That and more for this halloween, october 31st. Good evening everybody and happy halloween. Its the final trading day of october, a month that historically has not been a very good one for stocks but this year october doesnt look so scary after all. Todays stocks move in a very narrow range for most of the session but traders did get spooked and sold off. In the end the dow was down 73 and nasdaq off nearly 11 and s p fell six but for the month, a good one for the bulls. The dow up about 3 , the nasdaq up four and s p 500 up better than 4. 5 or there abilities and with the month of october coming to a close, the nights are cold, days are shorters and investors are apparently afraid of very little for now. Reporter one by one, the ghouls that might have ruined october for investors were sent packing. Ben bernanke didnt as some expected, the government closed and reopened and everybody got paid. Earnings a mixed bag with enough treats to balance out the tricks and the economy is okay. The economy is still growing at roughly 2 . So i think its fairly resilient. We would have actually been growing faster. Reporter all and all a pretty good recipe for stocks in a month thats turned its reputation for being unfriendly to equity investors. There was october 1929 of course, the market fell more than 20 ushering in the great depression. There was 1987. The dow crashed 23 in a day and in 2008, the dow was down 28 for the month despite the index biggest oneday gain ever, more than 936 points on october 13th. This year, of course, its different. Record highs for the dow up 3 . The s p 500 up almost 5 . The russell 2,000 nearly 3 higher and nasdaq with a gain of 4 this month is higher than its been in 13 years. Investment trick or treat. Try not to think about the levels because it scars you. Im getting more nervous. Im fighting the greedy monos. Reporter so what happens from here . That naturally is anybodys guess really. Season nalty is on your side typically the markets go higher in november and december. Then again with the s p 500 already up 23 or more this year, maybe there is a reason to be scared of hikes. And those lofty levels have some wall street pros scared of bubbles, market bubbles when investors drive up stock prices way above the true value. Remember the. Com bubble . Is it just talk . Is what big name investors are saying. I think the markets are bubbling and all asset prices are bubbling, stock prices, bond prices. At this time the stock market is somewhat bublly. It has a high cape but we can find low cape sectors in the market. There is that disconnect and sense of bubble brewing, right, although, today look at the market. Were flat and up margely, right . Who is right and what should you do with your money . Lets get the thoughts of two fund managers, one is a bear and one is a bull. The bear, mr. Lowry will make his case to tyler and ill question the bear. Gentlemen, thank you so much for joining us. Let me begin with you, so much optimism in the markets right now. Are we at risk of a bubble . Why are you so bearish . Im bearish because i think prices are way ahead of themselves. I think they are inflated because the safety net that bernanke and the fed pitched under us for a number of years right now. This too shall pass. Were at a point in the market where the market wants to hear bad news because the fed will hang around longer. I think thats the opposite way to look at things. The market is not pricing in. Any chance of bad news and i think that there is a lot more room to the downside than to the upside. Vince, answer, if you might, and specifically address why stocks have been rising so much when the economy and earnings arent rising nearly as quickly. Sure, so the only bubble out there is in the bond market today. Stock market is nowhere near a bubble. Right now you can buy the s p 500 at 1. 60 roughly for every dollar in revenue. To put that into prospective, the bubble of 1999 you were paying about 2. 49 to buy the s p 500. That was a bubble. This is nowhere near a bubble. Longterm history is about 1. 50 when you include per yisd of the 70s with inflation and noninflation 1. 25. When Interest Rates were at 6 that was considerable. The most important thing studied over 100 years is when you have a positive sloping yield and shortterm rates, 250 basis points below the tenure, thats extraordinary bullish for stocks, although revenues are growing slow. Weve detectedin the last couple quarters that they moved from going on average of the last two years by 1. 8 to 2. 