holding the bag of the worst deals. Im sure that a lot of these deals were trying to get out much sooner when the s p was acting much better in the first half of the year. So at this point, i just think that the ipos that were going to see, theres really nothing thats particularly exciting. And you mentioned go pro. Heres a company that had a tremendous amount of buzz. There was a bull market darling of this latest stage here. Its a oneproduct company. Im sure they do a lot of things well. This things probably got a date with its ipo price of 24. Its had a precipitous drop the last couple months. I think investors are starting to get their arms around the fact that maybe theres some seasonality to it. But the idea that one big competitor could come in and take a chunk of market share very quickly doesnt make this offering that exciting. So to me, i think it speaks to risk aversion. I dont think theres too many deals slated right now that you want to be buying into this market. Maybe your phone will just be good enough eventually at some point. Mount it on something. I know everybody thinks its an absolute tragedy when an ipo doesnt pop. I understand that its a negative signal for the market and everybodys worried about their strategy in silicon valley, blah blah blah. But at the same time, i think its great that that company was able to extract every dollar they could from the Public Markets instead of leaving it on the table. When that stock pops, ten or 20 bucks on the ipo, its money that the company didnt extract from the Public Markets that they could have used for themselves. Thats my counter. Let me put it this way. Its not that were trying to sound negative or positive. The previous comments i made were more on the cautionary side. A lot of folks are saying the same thing. You have an ipo, a higher profile one, priced at the midpoint reasonably, the bankers probably priced it pretty well given the fact that the stock is down about 5 from its offering price. The big deal here is that the market didnt really sell this thing off. Nor did it pop. The market is in essence, at least for right now, saying that this company, this pure storage, this cloudbased Storage Company for businesses is priced at least somewhat correctly for the given moment. The reason why thats important is because if you do have other companies coming to market, whether or not those companies can come public and what kinds of parameters, what kinds of pricing that youll need to get those things, the deals done at levels that you think the market will absorb. And in this case here, a lot of people may say oh, my goodness, its not a dollar from its offering price. This is not exactly a bad thing for the company. It just means the ipo was priced at least relatively well given where the market is. From a former bankers perspective, 10 to 20 pop is the ideal. No, i get it. Youre still getting that aftermarket excitement. Dont forget, theres still m a. M a is strong. We may see a lot of these Companies Come public as part of another company and nothing else to do it. Theres that potential beer merger that could be worth over 100 billion, as a matter of fact. Dom, thanks. Dan nathan, thanks, buddy. Well see you later on fast money. Be sure to catch dan and the rest of the crew at 5 00 p. M. Eastern time. Bonds have not budged, so is the bond market sending the stock market a warning . Blackrocks Jeff Rosenberg will weigh in with a bold call, we are told. Thats coming up at the top of the next hour. Meantime, one of wall streets top firms is predicting a global recession next year. We have details on that still ahead. Gopros shares hitting an alltime low, but is this an opportunity to buy . Well hear from a shareholder next. Youre watching cnbc. We are first in business worldwide. Hello, watson. You can see now . I can recognize people, analyze images and watch movies. Well i wrote a few books, did a speaking tour, i. Ive been helping people plan for retirement. And i help doctors identify cancer treatments. Is that all . I recently learned japanese. Yeah, i was being sarcastic. I havent learned sarcasm yet. I can help with that. He can not see through doors. His speed, anything but superhuman. But when it comes to health care options, george found helpful information and resources at aarphealth. Com this makes him feel unstoppable. Well, almost unstoppable. Discover real possibilities at aarphealth. Com today and tomorrow take on the world. Im a gas service rep for pg e in san jose. As a gas service rep we are basically the ambassador of the company. We make the most contact with the customers on a daily basis. I work handinhand with crews to make sure our gas pipes are safe. My wife and i are both from san jose. My kids and their friends live in this community. Every time i go to a customers house, their children could be friends with my children so its important to me. One of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. Together, were building a better california. We have some breaking news on Deutsche Bank. Mary thompson has been tracking this one. She tells us about big numbers. Very big numbers. The company saying it is expecting to take over 8 billion in charges in the Third Quarter. The charges will cover Capital Requirements the Company Needs to meet, in addition some litigation provisions and others. As