Transcripts For CNBC Closing Bell 20161005

Afternoon. The fbi secretly arrested an nsa kr contractor for stealing contract materials. He worked just like Edward Snowden. Another black eye for the firm and shares are moving slightly lower. We have details on what was allegedly stolen and the potential fallout here coming up. Meantime, salesforce. Com is reportedly getting more serious about this bid for twitter. Shares of both stocks moving in opposite directions, although there has been a comeback of sorts for twitter. Jim will get more on this. A possible bid for twitter by it sales force. The weaponization of finance. Thats when countries like the u. S. Use the power of banks to impose its will on other countries. Ian bremmer will explain the risks of this strategy. Its a lot to think about. Hes calling it after the gzero. Youve got the imf meetings tomorrow. This will help get us in the mood for global conversations. Lets start with western crude at 50 a barrel. Plus this discovery, more oil off the coast of alaska. Jackie d. Has more for us at the nymex. The high was only 3 cents off. The technicals really driving this trade right now. Of course, we do have some support from the opec deal and the number. Usually the trend will break through, even if its only briefly. It didnt happen today, but traders still think its possible. How long can we stay at this 50 level . That is the milliondollar question. Many people say were going to be rangebound for the rest of the year with this being the high end of the range. Remember, we could take another drastic dip down into the 30s. We did do it last year going down to nearly 26. Thats when demand dropped off. Some people are concerned that opec deal just might not materialize at the end of november, so thats something we have to watch for. Finally you mentioned that discovery in alaska of oil reserves, that would boost the states production by 40 in the future. This is just one of those examples. We were very concerned about oil being a scarce resource in this country, and now we find ourselves to unlock all these, we could potentially see Oil Prices Continue to stay low, even lower than where they are. If we dont get the demand up to churn up the supply, and we keep poaching, its not going to balance out. Back to you. Its good if we can. You said highs for the session. Sergeant gill foil, and Rick Santelli checks in from chicago. You know what . Im going to start with r. J. , and youre the fixed income and so do stocks. We have this sort of what do you see going on here. I think starting a couple years ago, looking to push our yields a little bit higher. Then today we had sochl strong data. A nice bounceback in the u. S. Economy, affirming the growth path is certainly going to be well above 2 . With that yields are heading higher and they expect in terms of other fed officials going forward. So, saerj, tapering used to be a really scary word for the markets, this prospect of federal income tax hikes and better data used to be her blessing to the fed to go have them make a move. Oil stopped at 49. 95. Which is the tech level rkts it cant be put tonight. Going back to the other so i had of question, the two ism reports were very, very promisely. The manufacturing and the nonmanufacturing sides. Ism. This friday we have the jobs report, next week we have retail sales, next week efrl, then i think the fed is clear to go. I dont know if theyll go in november, but i think if we look like we these products rkts. And now we get to rally in stocks. What do you make between the interpersonal relationship and fixed income today . I think the fish market has issued remembered. Sometimes those types of confer mon danes move have to make. In terms of stocks, i think thats pretty clear f. But what short memories we have. This is the problem with near termism, especially when it comes from the top down. Last month was 51. 4, the lowest level since february of 2010, okay . So really theres nothing new. We ebb and flow on data. You take a step back, nothing has really changed with regard to the glide path. I look at forecasts from the imf. Theyre about as accurate as we see from our fed. But the one thing i found curious is how the u. K. Versus the eurozone in its entirety for growth next year, that spread is not very wide. What that tells me is they completely miss the dynamics there, and i think all of these are important issues, but at the end of the day i think stocks are doing well because i dont think anybody soersly considers fred making a move in december. Whats going on in treasury isnt because the economy is on fire rkts but whats left of the fixed income gas. A lot of good points there. R. J. , how is the market position for the jobs report on friday . Well, over the long haul, the market has gotten much closer to neutral. Positionwise, its not too surprising, then, whether its news r there at the jobs report on friday. Someone neutral in his positioning needs to move and react to the data. I agree weve gotten focused, but many forecasts from the fed to the imf to the private sector about gdp rates is proven to be wrong. With the rumors coming across. I wouldnt be surprised to see an upward bias to meals today as long as the date at reflects it. Youre a lot on the gord those poll odds. Is. If, there is a chance, maybe not in the last hour or so, but we can go to 21. 