8 and when you consider that for the last five years in the structure bull market and they have been cutting costs, if those revenues rise up to the normal of 5 to 7 in recovery, its to do it for the stock market. If youre sitting on the sidelines listening to bears, youll lose out. Vince, lets back to uri and get your response to what vince is saying. His indicators are showing things are bullish. A lot of cash on the sidelines. Where will that cash go, probably the stock market, right, uri . I dont think so. If the lead point in your argument is this is a bubble and we should buy stocks, thats a fairly weak argument. I dont know the country vince is in, but the one im in is a vast majority of america doing very poorly. What we have is an economy giving the illusion of being okay but when you look at it its not and 90 of americans are living below means and having less disposal income than they used to. This is a longterm very gray drag on the economy, and i dont see strength from, you know, the upper 10 and from the enterprise dragging up the bottom. So, i think this is a market thats ignoring a lot of warning signs out there and will react accordingly when people get a little more sober. Vince, quickly i dont [ overlapping speakers ] warning signs are out there, i dont know what warning signs are out there but there is no statistical bout to call for a bubble in the stock market. It just not there. Were used to the previous ten years growing our revenues and s p 500 as a measurement 6 to 7 . Were down to that. We got people worried to death. Dont be worried. There is good things in place. All we need is growth. Maybe some of these people, washington, start growth oriented use of the world and do provide some more growth oriented economic behavior down there and im telling you thats all you need for a very big bold market. Good discussion. That i think will go for another three years. There is a bull call. Uri sees it the other way. That the what the market is made of, people with different opinions. Thank you for being with us tonight. While the u. S. Dollar gained strength and stocks floated downward, gold prices tumbled more than 20 an ounce. Sharon epperson is looking into that spooky move. Reporter gold prices extended the decline after the Federal Reserve met after they parched through every wort of the statement. They are trying to figure when the Federal Reserve will taper back the program and watching Technical Levels for gold. Here in the month of october we seen gold prices rally some 100 in ten days time getting to a high of 13. 55 an ounce. Gold was unable to maintain those highs and traders say thats when profit taking set in and looking at perhaps a downward trend in gold prices, as we see prices getting below the 13. 25 level. The key determined in the next couple days will be what happens to gold in terms of retail demand and physical demand. It is the indian wetting season and often a time there is a strong physical demand for gold and etf action to see the largest etf does in investor appetite for gold in the coming days. Those may be the key determining factors where gold prices go next. For nightly Business Report, im sharon epperson. Gold wasnt the only thing falling today. Oil prices closed at a fourmonth low, 96 a barrel and exxon mobile, the worlds biggest publicly traded Energy Company reported profits fell 18 last quarter, even though it managed to earn 8 billion. That helped exxonmobil become the biggest gainer in the dow. Year to date, the company is one of the weakest performers in the index. Driving down on the numbers. Reporter Oil Giant Exxonmobil reported revenues above expectations but lower than the same quarter last year because Profit Margins on refining operations, primarily gasoline production were much lower. The problem is growth. When youre as big as exxon, its tough to grow. Demand is weak and the supply of oil is strong, thanks to abun dunlt discoveries of oil and natural gas in the united states. This company will struggle for growth. There is no Production Growth next year and 2 for the next few years. Reporter productions costs are rising worldwide and another issue for big oil, finding enough oil globally to replace what they lose each year. Exxon loses roughly 6 of the production each year to replace that, they have to find more oil often in politically unstable parts of the world or in a more difficult gee logical environment. Little wonder that whons stock has been stuck in neutral all year, up only 2 in a year when the s p 500 is up 24 . This is the third worst performing stock this year so it is difficult to get too excited about it. Reporter all the growth and Energy Stocks are in Smaller Companies that are part of the fracking revolution in the u. S. Where Companies LikePioneer Natural Resources and service Companies Like halliburton and schlumberger had huge returns this year. With slow growth, many investors are agitating for exxon to return more cash to shareholders through a higher evident or buy back more stock. Today exxon maintained the buy back program but did not increase it. For nightly Business Report, at the new york stack exchange. The Obama Administration called in powerful ex terminators to kill the bugs in the health care. Glove website. Experts are working with the firms that developed the struggling online marketplace to ensure stability and security for the millions of Health Insurance shoppers. For the first time in five years, the federal government ran a budget deficit below 1 trillion. Thanks to the cuts in the sequester and higher tax revenues, the budget short fall for 2013 2013 is 680 billion, lowest since 2008. Coming up, cities that have one or two days of cash on hand left. The ramifications coming up but first, a look how International Markets faired today. The buckle of the day where we start tonights market focus and why not on this halloween . Far su pharmaceuticals ariad after it stopped an on going trial of the medicine over safety concerns. The stock down almost 45 today and look at this next chart, down 88 for the month. And ding dong, avon falling, the shares tanked after they reported a big earnings miss. A drop in north american sales and emerging markets threatened the turnaround plan. The door to door warned numbers will be hurt by larger than expected fine by the fcc to settle a bribery probe. The stock dropped 22 today to 17. 