a result, the company is going to be reporting a loss somewhere near 7 billion for the Third Quarter. Havent heard back to get any more details, but Deutsche Bank taking over a billion dollars in charges in the Third Quarter. Something that is expected to result in a Third Quarter los of nearly 7 billion. Back to you, bill. They had a big shakeup in the ceo office. Is this why we saw those guys have to go in the first place . I know its hard to tell at this point. Its difficult to tell, but i think what you will see with the Capital Requirements or something, this isnt a surprise. A number of people were saying a lot of the european banks are short. They are the litigation reserves as well. The company has been in the midst of a number of different regulatory probes both here and abroad. Deutsche bank basically is involved with it, or named at one of it. The fact that they have to cut their dividend in light of this, i would say its a number of Different Things and whether or not the two coceos knew this before they left, well probably be hearing about that in the coming days. And the stock is down 7 in the afterhours on that news. Meantime, go pro shares also taking a big, big dive today on the heels of negative reviews for its new product line. And a bearish analyst note, which cut the price target from 62 to 35. The question is, can go pros cameras capture the former cool surrounding that brand . Daniel, let me start with you. The concern here was they didnt like the new camera. They think that people are going to use their apple phones pretty soon. Whats your assessment of this report from Morgan Stanley . Have they got it right or wrong . I think theres been a perceived risk that apple is going after this market. I do think the bark is worse than the bite. We view it as a 20 billion Market Opportunity. I do believe as we go down the next year or two, apple does get more involved in action cameras, and potentially we could be viewing go pro as an acquisition candidate, or potentially microsoft, as cameras will become central to the key component of the next smart phone revolution. Lets face it, this stock has suffered mightily, and you have to admit, it has lost its cool factor in the meantime. Why isnt it cool anymore . The venice kids think go pro is the coolest thing ever. I dont think thats the issue. What the other guest said i think is really the bull case, that cameras are the world that these kids live in now. Its picture, picture, picture. And go pro has great, very, very durable cameras. Im not putting my 850 tlr iphone on my surfboard and using it to shoot stuff. Go pro has a unique position in the market. They should be bought by apple. Apple should take this opportunity and dive in. Theyll get 2 billion in revenue for 4 billion. We have a small position in go pro as a risky investment for many investors, but if youre thinking longterm, i think this is finally the entry point weve been waiting for. We have a very small position and we might add to it. I was going to say, you might add to it . Is it low enough . Hopefully, thats like 20 to 25 bucks. If i can get down there, ill make money in a lot of potential cases, you know . Around 25 times, what do you think the appropriate multiple is for a business like this . I think that is the appropriate multiple. At my firm, we look at the ratio which is the p. E. To growth rate and we want a one or lower on that ratio. Youre saying theres a 20 billion Market Opportunity over the next five years. How much do you think go pro is going to get of that . I think the golden opportunity is around augmen reality. I think its a bit of a jump ball, depending on which direction, how aggressive names like apple and microsoft go in this space. This area has grown 30 , 40 . One trick ponies are being thrown out, baby with the bath water. I think yooull see investors revisiting some of these areas. It represents really the next frontier of the smart phone market. Does anybody think that the low price now if it continues lower, makes them vulnerable to a takeover of some kind . Absolutely. Thats the opportunity for apple, because they couldnt make these cameras themselves and sell them and try to market them. If i can get the go pro brand and if i can get the coolest like the beats brand and i can leverage the brand with the revenue and the growth they already have and no debt, it makes a lot more sense to spend the 4 billion and buy go pro at these prices. Its only four billion at this point. Apple could buy it 100 times over. You could buy a crappy startup for 4 billion thats never going to make money or you could buy go pro. Its a question of whether they think they need that brand. Apples brand is so strong. And given their technology, if they want to come out with a technology of something that competes, im not sure they actually need to pay a premium to have go pro on the top of that. And that may be true. Pro on that. And that may be true. Apple is not as cool of a company as it used to be and thats why they beat beats and are using the beats brand, and gopro is a Cooler Company for young people, and theres a value there. All right. Weve got to go at this point, guys. Clearly the definition of cool has drifted. 