This is 1÷ once and for all decision. Queen elizabethnr weighed in t aahweekend, as well. niwsnr she said that the scots should be careful about the decision and didnt officially take a side. Celebrities continue to weigh groundskeeper willie of the simpson working atlp the school and a supporter of independence and he wants to lead an independent scotland and qualified living in the united ive lived in america most oa my life and seen firsthand her not to run a counpe r r t hahp not clear whether it farevea the ideas. C the polls are close. Noes have a slight lead and the undecided vote is high enough to lead the outcome completely uncertain. The voting is thursday. Well get the results on friday. T you know, David Cameron as you report said this is forever, but thats axd littlee1e1 disingenuous. They thought the uk was permanent, too, right . Yeah, no. Hes trying on the one hand and used a little bit of softness and same time, little bit of a car lot. Giving you the things you want and sam time withe1 the stick tt says, look, if you go, youre done. Lp thats it. Maybe you lose all of the things that would have been benefits of youxd staying. Michelle, stay there. Talk about that among other t not just the alibaba ipo or÷d t Scottish Independence vote. Joining us ourt exchange today anthonyok chang of chase. Jason pride. Kim forest. Jf and welcome back rick santelli. Lets start withxd cyou, rick. I mean, the markets do you Scottish Independence . Anything about the fed move as you look back on whats going on in the market today . Well, i really have enjoyed michelles reporting today. Outcomes predicated on the voter thursday. Listen. I understand what it means that americans who want independence from the uk so i dont know. I think whats going on in scotland is fascinating. I do say that when you have the 7 undecided the burden of proof isgi definitely in the partq o undecided and most likely stats quo and myq opinion. As for the fed meeting, you know, we can conduct surveysni d whatever it is that people do and such fascinating fedni theater. In the niend, between theni bal sheet and how manyco treasuries are in that balance sheet, to me, the real story about the Federal Reserve continues to be the disparity of the what would Interest Ratesxd be if the fed hasnt done orna accumulated wh they have and unwind it and the answer ise1e1 elusive and i thi some point result in at very,x very quickxd pickup in rates ani dont see itxd happening any ti soon. All rigv4k rick, we keep hearing about the fact that qe is about to end but we havent heard that much about exactly how the fed plans to begin selling off some of the balance sheet. Jason pride, when you think about what the fed needs toc sa this week to allay some of the concerns of tku market that the exit is oeqsy and that the economy might not be Strong Enough to support thec language iahp hc at here . Look. I think the fed isjf going to b continuing toe1e1 communicate an of takingc awayjf stimulus onxd aggregate and doing so inok an incrementalist, minimalist sort of approach andq tapering of th bond buying. Probably doing theq same thing n Interest Rate increases. Hing on actually shaving down the size of the ba4aat letting thino shaving down the size of the mature off and what uetk want to do is they want to get back to normal and they dont know exactly when they want to get looks like. Take they can peelxd away ea layer one at a time incremental slivers and see how thefa marke and the economies react to it. Thats what theyre doing so far and again. I think we haveq forgotten what normal was or used to be. Anthonylp chang,ni the question many ofko usco have. Yeah. The question is whether the fed takes out a key phrase embedded in theira5xl communique for sev months now, that being keeping rates at a record low for a considerable period of time. Do thuyr take that considerable period of time phrase out this ÷i e do you think . Phrase out and equivalent of getting a wound and youre hurt do they take it off carefully or yank it off. They can take the langni wang o and suggest theres slack in th u. S. Labor markevy so that you overall Monetary Policy, that it is not going to be very dramatir or perhaps to putco in there th normalization is about tot sta but it is not imminent and not going to startjf anyxd time sood not necessarily a considerable period. Remember, the considerable period language began in 2012. Its already been a considerable period since they said that. They can start thet normalizatn process and doesnt have to be i imminent. Considerable is probably just vague enough word they were looking for right there. Kim, trex s p a little bit, eve on lpwednesday, the dow up 49. It does seem like theres a little bit of complacency in the autti andt yet we have had alle 3,000 from morganni stanley. The bares areq throwing in the towel in a way we havent seen before. Do you think well go high ore tn market despite the fed . Depends on the time period yourejflpe1 talking about. Lpe1 of course we go higher. That being sard,e1 i think it i extremely costlyrqoclp to be a the twoxd guests before me i completely concur with everything that they they said. Q this is a very measuredt fed. They understand the impact that they have by taking xdaction. Theyre going to do things very slowly and carefully. E1 permly i say rip the bandaid off and get back tonb normal. We dop being really careful, do we . We have to coreact to things. Theyre making the universe and all of this happen. So, as long as they cannico do [ theyre going to tryt ko to sup thic [a5recovery. Over time. Michelle, lets go backni to here. Do you think, do you sense that the markets have alreadyni anticipated the