Switch shares up about 24 this afternoon. Well look at whether that treasury move could help juice the market for ipos coming up. Meanwhile, the new blade runner sequel hits theaters this weekend were going to look at whether this film can revitalize the struggling box office. Lot of fingers crossed in hollywood here as they bring Harrison Ford back one more time. Well see. Good luck. Hope it works. Lets begin today with a jobs report, though. Eyeopening number hs this morning. Our senior economics reports Steve Liesman joins us from austin with a breakdown of those numbers. Steve . Reporter yeah, bill, you had to cast your eyes down on this number here. But whats happening right now is people are really throwing out the weak number on the top line and looking to the details of the report and they find strength here. Let me show you what theyre talking about here the top line number minus 33,000 quite a bit below the 80,000 estimate you have the revisions to the prior months which were okay they look like theyre big, one of those numbers was plus 250. Most of that number remains. That was good. Average hourly wages, very strong the Unemployment Rate, ticking down patient rate, ticking up more people coming into the workforce. Economists found strength in that plus we know a very big hurricane effect, hurricane havoc in these reports heres some of the data. You can see here that the number of americans that worked part time due to weather, 2. 9 million. Nose who didnt work at all due to weather, but have a job, 1. 5 million. The most in 20 years then leisure hospitality, maybe thats universal and disney world, down 111,000. Who got work the Insurance Agents got work. That was up by 1 11,000. At bmo, saying, the underlying strength in the september jobs report will encourage the fomc to lift policy rates in december. Maybe, maybe not first, let me show you what Robert Kaplan this morning in an exclusive cnbc interview said about the jobs report right after it came out. I think a lot of these job losses, our judgment will be temporary. I think labor markets are tightening, yes. Im not saying there isnt still some more slack, but my judgm t judgment, i think labor markets are tightening reporter so tightening labor markets you think capital would be somebodys ready to hike rates. Not so fast. Kaplan is troubled by the low Inflation Numbers and suggests maybe theres a disconnect now between higher wages and inflation. Hes not so sure that its time to hike rates. He said hes still on the fence for that december rate hike. Kelly . Sounds like larry agrees with him. Wow, was that like a fall i heard there . Stay right there. Mr. Larry kudlow is sitting here next to us with more reaction. Kaplan and kudlow was this was mr. Kaplans idea that the connection between wage rates and inflation, is that breaking news i mean, Yellen Yellen in her speech two weeks ago said it hadnt worked in 20 years. My only difference with miss yellen is it hasnt worked in 40 years. Thats all im glad wages are larry its not inflationary. Reporter the news is maybe not among the people such as yourself who have been so smart for so long but among policymakers who have begun to think about this whole idea here of whether or not this phillips curve, connection between wages and inflation is really working and theres more doubt about that than ive ever seen everybody should read the speech from brookings yesterday or two days ago, he said, you know what, with e dont have a fo formula for predicting larry, i know you have a different way, you can take the floor or argue on that. Im glad the fed is coming to its senses i think the economy is improving. I think the wage situation is improving. Labors improving. On the other hand, the dollar is at a sevenweek high. I think this whole thing has better growth underneath it. I kind of enjoyed the household number 906,000 people, the household number thats a little weird. I just want to say one last thing, before the others chime in, youre asking different questions. The payroll number asks, did you get paid this week the answer is right good point, larry. Because of the hurricanes a lot of people didnt the household number asked you, do you have a job . So the answer to that is going to be yes, we have a job, and more people are now moving back into the labor force so, a, thats good, im glad we a little pop there. People are happy, prosperous and working. Thats trite b, i think the fed should be looking at the rise in the dollar much more interesting to me. And doing what about that, larry . I think the fed ought to claw back what it can here, larry i think thats an important thing here if the fed has an opportunity, without disrupting markets, without disrupting the economy, to get a little ammunition for the next recession, if the fed has an opportunity to normalize, that makes a lot of sense to me. I might agree with that i might agree with that. I just want to note, though, that you have a strong dollar and very weak gold Price Commodities are up and down, very mixed commodities on the whole, probably up a little this year with the rising dollar, not as much i dont want the fed to panic over this wage number. Thats all im saying. We may be at a sevenweek high at the dollar index at 94 but started the year at 102, so, you know i get that. Weve come down precipitously in the last year. Look, i get that. In 2011 or 2012, the dollar index was 70 okay so, you know, were not pegging the dollar to gold as i might prefer, some commodity basket. All im saying is heres the biggest picture of all the economy is getting better. Look at the isms huge yeah. Equates to almost 3. 