29 a share for cool. Thanks, ross and daniel. My pleasure. Good to see you guys. Is the Global Economy on the brink of another recession . One wall street firm thinks the answer is yes. Later, were going to debate. This ought to be fun. Im sitting here with two very conservative ladies. Were going to talk about which republican tax plan is the best for the nation, reforming the existing system or putting something completely different in place . We get to that. And dont forget, you can see all the candidates make their case on the economy on october 28th. I need glasses, bill. October 28th, it says, right here on cnbc. Dont miss it. 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. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. 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Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. For the second time in a month, citi issued a warning of a global recession coming in 2016. Jeff cox has written about this dire pronouncement for cnbc. Com and he joins us now with the details. How bad do they think its going to be . Thanks, michelle. Its a little dicey now, but we know that the u. S. Economy is slowing. We know the Global Economy is slowing. Citi thinks that next year, 2016, we could very well see a global recession. I think that the projections now are for that to be fairly shallow. But i was also intrigued by a note from charles schwab. Their top strategist saying she doesnt think theres a great chance for u. S. Recession, but she holds open the possibility, believes investors should do the same, and she has cut her equity waiting down to neutral, which is very unusual for such a bullish analyst and a bullish firm. Now, heres a point that i also want to make about this. We cant make this point enough. As far as the market goes, a recession is not necessarily bad for stocks. And the 12 recessions since the end of world war ii, stocks have been up half the time, down half the time. Six months out of the recession, weve had an up market. And everyone except for one and 12 months. This recession talk, it can get kind of scary. But unless it gets to be a really deeper obsession, i think the market can probably withstand it. Explain something to me. A global recession could mean parts of the world are negative, but the United States could still be positive. It can break down a number of different ways. Thats correct. The goal posts are a little bit different when you talk about a global recession, michelle. Basically the barometer for global recession, anything below 3 growth is generally considered a global recession. U. S. Growth is not tracking very well. The Third Quarter, according to the atlanta fed, were down to about 1. 1 . I know the cnbc tracker is somewhat higher than that. But we know things are getting slow. Theres also this other wild card that we have as well of this earnings recession that a lot of folks have talked about. The fact that i was on closing bell a few months ago and brought that up. We see strained conditions as far as Corporate America goes. We see those manufacturing indexes. Of course, manufacturing is only about 12 of the u. S. Economy. But they are all indicating as well that were in a contract n contractionary period. Youre starting to see fear start to build up on wall street. I guess my biggest question is were in sort of an unprecedented time period here. You were saying its not always bad news, but usually in those time periods, you dont have the situation that we have with Massive Central Bank intervention all across the world. Zero Interest Rates. We may end up with zero Interest Rates forever here in the United States, if that really is the case. It makes the very important point that the fed is going to be hiking into a possible recessionary environment. If were not in an outright profit recession, were at least going to be in a profit flat line. All the other times when the fed hiked rates and the market went up, they were hiking them into rising corporate earnings. All right, jeff. Thank you. Let us know the next time citi comes up with another global recession. All right, time now for a cnbc news update with sue herera. Hi, michelle. Thanks. Heres whats happening at this hour. Defense secretary Ashton Carter says the u. S. Military will not cooperate with russia in syria. Because russias strategy is tragically flawed. He made the comments at a joint News Conference in rome with the italian defense minister as he continues his european trip. Irans ayatollah has banned any further negotiations with the United States. His statements directly contradict those of moderate president rouhani, who was hoping to end irans isolation after the country reached a nuclear deal in july. Californias governor jerry brown signing into law a bill requiring the state to produce half of its electricity from renewable sources by 2030. Language to cut Petroleum Use by 50 was cut from that bill. Pen Penny Pritzker became the second u. S. Cabinet official to visit cuba since the establishment in july. Back to you guys. When kerry went there, that was the diplomatic arm. Now this is economic. See you later, sue. Thank you. Republican voters have two choices when it comes to the candidates tax plans. Reform the current tax system, the rates that we have now. Or, sweep it all up and start a whole new system. National sales tax. Or flat tax. Right. So were going to debate the merits of both of those, next. Also, later, the top Airline Analyst