74 real quick, maybe within a day or so. Thank you, guys, so much. Appreciate it. Now for the deadly hurricane making a beeline for the southwestern u. S. Mccoy is in a walmart in miami with the latest on the storm. People are probably stocking up, blake. Reporter from everything from batteries to flashlights, even wood to board up peoples windows. This is happening from here in miami all the way up floridas coast and into the carolinas as this storm looks like it will brush light. Right a lodge. The governor has ordered evacuations and president obama is urging tho those. If there is an Evacuation Order in your community, you need to take it seriously. We anticipate that not only is there still a chance that the core of the storm strikes florida and some of the states further north, but even if you dont get the full force of the hurricane, we are still going to be seeing tropical force wind, the potential for storm surge and all of that could have a devastating effect. A major concern with those winds is, of course, not only the damage to homes it can cause but also to power lines. It can knock power out very easily, and it will be quite some time before power can be restored in the milgd of a storm, obviously crews are not be enough for the storm. Get enough at this power, they are cancelling all flight, but after tomorrow, there will be no flights in and out of miami, and this is a major hub for them. Guys . Before you go, i heard at least two counties in florida, theyre mandatory evacuations. The rest are ont, or are they expected to make them mandatory in the longterm or shortterm. We heard a similar thing from governor nicki hail hell. Many. Look at it as an evacuation and get out. A lot of these people have been through these before. Blake mccoy in. The dow, a pretty good balance after those two down days we had so far. Coming up, mad money potential bid for twitter. Jim joins us with the highlights and whether he actually thinks sales force and twitter will make a good fit. A lot of companies, apparently, are a good fit with twitter. Another black eye the fbi arresting an ntsb contractor stealing. We will speak with a accident tent pochlt. Cnbc, first in business worldwi worldwide. Amazon launches a new benefit for prime members in the u. S. Its called prime reading. Its a service that provides access to more than 1,000 kindle books, magazines and comics at no additional cost. In fact, users dont even need a kindle ereader or fire tablet as long as they have the kindle app on their ios or android devices, citing amazons prime membership service, Morgan Stanley and suntrust are raising their price targets on amazon stock to 950 and 850 a share, respectfully. Another Samsung Phone overheating and putting out smoke on a plane. Josh lipton has those developing details. What happened, josh . So, sara, more bad news for samsung here. A Samsung Galaxy note 7, the very kind of smartphone that was recalled for overheating batteries reportedly started smoking on a Southwest Airlines flight. That incident happened this morning, apparently forcing the evacuation of that flight while it was still on the ground at Louisville International airport. There was smoke in the cabin, but nobody was injured. Now, there is some conflicting news right now about the phone causing these problems. The owner of that phone is telling nbc news that it was a replacement galaxy note 7, but samsung in a statement to cnbc saying there is no evidence that this incident is related to the new note 7. We are working with the authorities and southwest now to recover the device and confirm the cause. We have reached out to samsung and will bring you that reaction if and when we do get it. Guys, back to you. Thanks, josh. And thats a replacement phone. Right. Justin, in the middle of a time when theyre already in damage control over this massive crisis. Interestingly, the shares are back to the highs of the year. Well have to get to the bottom of this before its over. Our next guest says politics as we know it is over. And now hes calling on the National Monetary fund to turn its course toward politics for the First Time Ever in order to combat a rise of what he sees as unilateralism and the use of Financial Leverage as weapons. With us now the president of the eurasia group, ian bremmer, who just spoke to the fed. Ian, good to see you. Good to see you. Were all going to d. C. For the fun tomorrow. You guys are. Ill stay here. Heres the problem. The imf typically does not get involved politically. Even now, for instance, christine le guard weighing in on trade. Theyre careful not to make it a global issue. Weve dealt with the sort of big recession, the financial crisis in 2008. But the geopolitical recession is really just picking up steam. Tha thats about a lack of global leadership, its unilateralism of everyone else, the antiestablishment tendencies were seeing makes it difficult for them to do their jobs. If theyre not able to address the politics in their mandate, then they wont be fit to create the kind of stabilization we desperately need from these organizations. If they wont do it, the chinese is more than happy to pump a bunch of money into countries, but they wont have the stamina that the imf was created to support. You said the cooperation that has existed since world war ii is starting to dissolve right now. Were seeing that. How does the imf deal with that. They are, in essence, a political body. How do they deal with the politi politics . Right now they deal with it behind the field. Christina leagarde said they ned to recognize that political instability and the changes in the political order are going to directly undermine their mandate. If theyre not able to comment on that in the same way they comment on a country which is not putting policies in place that will allow them to grow or meet the imf mandate, youve got challenges. Right now theyre trying to fight with one hand behind their back while other actors are much stronger. When donald trump says putin is stronger than obama, of course, he is, hes a dictator. The fact is if other institutions around the world are able and