50. The times reporting a net loss after selling the boston globe and set a decline on online ad sells. The stock is up 62 so far this year. Expedia stocks soared after the Company Reported quarterly profits much higher than estimates and revenues better than expected up 17 . The Online Travel agency said a referral system from trip advisor improved helping the companys bookings. The stock popped 18 to almost 59 a share. Growth overseas and an increase in people paying with plastic helped mastercards bottom line, the worlds second largest Credit Card Company posted a 16 rise and fell to 117. Aig reported earnings that Beat Estimates but revenue came in light. Strong growth in the property and casualty business helped but investors couldnt ignore the revenue miss so shares fell a fraction to 51. 65 and continue to fall in after hours trading. Everybody knows about detroits bankruptcy but a study of u. S. Citys finances indicates that many of the 250 largest u. S. Municipalities are close to returns out of cash. The amount of cash on hand was equal to 81 days of typical operating expenses. A city emergency requiring police and over time could consume much of that in a matter of days. Some cities with the smallest cash cushions, sheave port, louisiana and new orleans with 2. 5 days and fresno with less than a days worth. Here now to explain why the cities are so cash strapped is director, state and local Fiscal Health for the charitable trust. Good to have you with us. How do cities get in this paralaos state and how bad is it . Cities still have many challenges and recovering from the Great Recession. Their revenue bottoms lit much later than the state and federal governments which took place in 2009 and still struggling to get back on solid fiscal footing. Why did the revenue hit bottom later . Its a function of the property tax. The Property Values are still struggling, as well as the lag in assessed values and in addition to that, the state and federal aid was also cut during that time, as well. You know, i was is surprised to see cities like chicago, new orleans on this list very close to running out of cash over the next couple days. Is it possible they could become the next to detroit and go banks result . How bad is the situation . They arent necessarily running out of cash. What the studies measured was the fiscal cushion they had. The reserve funds or rainy day funds they had to cope with emergency. That said, they are still struggling but bankruptcies are very rare. I dont think youll see chicago or louisiana, shreveport, louisiana become the next detroit. Its something that most municipalities try to avoid. I read in the article they recommended that fresno for example should ideally have Something Like 10 Million Dollar in an emergency found. What is the typical cushion a city you would recommend should have on hand to make sure that it can weather, for example, a weather emergency. Well, every city is different and what they need in terms of reserve is going to vary from city to city but typically, the reason why cities are in a position they are in is they have to tap the reserves during the worst of the fiscal crisis and when they cap reserves, they cut spending letting people go like police officers, firefighters and sometimes administrators and then when that wasnt enough, they raise taxes. Cities had many tools to utilize to get through the worst of the Great Recession and fiscal aftermath, but, you know, they are still recovering. How do cities get healthy again . We know in washington there is budget problems there. That trickles down to the state finances and goes to cities. So how do you get out of this mess, and the economy is not growing much anywhere . You hit on a key point. Cities have their role in ensuring they are on solid fiscal footing but at the same time they need the economy to start growing again, too. And part of what the state needs to do is also think about the aid they want to provide localities. The level of money that often is given to states, which is typically cities, rather which is typically a 1 3rd has dwindled and nowhere near precrisis level. Now on the flip side, some cities and towns are doing better than others and thats thanks to the housing recovery. As the landscape levels out and more traditional factors once again play in home buying and selling. A new survey lists the top ten turn around towns. Dia diana olick takes a look. The red sox are champions. Reporter like boston doesnt have enough to celebrate, at one of the top ten turn around markets. There is different employers that are wanting to start new businesses in boston, which is a great sign. Reporter a realtor. Com survey came up with