on wall street tells us which carriers he likes. More closing bell coming your way. But for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. We have a market flash on lumber liquidators. Seema modi, whats the latest . Lumber liquidators has reached a settlement over an investigation that began in 2013 over an environmental law, the lacy act, related to suppliers cutting down more trees than they were permitted. This does not seem to be related to questions about the level of formaldehyde on their products, but they are moving higher. I wonder if thats meaningful or if people were confused . It was a settlement, right . Big move. Thanks, seema. The race for the white house is heating up, and so is tv ad spending by the eamon javers breaks down the numbers. They are starting to pour on the gas when it comes to ad spending. Take a look at the top list here of which president ial candidates have spent the most. Notice, youre not going to see any democrats at all in the top three. The top three are jeb bush at 7. 3 million. Kasich at 5. 4 million. Rubio at 4. 7 million. Then comes your first democrat on this list, Hillary Clinton, who has spent 4. 6 million. Bobby jindal, 2. 3 million. Interesting that that doesnt line up exactly with where the poll numbers stand. Also interesting is the guy that you dont see on that list of ad spenders, which is donald trump. He told the Washington Post in an interview this morning that he hasnt spent any money on tv ads at all because he doesnt have to. He said his original budget was 20 million through september, but he has spent nothing so far. He is preparing now his first tv ads with an ad firm that is entirely new to politics. He said he will likely spend over 20 million on paid media later this year. But so far, guys, he said that Cable News Networks have been all trump all the time. He just doesnt have to spend money on advertising. And if he did, he might annoy the viewers because its trump during the programming and it would be trump during the commercials. He says he doesnt want to have that kind of overexposure, guys. Thank you, eamon. Ive got nothing for you on that. See you later, eamon javers. Gop voters face two clear choices when it comes to fax reform that is being mentioned by the candidates. John harwood has details for us on that. Texas is as hot as any issue gets in the Republican Party. Its both a policy debate and a political tool. If youre a candidate trying to seize the attention of republican primary voters, your inclination is to go and propose to completely rip up the code and start with something new, which is precisely what some of the outsider long shot candidates are doing. Instead of a tax code that crushes innovation, that imposes burdens on families struggling to make ends meet, imagine a simple flat tax. That lets every american fill out his or her taxes on a postcard. Imagine abolishing the irs. All special tax breaks will be gone, in exchange for one low flat rate of 14. 5 that every single business will pay. If youre one of the establishment frontrunner candidates, youre more inclined to propose an incremental reform to the system because thats easier to achieve. Some of those have their own political problems as well because people like marco rubio are proposing to eliminate the estate tax. Also the tax on Capital Gains and dividends. You cant eliminate Capital Gains and dividends. Its a political loser. I think that anything you tax, youre going to get less of. Thats why we tax cigarettes. It provides tax relief for the middle class. Everybody freaks out about the deficit. I worry about the deficit, the structural deficit for sure. If we grow our economy at a faster rate, the dynamic nature of the tax policy will kick in. Its not for the rich, although the rich will benefit especially if the economy takes off. They might be better off. Including me. Certain things make it too easy for people. If my plan takes off, great. Even though were getting rid of carried interest. You know it and everybody else knows it. Its timely. But its psychologically very important. So what happens is this. My plan is best for the middle income, for the middle class. Now, we just had a new tax reform proposal ruled out today. Bobby jindal, the governor of louisiana is proposing to go in the opposite direction from trump and bush and not take middle class families off the rolls. He says everyone should have skin in the game. His plan has a toprated 25 and all the republican plans are going to face criticism from democrats that theyre too tilted toward upper income americans, guys. Yeah, always. Thats typically what they say. So we have candidates rubio, trump, bush in favor of cutting rates versus candidates paul and huckabee advocating the flat tax. So which plan is best for the United States . Joining us now, Chris Edwards from the Kato Institute who agrees with the rubio, trump, bush plans. And wayne, who prefers the huckabee plans. It seems so much more difficult to tear up that whole thing. How will you get that done in this congress . I think you really have to look at what the voters are looking at. The activists i talk to, theyre all sick of the current tax code. So i think what we need to do is fundamental tax reform. Rand paul has a great plan to do it. Its time to get rid of the tax code and start all over again. I mean, right now, its two burdensome. Were 7. 