vote going one way or the co3wother . If they do vote for independeqq in scotland on thursday, what do you think the market would do that . coco wait it out until the end. If you cant stomach the potential volatility. The youre a risk taker and want to get in there, thats a different story. A shortterm play. The overwhelming view if you really have to put money on it, they think its a no. So watch out if its a yes. Michelle, scotland wants to keep the pound and even if it does split off. Whats the likelihood that the uk lets them do that . It is not up to the United Kingdom what scotland does with the currency. But the definition of independence. Right. What . That would be the definition of independence. Not necessarily. You can be ecuador is independent country and nothing to say about ecuador. They use the dollar. A country can use whatever currency it wants. The question is, can they absorb the costs of absorbing their own currency . If you decide to use a currency that you cant print, that means your Banking System has to be platinum plated. If you ever have an issue with the issues, you cant print to stem off a run. Right . So that means youre probably going to have higher capital restraints and constrained in lenning. You dont have a choice and cant set Monetary Policy f. The United Kingdom wants to burst a bubble in real estate and scotland wants to motivate the economy then they dont have a choice. Right . Those are the choices that they make and stick with the pound they can stick with the pound. Yeah. Well, it is potentially major historic move to see on thursday. I know youre heading out tonight. Tonight. Safe travels. Lock forward to your reporting this week from scotland. To the rest of the panel, thank you for joining us. Anthony, jason, kim and rick. Well see you later on. With just about 45 minutes before the closing bell, we have the dow up steadily in green territory. Nasdaq is down by about 47 points. Taking a big breather. Ahead of a really major ipo this week. We have more on the markets coming up here. John calamos will tell us how hes putting his clients to work and wait until you hear if he thinks the fed will raise Interest Rates sooner than everybody else thinks next year. Thats coming up with john. Also ahead, apple will reportedly rake in 15 cents every 100 transaction on the apple pay service. The pros explain why it could be a huge revenue stream and potentially a game changer for apple stock. And then later, General MotorsCompensation Fund making its first payments to families of victims injured or killed in those accidents related to faulty ignition systems. We have details on that when we come back on closing bell. Stay tuned. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. For over 60,000 extra curricular activities help provide a sense of identity and a path to success. Joining the soccer team. Getting help with math. Going to prom. I want to learn to swim. Its hard to feel normal, when you cant do the normal things. To help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. Not everyone can be a foster parent. But anyone can help a foster child. Quick snapshot of the markets as we head toward the close with 45 minutes left in the trading day. The dow is outlier right now with a gain of 40 points. S p, russell down a bit. A bit . Down more than 1 today. Theres been a concerted selling in the small caps today and the technology stocks. Earlier in the day looking at the top five or six on the laggards on the nasdaq and all up between 25 and 80 this year. Theyre retreating seeing pretty immense gains. High fliers or not today. Thats right. Yes. Main street was excited by the iphone announcements. Reportedly apple will be getting 15 cents on every 100 transaction in apple pay which is quite a big amount. It adds up. How much of a game changer will this be and what are the implications . With us, max wolf, heinz morris. I was going to say nyca. That works for me. Former president of visa. Thats right. You got that one right. Is this a game changer . Mobile payments with the future anyway but now the model that apple is going to implement where you swipe your iphone to pay rather than using an actual card, is that the future for payments in this country . Well, i think the way i would think about it is some of the ideas have been around for years. Very Successful Companies tried to attack this problem. I think the issue is two. Most people in the United States paying with the credit card is not a big deal. However, there are many, many interesting applications and why now has apple been able to pull it altogether and make it work and i think two things. One, the security environment has changed. People are a lot more sensitive about presumably more secure. Definitely. The second thing is, has to do with the very complicated and arcane aspects of the Payment System but that matter a lot in mobile payments. And i think what apple is able to do is cut through all of that. Use the marketing power, their i think their reputation Consumer Reputation and their ability to put together fairly technologically compelling products, pulling that together and pulling the echo system together enabled them to get something done that no one else has been able to do. Its especially unique that apple is able to wedge itself into the revenue mix that typically the merchant and the issuers and the banks sort of all they all shared that per transaction but, max, im wondering if youre seeing apple being one of the only players thats actually able to negotiate successfully to get a piece of that revenue, what does it say about apples clout and the fear of the banks potentially harboring against the new