the quarterly list of the top teb. The biggest change that were seeing just on our list is that the state of california really had saturated the top ten and those cities such as oakland, san jose, sacramento have gone through the Recovery Process and now were seeing other communities and cities move up to the top ten and top 20 list. Reporter topping the list is detroit, a market decimated by the Auto Industry implosion before the rest of the nation saw any cracks in housing. A sharp jump in prices and selling speed pushed it to the top spot but critics say other factors still weigh on detroit. When we look at midwestearn markets in general, there is strong longterm demographics that dont bode well for the longrun health of many of those markets as opposed to the coastal sun belt western kinds of markets where there is a lot more. Reporter detroit is riddled with foreclosures and the nation as a whole saw foreclosures drop from a year ago according to core logic and judges are not involved in the foreclosure process in michigan, unlike in socalled judicial states where they have slowed the process dramatically. The top ten list and Housing Market in general are becoming increasingly volatile. Rising home prices, rising Mortgage Rates and uncertainty here in washington over the debt limit and the budget deal have and continue to take a toll. For nightly Business Report, im diana olick in washington. To read more about the top turn around towns, go to our website. Just ahead, something really scary and not good for your sweet tooth or wallet but first a look at commodities, currencies, treasuries on this halloween day. A few weeks ago we gave you the estimate and if youre among the 58 million americans receivings is youre payments will go up next year but not by much. Benefits will rise 1. 5 in 2014, the smallest increase since automatic cost of living adjustments began in 1975. Thats because the number is tied to consumer ininauguration, which barely budged over the past year. The increase averages out to about 19 extra a month. If you like using electronic devices, federal regulators are easing up on restrictions once you board. Youll soon be allowed to read, play games and watch movies during landing and take off. But you still cant make cell phone calls, delta and jetblue say flyers might be allowed to use their ipads and kindles as early as tomorrow. Finally tonight, it is of course, halloween, candys big day and the price of chocolate is about to shock anybody. Cocoa prices shot up 20 this year. Jane wells tells us why. Reporter kids, get ready for something really scary, candy prices could go higher. The reason, chocolate. Cocoa prices are up 20 this year, a combination of poor weather in africa where most of the worlds cocoa is grown and rebounding demand. We think this is the first year in 2013 where the level of global cocoa demand exceeds production for the First Time Since 2009. Reporter you probably wont see price hikes soon. Hersheys Contract Prices as much as two years in advance but it so strong some buyers may have to buy in the current market. The cost of a ton has risen to 2200 to 2700 and running through packaged chocolate faster than anticipated and sales of candy are up this year, but prices arent. Mixture is popular but chocolate is still king. Its the best seller. Reporter no one is suggesting well run out of chocolate, at least not yet and while americans are encouraged to have a healthy halloween, thats no fun. In fact, one company is mocking the very idy. Who likes halloween candy . Me. Crest has created a viral youtube hit with a video where kids are tricked into eating treats made from Healthy Foods like vegetables. Mine tastes like broccoli. The reactions are unscripted and a warning sometimes too real. Crest Parent Company pack tore and gamble debated whether or not to show a little girl spitting up her butter cup. Right after that she says i just through up. I threw up. You threw up . Okay. The context is the one where youre getting chuckles so we decided to keep it. Reporter plus her parents were nearby. The video may or may not sell tooth paste but certainly proves americans are crazy for cocoa and no matter how much it costs, you cant have halloween without it. For nignightly Business Report im jane wells. A little kid. Im crazy for chocolate and i dont care the prise. Youll pay. Youll pay. My son is being a police officer. Im going to run home right now and catch up with him. Okay. Have a happy halloween everybody. Thats nightly Business Report for tonight. Im susie gharib. Im tyler mathisen. Thanks so much for joining us tonight. Have a great evening everybody. Well see you back here tomorrow, friday night. Nightly Business Report has been brought to you by. Thestreet. Com. Interactive financial multimedia tools for an ever changing financial world. Our dividend stock advisor guides and helps generate income during the period of low Interest Rates. We are thestreet. Com. The following kqed production was browsed in high definition. Its all about licking your plate. I should be in psychoanalysis for the amount of money i spend in restaurants. I had a horrible experience. I dont even think we were at the same restaurant