6 billion hours a year just to comply with the tax code, so its time for reform. Do you like a flat tax and you just dont think it can be done, or do you think its better to have the plans that are being put forth from rubio, trump, and bush . No, im absolutely for a flat tax. And i think all those plans are a big step toward a flat tax. I think the big picture here is that all the republican candidates have very much pro growth, supply side plans, which is remarkable. The thing we have to remember is that one of these guys or gals wins in 2016, it will be paul ryan who really writes a big tax reform plan. Hes as gungho as all these republican candidates. The general direction of reform here is lower rates. So thats the big picture here. The differences between the plans, i dont think theyre that important. They all have Large Business tax cuts, which i think is the single biggest thing we can do for the u. S. Economy in coming years. I guess my challenge with all this, certainly im very pro tax reform. I dont know that the rates matter so much. The complexity in the tax code is defining what is income. Also all of these deductions that people are used to getting. So regardless of the plan that youre on, isnt the crux of the issue the complexity and the actual definitions, versus when you go flat or have some sort of graduated structure . No, i dont actually agree with that. A basic piece of tax economics is that the marginal rate creates the distortion. The higher the marginal rate, for example, the more the distortion from them. Lower rates is the number one goal. You may remember the tax act that was bipartisan, lowered the rates to a simple 15 and 28 . Thats the direction i think we ought to be going here. And we should have bipartisan reform. Lower the rates. Get rid of some of the unneeded deductions and credits. Make it more efficient. Simplification comes with that automatically. How do you get any of this past congress . Theyre going to need a veto to get this through. But youve got the flat tax being talked about. Huckabee talked about a National Sales tax. This is a big stretch to try and get past a Dysfunctional Congress at best, dont you agree . I agree. Its a heavy lift. This is a thing that takes outside the beltway pressure to make things change. Just fiddling with the margins, its being driven by the lobbyists and the tax industry here inside the beltway. Its going to be a heavy lift, but i think with grass roots pressure, and with the right candidates pushing the right reforms, were going to see an opportunity to just get rid of the tax code and go to a flat takes or a fair tax. I would love a flat tax, but i think its going to be incredibly difficult. Tough sell. You would need an incredibly charismatic leader that wanted an incredible mandate like Ronald Reagan did the Second Time Around in order to i think really achieve that. Chris edwards, thank you. Wayne brown from freedom works, thank you for joining us as well. Be sure to catch the next Republican Debate on cnbc. Your money, your vote. The candidates will debate their economic plans right here on the network, october 28th. Coverage starts at 5 00 p. M. In the afternoon. Yes, maam. Looking forward to that very much. Airline stocks getting hit hard this year, as you know. Up next, wall streets top Airline Analyst will join us with his take on that sector. Is he buying anything . Well find out, coming up. And jay leno is back. Hes on cnbc with a new series premiering tonight. Mr. Wonderful himself, kevin oleary, reveals the story behind his first car. Hey, my name is kevin oleary, aka mr. Wonderful from shark tank. None of that matters because i want to talk about my first ride. It was a 1973 red 2002 bmw. I think i paid 1,600 for it and started fixing it up. I loved that car. Find me another one, ill buy it from you. Jay lenos garage, Series Premiere tonight at 10 00, only on cnbc. Jake reese, day to feel alive jake reese, day to feel alive investors out with its allAmerica Research team, the best of the best in equity research, making the cut again in the airline sector. A senior Airline Analyst from jp morgan jamie baker. Hes been ranked number one for the past six years. Way to go, jamie. Good to have you here. Im confused. Oil prices are down. Airline stocks are down. Its supposed to be just the opposite. Whats happened . Airline stocks stream about the matters like free cash flow. Year to date, investors have been two focused on one thing, the top line, which ill admit is fairly uninspiring right now. If we can get people to focus more on the output, rather than that ingle line item this the income statement, stocks will regain the traction they had in 13 and 14. I have a question. The Consumer Experience as an Airline Passenger has been in a downward trend for a very long time. Obviously exacerbated by the mergers and the lack of choice. How can the Airline Companies reconcile trying to improve that Customer Experience and still making investors happy by growing their bottom line . Well, look. The last time you flew, you probably checked in for your flight using an app. You probably might have even boarded using that app. Onboa onboard, you most likely had a refurbished cabin, large enough overhead bin. On time statistics can leave something to be desired. But most of the