willing to bring everything to bear, to actually make economics work for them, then americanled institutions have to do the same thing, and the imf has not had that capability. But the imf is not necessarily an americanled institution. Yes, it is headquartered in washington, d. C. , but the way the fund works is that many different governments around the world put money in, and they have to please their parties that are members and that are funding them. In fact, congress has held up money for the imf for a long time now. So how can the imf go about picking sides when, a, its not an elected body of officials, and b, they cant have loyalties because all the members pay in. The imf is not an americanled institution. On the other hand, it was created by the United States and has a series of values that support liberal democracy and westernbased free markets. Now, no question in a world where the chinese and other emerging markets are a bigger part of the Global Economy and theyre paying more in, they need to have more of a say. So the imfs mandate is going to have to represent less of those western values than it has historically. But you cant allow the imf to become the g20 where whenever they meet, they accomplish almost nothing. The imf has to get things done. Are they on board with your idea . They asked me to do it. It was precisely the fact that christine and david lipton, number one and two at the imf, realized they did not have a political mandate. They said, can you put together a pamp for per for us and well around and talk about this. And the paper is called after the g0, overcoming weaponizati weaponization. Another good conversation is tapering in policies. About 45 minutes left to go here before the closing bell. Triple digits on the dow, 119, s p 500, 44 . The nasdaq,. 50 . Sara kelly talks to jeff osher. That will be coming up in a minute. An nsa contractor steals government secrets when the closing bell comes back. Lets send it to kate kelly. Shes out there exclusively at a conference by jeff osher. Its all yours, kate. Its great to be here with jeff at his First Ever Television interview. Welcome. Thank you. This is a really challenging market, but youre up 6 since june 30 which is better certainly than the average hedge fund and better than s p by twofold amount. Tell us how youre doing it. Were not doing a lot differently than what weve done the last 11 years. Were faux very focused on idiosyncratic ideas. There are very companyspecific ideas that have nothing to do with gdp linkage on the long side, and there are a lot of smaller, midcap names that we feel have holes in the Balance Sheet that we continue to focus on in the short side. Typically you tend to run twice as many short positions you do long. The fund ifrtself is disciplined around a market approach. With the longs typically being two times the size of our average short, and the net effect is a Market Neutral approach that insulates us from the volatility of the market. One thing youve done, its not a short thesis, its a long one, but green dot, the prepaid card company, you called for three new Board Members you were suggesting, two new directors, the ceo is still in place. Whats your next move there . I need to be somewhat sensitive here but i think there is Unfinished Business at green dot. This is a franchise that has assets that could be unlocked to world class leadership. The board, i think, understands the referendum that shareholders unequivocally delivered with only 20 of all shareholders voting for the ceo. There are two paths here. The first path is to replace the ceo. And there are reasons that we would support the board choosing not to take that avenue. The Second Avenue is to allow a strategic or financial buyer to try to maximize those assets. At this point based on conversations were having with the board, we think the board, the new board, the newly constituted board, understands what the fiduciary duties are and has real reputations, and we think theyll ultimately do the right thing here, which is a change from what we thought would happen three to six months ago. Okay. One last question because i know we have to go in a moment. Im curious because you went for gold. How do you feel about gold now . Some people like it as we enter a field of volatility, partly because of the new president ial decision . How do you feel about that commodity . I dont have much of an opinion on gold. We have several mining shorts in canada that hedge out that commodity risk. A marketneutral philosophy, again . Yeah. Barrick gold have taken 2. 5 billion out of our cost structure and its a very different entity today than it was when stock was trading at 3 times book valley 12 years ago. Maybe ill follow up with you afterwards and well be bringing you guys many more details from this afternoon later today and tomorrow. Thanks so much to jeff osher. Back to you, kelly and billy. Heres whats happening at this hour. Floridas governor rick scott says that state could be facing its biggest evacuation ever, because Hurricane Matthew is threatening almost the entire Atlantic Coast of florida. American airlines cancelling all flights arriving at miami beach, ft. Lauderdale on flights after 4 00 p. M. Taliban and Afghan Forces continue to battle. Before the taliban were beaten back by Afghan Forces with the help of u. S. Airstrikes. Safety regulators investigating complaints that side airbags on some Nissan Versas can inflate if the driver or passenger doors are shut too hard. The recall covers about 155,000 cars from the 2012 model year. And the first jet pack flight in the uk took off today. There he goes. A former australian commercial pilot, an inventor of the jb10 jet pack reached 400 feet in flight. That would help with london traffic, i would think. Bill, you need that coming in from new jersey. Youre going to get to la guardia tonight. We all could use that at various times. It looks beautiful, actually. Nice, slow ride. Thank you very much. See you later, sue. Although you would get helmet hair. We couldnt have that. 20 minutes left in the trading session. The dow up 120 points. We have a leading trader telling us what hes watching. A major force could be a bid against twitter. What are the odds an actual deal here gets done . Well, our very own jim cramer just spoke to sales force ceo about it and hell tell us in a few moments. We enable you to reach global marts and drive forward with broader possibilities. Cme group how the world advances. Then smash it into a tree. Your Insurance Company raises your rates. Maybe you shouldve done more research on them. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Just one of the many features that comes standard with our base policy. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Trading session with the dow up 120 points right now. Im on the floor of the Stock Exchange with matt cheslok. Got our bounce here. Do you believe this . Careful what we wish for, you know. Were looking for fridays jobs number. If theyre too strong, maybe the feds will have to do something more a little earlier than we anticipate. Were starting to see all fed governors come out and say, we need a raise, we need a raise, we need a raise. In fact, yields are going up, and now we get a rally in stocks. Is the market becoming accustomed to that idea . We tested it numerous times. We are accepting of the fact the rates are going higher. We know were getting one. Now do we get it in november as a surprise . The market wont like that. Or do we get it in december when we see more of whats going on . We had oil up. Oil has been a major mover in this market. Rising rates are good for financials. Theyre the two strongest segments of this market today. So do you like this market here . I dont know if it breaks out by any means, but i think weve been in a nice range. Well buy these dips and sell these valleys. Friday may be the indicator. If this number is that good, the fed may be forced and the market is not going to like that at all. Well see. Thanks, matt. Sara . 20 minutes to go here, bill, before the closing bell. We are still looking at a rally on wall street in three sessions. The dow is higher by 125, the s p half a percentage point and the nasdaq up half a percent as well. The fbi has arrested an nsa contractor for stealing and possibly leaking highly classified computer codes designed to help the u. S. In cyber warfare. Were joined by a Network Security pro next to discuss what happens now. And is sales force actually preparing a bid for twitter . Those stocks are on the move. We just spoke to mad moneys jim cramer about that possible deal, and jim will be joining us in a moment with the highlights. And thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Steve, other than making im here atme move stuff,rade trader offices. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. Some big news breaking earlier this afternoon regarding National Security. The department of justice announcing the fbi recently arrested an nsa contractor who is accused of stealing classified materials. The man worked for booz allen, the same place Edward Snowden worked for. The material the man is accused of taking is called source code, which was meant to hack into governments like china and north korea. Senator john carlin was on power lunch and he spoke about this recent arrest. This was done intentionally, and when youre a government employee, you swear an oath to protect information, knowing the damage that the disclosure of sensitive sources and methods can do to our ability to protect ourselves against all sorts of foreign threats. So we take this type of case very seriously. Joining us right now from the cyber summit, David Kennedy is ceo of trusted sec. He himself is an employee of the nsa. Howard martin, is that the suspects name . Thats right. What do we know about him, and do we have a notion of why he was stealing this . He didnt seem to have the same kind of political motivations that Edward Snowden did, right . We actually see a long lineage of this happening all the way dating back to world war ii where you had folks who would defect to other countries, such as russia and china, to sell these secrets. These type of tools that are used to infiltrate and attack other countries are very valuable to this country, so you can get millions and millions of dollars just by selling these. I dont know if thats the motive, but its definitely an enticing one when money is tied to it directly. Were there actions taken because of Edward Snowden, and if not, how is this happening again . These tools are designed to infiltrate some of the most sophisticated security systems, so having access to nsa secrets is very damaging because if a contractor from booz allen is able to get these, who knows how many other contractors are out there . I was talking to matt nelson about how big this could be in a global perspective, around the damage it can do and the tools they can use. This looks like its either from the 2013 or 2014 time frame, and it went this long without being detected. Thats a pretty big gap in security from the nsa. We ask the same questions every time this happens, after the Edward Snowden incident every time. When we talk about this fellow martin, maybe there is just a financial incentive, as youre pointing out here. You know, we have to rethink who has access to this information and how valuable it is. How does booz allen get all this in material . What youre seeing is the problem the