5 growth look at the cap x, core cap x from the factory orders. Improving major, bigbigtime finally i want to look at Steve Liesmans cnbc optimism index on the economy. That thing continues to grow if we put it all together are you bold on the three rate hikes next year, is that what this comes down to . I think its a good news bad news story there i think theres a good news bad news story there for markets the first one is, theyre onboard with those three hikes we had Patrick Harker yesterday from the philly fed saying so. At the same time we have this notion from the Federal Reserve, the end point, the terminal rate is lower than we thought so we had ckaplan this morning talk about a 2. 5 fed funds terminal rate. That would be lower by a factor of, i dont know, two or three times than previous terminal rates for the Federal Reserve. So jour goi so youre going to spend time getting there, have disruption in that but the end point is not so high. I think thats something to think about. Something, by the way, that calms the market remember the market is discounting those future rate hikes. Its discounting the terminal rate to some extent and its not finding a whole lot to really be upset about in those numbers. And dont forget, dont forget, so few fed people get, fiscal and monetary works together okay now, my crystal ball may not be better than anybody elses, but i will just say this, as we are here on friday afternoon, there is growing momentum for the tax cuts by year end the budget committees are reporting out budget resolutions, which will then next week be translated into reconciliation instructions. Theres going to be some babbling over some small elements in the tax package. I may be dead wrong here ill just say it, i think the market, stocks, and the economy and business and investment is now beginning, once again, to discount a very powerful progrowth, proinvestment, prowage earners tax cut. I love it. I think its fabulous. But larry, you have work to do, larry. You have work to do because so much of the market, so many people reflexively believe something that im grateful you taught me, i dont know how many years ago, maybe im embarrassed to say this notion that growth does not necessarily create inflation. Right. This is a reflexive idea and its reflexive, by the way, on the fed. I think its fair to say that growth raises the risk of inflation. That is, its hard to have inflation when growth is negative or when growth rates are declining. But it doesnt necessarily cause inflation and i think the fed is willing to wait and see on this. Theres some concern, 4. 2 Unemployment Rate, wages rising, a big deficit stimulus is something that could spark inflation. But i think theres a little bit of rope on this from the fed when it comes to reacting to the fiscal stimulus. Look, last quick word. I was with you until that deficit stimulus part. Let me just view petrepeat not the way the fed kevin warsh believes growth will not cause inflation and will be an excellent reformer if he becomes chairman. Final point. These are fundamentally supplyside tax cuts they are business tax cuts they are investment tax rates. They will improve. Not only do they increase the return on capital, they lower the cost of capital and it moves right into productivity and higher wages that cant possibly be inflationary if this was a straight tax credit temporary thing, that would be demand side that might be inflationary what youre doing is going to bring up more investment and more output and more people working and more wages and this has to be great country, i mean, really, what a great country this is. Steve liesman, fear not. Fear not. And what a thats my word to you. What a great exclamation point to end that. Sign me up. Sign me up and im not embarrassed to say ive been learning at the knee of larry kudlow for the last 26 years, so, yes, he was my junior high economics teacher back then. Thanks, guys thats fabulous. See you later have a good weekend. Touche. Meanwhile, the s ps win streak is in jeopardy. Among other streaks in jeopardy today. Lets get to our closing bell exchange, david from hightower is with us at post 9 so is steve grasso from stewart frankel. Rick santelli at the cme im going to start with you today because the action in the treasuries, i think, has been pretty interesting the yield on the ten year hit 240 after the jobs number came out. Then there was some word about maybe north korea getting ready to launch another missile. And it went back to 235. So, very much crosswinds hitting the treasuries today, right . Reporter yeah, i think if north korea was never even a country, i still think it would have probably turned out the same thats just my opinion you know what, the wage component really shocked many many and it caused some selling and the dollar followed and everything reversed a bit. But, you know, if it was north korea, were still up on yields on the day, were still up on yields on the week, still extended comps last time we were at these yields what we didnt do is get followthrough above a key level. You know, the last two tops were 242 and 239 respectively which defines them as failures to get back to unchanged when we settle at 2. 44. I think today was a technically significant day. I think it is exactly that technicals, for many like the bond market, its a three hday weekend,closed for columbus da along with the banks im surprised it didnt give more back. I think the dollar index a bigger story i know larrys right sevenweek high. Yeah its also down 8 on the year. To me the dollar index is one of these weird anomalies where theres so many moving parts not the least of which is overseas and relative value with other currencies kind of hard to get the gps there. Think october 26th, ecb meeting, will give us a lot better view on what the dollar is gong to look like by year end. No matter what, steve, youre saying buy this market is that right . If you look at, you know, to ricks point, a lot of this stuff is on a technical basis, how things are trading, but the path of least resistance still to me is probably higher we have a bunch of round numbers here 25. 