technologies . So thanks for having me. I think its a great question. We have seen apples future. I dont know if weve seen the future. The likes of swipe and square and others and many of whom disadvantaged by this probably much more square than swipe to be fair is that apple is now insinuated itself in the mix with a payment app native to its operating system. That is bad for the standalone payment apps and entered the fray getting economics and been a builton addition that the merchant or the consumer bears the cost or share it. Here the cost is very small. Theres an incredible increase in convenience. The question is, whose economics does it come out of . Just seeing the future for apple or the future for mobile payments . I think it is too early to tell. There is a regulatory issue and technology is ahead of the regulators here. In essence, you can think, apples becoming a bank by doing this, arent they . Not really. I dont think theyre doing any of the banking facti ining func actually probably careful not to do that stuff. Lets talk about one thing, a big deal. The reduced risk, if you can eliminate fraud in the some of the transactions, thats thats a big deal. 10 to 15 bases points. Right. What apple did a and a very important point to get across. If you go to the restaurant and use a card, they have zero risk if the card is stolen. The card is present. Present for the transaction. You buy something through a catalog or online where the card is not present then the liability shifts and its called the liability shift. Thats shifted to the merchant and big deal and explains the issues of why its hard to get mobile payments doing because technically the card is not present. With apples system its still on the card issuer. So that theyre going to the merchant saying theres no liability shift. This is sticking with the fraud risk with the issuer and telling the issuer to implement new technology which hasnt been used yet. Technology makes it more secure. Conceivably eliminates cost for the system and but even if it doesnt, its merchants and banks to agree to doing this in a way no one else can. If it doesnt they still get a slice of the earnings and transactions. Max, how big a business do you think this is for apple . 15 basis points doesnt sound like that much money. 2 of the retailers that accept traditional plastic. How long until it becomes a big revenue stream for the company . We think it will be a while. Probably an indirect pref knew stream and pushing people into the ios Walled Garden and how they make money on the apps and devices and what apple is doing is inserting themselves in a general pivot in the business. We have had swipe and sign transactions. They have to change in 2015 to whats called chip and pen around the world and apples front running that and taking advantage of the fact that they have to refresh the hardware anyway and leapfrogs the other guys in the space and 15 basis point shows up and also allow apple to take credit to the Consumer Base and media for a basic shift in the market toward chip and pen away from swipe and sign and literally piggybacking of a trend to greater security and a refresh cycle so theyre really jumping in at just the right moment and we know its the future for apple and remains to be seen. Tbd still for the future for the space and nfc looks like they won with aapples adoption. Very interesting. Can see both max, heinz, thank you for your insight today. Thank you. What could be a game changer. Toward the close. We have 25, 35 minutes left in the trading session. The dows higher showing you here. But the other major averages are not, especially that nasdaq down 1 today. Were all watching for the alibaba ipo. You especially. Me especially. Well get a little bit of news later on in the show and the ipo price is going to be hard but it may be harder to buy the shares than you think. Our own jeff cox is going tb here to explain in just a moment. And when we come back, think neimanmarcus and saks fifth avenue and think luxury and how about costco . Theres a highend Shopping Experience at warehouse prices. The pros will toss that around in the stock crawl on costco after the break. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Wait, wait, wait, its wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. E financial noise financial noise financial noise financial noise big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. So when you talk Luxury Brands in the retail arena, you think tiffany, nordstrom, michael cors. Do you think costco . Or you might now. I didnt until i read this report and citigroup initiated the coverage of a buy rating saying among other things the Company Offers a compelling luxury brand to the highincome consumer. With us now is citi analyst of that report, oliver chen and also with us is Greg Greenberg from the street. Com whens not so positive an the stock but oliver, since you published on this, well start with you. Thank you. You say costcos customer has an average of 96,000 in income per year and they come in willing to spend and willing to spend on higher ticket items. We are excited about the affluent appetite. 96k versus walmart and target and costcos the biggest importer of european fine wines. Famous for 112,000 worth of carats and diamonds and the markup is very low and low employee turnover. High service. At a low price. Because the markup rate at costco, is about 15 . You get great prices there. Greg, youre not buying this, are you . Only thing luxury about costco is the stock valuation. Trades at 24 times next years earnings versus walmart at 13 times and i think target might be 14 times. If you remember for a while, everybody crazy