military has right now is they have Cyber Command and all these different areas, and they have trouble maintaining talent because we dont pay as much as the private sector. So they go to booz allen and other organizations that provide these types of services where they can pay these people and go through government contract. When i was in the military, i had a high level of government clearance. I never would have thought to do this, but i was very compartmentallized in what i could see. The way of protecting this information is a little bit looser. You saw it happen with manning, the army soldier that was able to release confidential information to wikileaks. Edward snowden had success out in hawaii. There are probably other contractors and other pieces of data that weve leaked that we have no idea of right now thats out there. We did get a statement from booz allen as a result of all this. Heres what they said. When booz allen learned of the arrest of one of their employees by the fbi, we immediately reached out to the authorities to offer our total cooperation in their investigation, and we fired the employee. We continue to cooperate fully with the government on its investigation into this serious matter. This man hacked into source code. Can you tell us who has it and what its worth . It how the nsa performs objectives or targets around the world. If i want to hack into china, i have a particular source code i can run thats very, very secret. Its been developed and it costs a lot of money, researchers and things like that, to go and build. Thats how we break in and steal intelligence on military capabilities. Think of it as equivalent to a missile or Something Like that that we can use for military capabilities. Its very, very sensitive, its very, very secret and its the last thing you want to have ever, ever, ever be exposed to other government agencies. It puts everyone at risk. How lovely. David, thank you. Appreciate your insights today. Thank you so much. Appreciate you having me on. David kennedy used to be with the nsa now the ceo of trusted sec. Watch for twitter to Start Fielding bids this week. Our own jim cramer sat with mark benioff, who is reportedly just one of the executives for twitter. When it comes to twitter, you have to look at it like this. Number one, we look at everything. You look at linkedin. We look at everything. You name it, we look at it. We have to go deep on everything. We have to understand what is possible for our shareholders, what isnt . But in the scheme of things, if you look back at my track record as a ceo, i think youll find that while i look at a lot of things, i actually pass on most things. Well, jim joins us now from san francisco, and mark considers twitter, he told you, its an unpolished diamond or jewel or Something Like that. Do you think its a good fit . Hes been on a binge this year buying all kinds of companies. Does twitter fit the prototype for them . Well, this one probably around 29. It would be 20 billion and it does not fit the prototype. He played ropeadope with me. I dont know how many times i could ask him the same question without realizing, hes going to give me a mohammad ali answer and i dont want to be on the canvas. This guy is interested in buying it not for what it is but for what it might be. Mark benioff has a vision than the guys who actually run it. Figure out how to get more people on, take other people off it who is running the company right now, restarting the growth and at the same time not getting in the way of his production of doing 10 to 20 billion over the time frame that it might take to literally fix this twitter. Hes not giving me a no, hes not giving me a yes, and i have to tell you, i think hes very interested at a price. Well, the price is going up by the minute every time we speak here, jim. Twitter shares up by about 6 right now. It was important to watch shares during your interview. They popped off the lows of the day down at 7 . I just wondered if they were trying to play it down at all because theyve been getting hammered on these reports. I think a lot of whats going on is twitter, when it reports, is going to go down very big. I think the company has no growth. It hasnt spent to be able to get any growth. It talks a big game about the nfl or whatever the heck its talking about these days, but its not growing. So mark will be buying a nogrowth asset whatsoever and marrying it with a company that has tremendous growth. It would slow the growth down, and what does that mean . The growth stock owners, the big mutual funds would sell, sell, sell. If it sells, sells, sells, just sthoot down and add it right here, right now. He didnt take the bait. Why didnt he take the bait . Because i think he wants to do the deal, he envisions twitter what he wants it to be. But right now . Sigh nara when he puts this a little differently. Do you think theres other companies that sell better than twitter . The google shares are quite flat now, actually. If you look at what hes buying whether it be Artificial Intelligence, whether it be the Einstein Program hes unveiling, all of these are about mining data. What is the biggest chunk of data out there not being used . I think he would tell you its twitter and the twitter feed. But remember, mark does not look at the company and say, wow, all these guys are kurting each other and fighting; i dont know. There could be billions of people who feel like facebook is taking away all the equity. Facebook, amazon, alphabet. Thats all you hear about here. The only one in the game would be twitter. If you buy twitter, its like buying an nfl franchise thats a new franchise with no players, except youre going to lose a couple years and then be able to make the plaufyoffs. Mark is