u. S. Fleet is wifi equipped. Its a little difficult for me to reconcile all of the consumer pru pushback. Theres no uproar about popcorn not being included in the price of a movie ticket, or costing more than the margarita pizza. Consumers simply need to adapt to that new reality. Im going to have to significantly disagree on that one. The entire experience from front to back is absolutely abysmal. I dont know anybody who flies more frequently than carol roth. I hear about this often. Let me ask you, because were short on time. Are you buying anything . Do you like any of these airlines right now . Absolutely. We would focus on the big three. American and united. Particularly american given the i. T. Integration. Stocks are going to open well and be strong on the morning of the 19th and beyond. We also added southwest recently. I think thats probably one of the lower risk ideas that is onr risk and i can envision a rally back to the mid to high 40s. Thank you, jamie. Number one for Institutional Investor again this year. Free tickets to see bob were at Madison Square garden. Sound like any grateful dead fans dream it. Could come true. Because members of the band are teaming up with the Robin Hood Foundation to give away 10,000 tickets for charity. Were going to hear from the legendary guitarist next. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . The grateful dead is teaming up with other rock artists to benefit the Robin Hood Foundation. The largest poverty finding organization in new york. The deadhead himself steve lees man joins us with details. The dead, that iconic band of the 60s is going cooperate for a good cause. Three former members of the dead have teamed up with john mayer and they call themselves dead and company. They have announced a free show on november 7th, sponsored by American Express for robin hood. And i asked them about teaming one a big company like am ex. There are now enough people high up enough in American Express who get what were up to and want to try to spread that around a little bit. And they have the ability to do that. It is not like weve drawn the line and said no corporate sponsorship or anything like that. But nobody has come to us with Something Like this, with good ideas like this in the past. And like i say, this is the system working at its best. That is mickey hart behind him. And they donate to robin hood and direct efforts to poverty in new york and fans online will be urged to donate as well. I talked to john mayer and asked how he ended up playing with the dead. This is the most immersive and incredible musical experience ive been part tv. It is a great opportunity to step out of that really sort of monological solo artist thing which i wasnt getting board of it and i was running out of new colors of paint to use sonically and ideawise and so i get so much more out of it on a Community Level on a group sort of creative level than i give up, which is very small. Because it is a real nebulous democracy that takes place. It is more like collective anarchy. Than nebulous democracy. I think mine is more p. C. And we learned they werent anticorporate but it took 50 years for a company to come to them with the right deal. And it took the higher ups and mesh express to get it done. Maybe there is deadheads in there. Thank you with the guys from dead and company. Thanks steve. And we learned while that was happening. That monological is a word. John mayer knows what hes talking about. All right. It is back. Earnings season. It may feel like it never ended but alcoa reports tomorrow that kicked off the earnings parade. And well get to what to watch for for that coming up next. Stay tuned. So alcoa reports earnings tomorrow. Unofficially kicking off the season. Were watching this because materials and it is such a key part of the world that were watching. And that stock has suffered mightily this year. It is an interesting story. Because they are splitting the company into two. The good and the bad. And im not sure the Earnings Report will give you insight into what will happen. That is a story youll have to be looking out a few quarters for. So even though it officially kicks off tomorrow im not sure youll get that information. But ill be watching tonight the cubs and the blackhawks. And going into the wildcard. You are not going to watch the cubs . You will watch the blackhawks . Even though im not a cub supporter, im a chicago supporter and i feel like the town deserves it. I agree. My goodness, is it time. It is well, well deserved. A major market. We love pittsburgh and the pirates. But we love chicago more. And jay leno tonight, jay lenos garage you are going to switch to that. Im a multi tasker. And she gets on an airline right now. Good luck with that. That is it for closing bell. Thank you for joining us. Fast money is up next. Melissa. See you tomorrow. Thanks guys. Fast money does start right now. Live from the Nasdaq Market overlooking time square. Im melissa lee. Pete, karen, and dan here tonight. Go proat an alltime low and shark tanks mr. Wonderful has choice words on the massive selloff. Find out what he said that has investors running scared. And a gamechanger for the markets today. And later amazon versus oracle did they make a major move into the cloud. The details on what amazon is billing as the Fastest Growing business and why