50 in the s p cash, have a lot of people staggering up there, a lot of open interests so to speak. Also jobs. Today. Caused the rate worry. Then you have north korea. Caused the geopolitical tension. You have is people wanting to take profits because they dont want paper gains to turn into real losses. All those things put together, weve seen them all. We seen this act before. And the markets still rallies. So, while i think that the tax policy reform is going to take a lot longer than people think it will, i think the market should be bought because thats whats happened in the past. David, i know you are the guy that likes the dividend payers, but what do you do with that strategy as rates continue to creep ever higher . I want more of it because its the best strategy to defend against it you want growth and you want risk on but the reality is that the best insulation against growing rates is something that can actually grow its rate it can pass on inflation because it has Pricing Power i see mcdonalds as one of the dow stocks leading today mcdonalds is my favorite example to use here, they raised the dividend something mike 16 sometimes since the financial crisis it tripled guess what the stock price has done its strip lblank bla tripled. If there are not higher prices at mcdonaldss theres no inflation. Becomes a permanent area to play offense and defense. Make tactical adjustments along the way. We love the strategy i have to say real quick, kayen no tell you what a blessing it was to sit here with larry kudlow, one of my best pals. To hear everything he had to say about the death of the phillips curve was inspiring. I will say, if im not telling tales out of school, you were applauding. I was tearing up a little bit. A little bit there, yeah. I dont want to put a damper on thing, steve, i want to ask before we move along about the president s comments about the calm before the storm. I dont know on a different kind of day, the market psychology might have reacted to that differently it appears to be shrugging it off. We heard the fire and fury, that comment, too, and the market is becoming a little desensitized to a lot of these Different Things im not saying the market cannot sell off because im not painting this picture that everything is rosey. But when we do get selloffs, theyre shorter in duration, and theyre shallower than they were before so that leads me to believe that if youre selling this market off of a jobs number thats going to increase rates, you have to look at this number is probably going to be thrown out. Theres too much noise from the hurricane. Look at the dows only down 15 points right now. It was down eight points a moment ago yeah threatening to come back well see. Im building a little drama here before we get to the close okay h thank you, guys. Have a good weekend. Everybody, and rick, have a good threeday weekend there with the bond market closed on monday thank you much. Well be here watching this market. Thats right, were not going anywhere. Ill be watching. For nomonday we have 45 minutes to go before we get to that the dow down 16 points. S p down five. Russell down three small declines across the board compared to what we saw earlier today. Coming up, costco beat on earnings and revenue after yesterdays close as we told you. Why is the stock one of the worst performers today well explain this nearly 6 drop next. Also later were going to tell you what prompted an executive from General MotorsAutonomous Vehicle unit to call tesla boss elon musk, quote, full of crap they didnt think id say that di i did. Wed love to hear from you folks. Reach out to closing bell on twitter, facebook, or via good oldfashioned eilma youre watching cnbc, first in business worldwide is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Shares of costco down big today. 5. 7 tumbling after reporting earnings after the bell last night. The wholesale club posted a beat on revenue and earnings, but a decline in the everimportant Profit Margins and thats putting pressure on the stock, and sparking concerns over membership. And an escalated Grocery Price war. You saw that down almost 5 well, almost 6 now. Big move. Yep. For costco. The pressurery rtreasury ra report today Kayla Tausche is in washington with those details reporter kelly, part two of four of treasurys regulation rethink. Todays report largely with those markets regulated by the securities and exchanged commission and the commodities and Futures Trade Commission and it delves specifically into ways regulators could make it easier for businesses to go public and find investors. The report calling for loosening Public CompanyDisclosure Requirements for conflict minerals and pay ratios to name just a couple. It also calls for raising the threshold for what they call Smaller Reporting Companies which have rules to 250 million in share float to 75 million. It suggests widening the universe of whos considered an accredited investor and letting more people participate in private fund raisings, for crowd funding in particular, treasury suggests an increased fundraising limit of 5 million. When asked whether this would mean private companies would have to share more information with those investors, a senior treasure tri official said no. Critics called it a gift to wall street today exchanges, though, echoed the natural enthusiasm of the Trump Administration nasdaq ceo tom whitman says it looks forward to working with the department to support the objectives outlined in this report and revitalizing our economic environment. Treasury cites data that show a 50 decline in publicly traded company over the last 20 years and says through this report that deregulation, kelly and bill, is the way to fix that we will see kayla, thank you something to think about there lets bring in bob pisani to talk about how this could affect the ipo market as we know more companies are choosing to go with a private equity route. Is it because of the regulatory scrutiny that they face otherwise . Well thats been going on forever, anyway. A long time look, the i