not a loser, but its the only game left thats social, thats mobile, thats Artificial Intelligence and be the. Good stuff. Good to see you, jim. Thanks. Appreciate it. With a football remps and everything. Be sure to catch. Mark beioff. The dow up 112 points . Do you think the run in utilities is over. Our next guest says think again. He makes the case for owning them, on next with closing bell. The dow coming back up, 147, and we were at 156 at the peak there. Joining us, Pete Steve Kroll from crespi hartd. We think the safer names are going to play. Were also thinking under 2 for probably two years because inflation is very rampant out there in a lot of industries. I would say conventional wisdom would probably say the opposite, that weve had low rates the last few years, and groups like utilities are still overly expensive and in bubblelike territory because Interest Rates are so low, so theyre going to go up. Thats 100 right, and when we came out here a year ago, two years ago, three years ago with bill, we said the rates will stay low. The point is if you look at energy, you look at retail, you look at various industries, farm, brokerage sbis, Money Management business, there is deflation out there, so we just think that we want the rate in a cloud of dust. You think this is a fed rate again . The fed has been talking very tough, and i think theyll do something in december. We remember when that he did the last time in december. Not much. This is the top end of the range in rates and probably the market short term. Thanks, steve. Steve kroll joining us. As we head to the close of the dow at 102 points, well have the closing countdown in just a moment. More on the story developing this afternoon. An nsa contractor arrested on suspicion of stealing code used to break into other countries computer systems. Youre watching closing bell snoochlt you both have a perfect driving record. Until one of you clips a food truck. Then your rates go through the roof. Perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you twentyfour seven. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Liberty stands with you™. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where inveors can investigate aninvest in vests. Or n in vests. Sign up at etrade. Com and get up to six hundred dollars. All right, about 90 second with the dow up 113 points. I was very ambitious with what i was going to show, so lets see what we can get in here. Lets review this week so far as we begin the Fourth Quarter the last four days. The 10year yield, were at 171. And this is the source of a lot of movement here. Bank stocks hitting some new highs today, Interest Rate sense activities pressure. Even though the dollar has been stronger here, weve been closer to 50. We hit 49. 95 today. Ag hitting 15year highs. The price of gold has moved lower. Thats reacting in part to the stronger dollar here. Then the stock market today, we get this bounce after two down days with the dow up 114 points. Again, thats from the last three trading sessions. Put up, for example, bank stocks or energy stocks. I mentioned eog. We got the smaller companies. We have bank stocks like sun trust, regions financial and zion at 52week highs. Havent seen that in a long, long time. And finally those Interest Rate stocks you and i keep talking about, the utilities in the telecom down today. The closing bell at the midboard at the nasdaq. Stay tuned for more in just a moment. Welcome to the closing bell. Im sara keeisen in for sara kelly. Without closing up 10 points. S p up nine, the nasdaq up about half a percent. The small caps actually doing better. Financials, energy and industrials lead the way higher. Those great sensitive telecom and Consumer Staples lag. Young trading lower by its earnings support. Well bring you those. And then a former contractor for the nsa has been arrested for possible theft of highly classified computer codes. Well bring you the latest on that developing story from our own Cambridge Cyber Security Summit coming up. First lets talk about this rally. Joining us for the hour today n cnbc commentator mike benpoli, and lisa kopp from u. S. Bank. Mike, we see a selloff in bonds and a pretty decent cyclical rally in stocks. Last week we went down on that, so we thought maybe bond yields and stock prices were going in the same direction. I think a few things are going on. We have more evidence of a little bit of a september bounce in the Economic Data with the services ism. We definitely got another turn of the screw saying stocks can be okay with that and a rise in bond deals if it all seems to be happening for the right reasons. But were still in this range. I dont necessarily see this as a decisive move. Were still trapped where weve been for 11 weeks. Also heavily shortage stocks popping, a lot of noise out there today, so a lot of reasons for stocks to be up on the day and higher yields did not stand in the way of it. Lisa, what do you make of this, the yields going higher with stocks starting to move higher as well . Is the market saying it could accept a rate increase here in the near term . We are actually feeling positive similar to mike as well, even though there is, we believe, the base case for a rate increase in december. We think actually the he cequit market as a good case to possibly climb higher. The reasons for that is the numbers come in good on the economic side. There are reasonable assumptions you can make on the bottom upside for companies continuing to bring in some good earnings delivery through the end of the year. And at the end of the day, the Interest Rate outlook overall and inflation outlook remains restrained. So there is plenty of support for that equity market to continue to grind higher. Im glad she brought up earnings, mike, because we are on the brink of another session season. Where are the analyst estimates and how much is baked into the market since its run up now at this point . Coming into the week, s p 500 earnings for the Third Quarter are supposed to be down 2. 1 year after year. Whats interesting about that is one of two things. Estimates were cut over the course of a quarter less than normal, so maybe that means the companies are not maybe seeing things deteriorate as much. Also the average beat the typical beat rate of 30 . That gifves you a shot in Third Quarter. But i think its the Fourth Quarter everyone is keying off on and sales start to recover. To me its going to be a sector story. But i do think to the second part of your question, sara, i actually think if we had big down surprises to earnings, that is certainly not expected. Steve grasso has closed the books on this wednesday. What did you make of the rally today . I think without oil this rally does not take place. If you look at that correlated versus inverse correlation between the s p and oil, its correlated right now. If we dont have strength behind oil, the market goes no place right now. Opec, i said it to you yesterday, opec has taken the place of the fed in the eyes of many of the investors. Weve looked at guys who think this is a technical bounce, maybe people on the sidelines. Look at ism. Better. Weve had ism take this market down a month ago, so now we have to see is ism an anomaly or retail sales better, Industrial Production better, but we have to wait a week for that. We also have to wait possibly after the september numbers because august was weak and september is now bouncing back, and we wonder if numbers like today on services are going to be the new trend, or was it just a correction in what we saw last month . Were generally feeling good about where Economic Indicators are headed. If you look at many of the leading indicators such as wages or unemployment or consumer confidence, they remain steady. While there are certainly headwinds and risks we want to remain aware of, between that and our expectation, that company earning should come through with a good, modest, steady trend of growth. We believe well be okay coming into the end of the year. All right, lisa. Thank you for joining us. Appreciate your thoughts on todays market action. Meanwhile, new questions are being raised about the price medicaid has been paying for those epepipens. Meg is going to update us. This is the characterization under medicaid of whether its a generic drug or an innovative drug. Mylan has been charged by a number of congress men that it should be charged as an innovative drug which would pay 20 rather than 13 as a generic drug. Medicaid confirms they have been overcharging. This is a letter from medicare and medicaid services. In this letter they say cms cant comment on the total amount of rebates owed to mylan for this classification. The cms confirmed it reached out to mylan several times saying the classification was incorrect. Mylan trading basically flat right now, but this has been a continuing concern. It shows how politically charged this issue continues to be. The biotech index is down 10 , mylan down even more. Since Hillary Clinton had bad words to say about the whole industry, to put it politely more than a year ago. Exactly. It bounced around, but it had been coming back, and i think mylan was the new thing that said, why are we focused on this . Lets go invest. Theres too many other spots where we can put our money to work versus having every other night there be an adverse headline to the whole sector as a whole. And then you have wells fargo there. So its financials, its biotech. Both are capable of rally but why . You know what i find interesting, though, its an adjacent story which is the cvss of the world, those stocks have been weak. Maybe they got caught up in that defensive sector trade, but i also think this is bringing attention on that entire food trade of how people get paid for drugs and all the reimbursement. They are getting some of the blame. Lets move on to another story. Twitter shares popping today that the company will be fielding offers as early as this week. Lets talk about alphabet is the best thing on twitter. Mark benioff was just on our air saying sales force is going to be very aggressive. They really want this company. But you think google is the better fit here . Why . I think you need to look at two things. Number one, you need to think who can do the most with it, and number two, who can pay the most for it . I think google, or alphabet, as its known now, can do it more successfully. We published a note yesterday outlining six reasons why we think google is the likely buyer. One is clearly data, one is that realtime information that google doesnt have or has a little bit of which they can dramatically improve with twitter, and last but not least, valuation. Goog orlanle or alphabet could 4 or more and it would still turn into a nice acquisition because they can take the costs out that no other player can do. You said the 30 billion big price tag for twitter would not be a percentage of alphabet or anything else, but is there a sense a company has the appetite to be a buyer, even of a company that size . The biggest acquisition theyve made two acquisitions, really. The biggest was youtube, the other was double click, and both acquisitions was 2 or 3 billion and they ended up performing very well for them. They have 700 billion in the bank. They have 30 billion here in the United States. They dont need to repatriate any of it. They checked so many boxes that to us it makes no sense for anybody else to buy it other than alphabet, and they certainly can. Steve grasso, thanks for being here. When you look at twitter, what are the chances it behooves them to have a whole litany of corporations that can buy them and companies that could be in this m and a mix. What is the chances there is no buyer . Im hoping there is, but what are the chances there is no buyer for twitter . For your sake, im hoping there is also, because fundamentally, just based on the p and l, the stocks were overvalued, clearly. There was already a builtin premium. Jack dorsey has been at the helm for 12 months. They havent done a whole lot. Q3 results will be coming out over the next two or three weeks. We dont think youll sigh lee out of him. Theyve tried things in this streaming context. I dont think its necessary to move the needle even though its a strategic move on their part. I think shareholders are going to start making noise if two or three weeks go by and we havent really seen any bids emergineme. Then youll have activists to start take a more serious look at this. Mark beniotf, or else that was just the biggest bluf weve seen out there. Zp zptz. Steve areno, we will see you next hour, i take it. Your journey is not finished. Im going to hit the subway. My favorite part of the day. Abhey lamba calling securities a disaster of the day. A hot story and a hot stock with twitter pushing up another 5 . Yum earnings. Well look at an analysis of those earnings to find out how taco bells breakfast offering in the chinese operations are impacting the bottom line. Plus, black rock is cutting fees for a dozen of its exchangetraded funds. Will that spark a fee fight in the Assets Management industry . Golden sachs Asset Management business just had the closing bell. Well join you on that in just a moment. Plus well have details for you on the nsf contractor allegedly leaking secrets, and the National Security agency which employed alex snowden. Happen all by itself. It needs to be earned every day. Using wellness to keep away illness. And believing a single life can be made better by millions of others. As a Health Services and Innovation Company optum powers modern healthcare by connecting every part of it. So while the world keeps searching for healthier were here to make healthier happen. Blackrock announcing its cutting fees on its etf. A move that could be more competitive with vanguard and state street. Certainly investors will take advantage of lower fees. Were joined by the blackrock ceo. Apparently sara remembers that day. It was just over a year ago that we launched our product. Into a very competitive market. Everybody has etfs now, right . It is a very competitive market and obviously its evolved over the almost last 25 years. Really over the last 10 years, it started to evolve with players like ourselves, Goldman Sachs Asset Management, who wanted to offer the etf wrapper, if you will, like any other product. Your etfs are what would be called smart data, fun factors or some other weighing etiology that is trying to perform. That market is also a quarter of a trillion dollars. How do you stand out there . Indeed, mike, in fact, thats an area weve sign leen a lot o growth in just the last year. Weve seen over a billion and a half of inflows just in our products over the last year. Really, i think theres two ways. One, the strategies have to be able to stand on their own. You have to be known for this and at gsam its in our cocor core strength. The oert is cost. We took cost out of the equation by offering our lineup at lower prices. That really takes it out of the equation of the investor of deciding on the strategy and not worrying about what the cost is. What are you doing about the fees in responding to blackrocks move . We came into the industry with what we think is very competitive fees. When you look at the average of the smart beta category, 38 basis points. Extremely competitive as well as price lower than some of the other beta offerings out there. When you look at International Offerings at 25 basis points versus an average of 58 basis points, we think were priced right for the market already in a beta safe space. That said, services as a whole benefits the end ininvestor. When you call it smart data, is that going to go on zero . Probably not zero. Will it come very close to zero . Sure, as you think about Capital Markets as a whole, its really that long, slow road to zero when you apply technology, particularly the technology we have today not just from an investment management, but the training that goes into essentially that mix. I dont think well get to zero, but i do think well continue to see pressure there. Steve, good to see you again. Lets all reconvene in a year, what do you say . Its a date, absolutely. Steve sachs. Weve those earnings now. Susan has been poring over them. How do they look . A miss and sales in china not good. Lets start with eps earnings per share. 1. 09 per quarter. They were looking for 1. 10. The market was looking for 6 billion, they had 3. 4. In china we know theyre splitting in two. They will trade as two separate listed companies on november 1st, but as for samestore sales, we saw them come down for a market that was looking for 4. 5 . Those i spoke to say these are the last earnings going into the split, so it probably wont make that big of a difference, have that much of an impact, so what were watching for is the analysts meeting next week. Keeping in mind the context of this stock which has really started to run up into the planned split. Greg in his comments said he was pleased with kfc taco bell in the u. S. , and in china they exceeded their expectations as well, although not so much for investors. It didnt exceed the street for sales, but its based on exactly whether people think the spinoff in china is going to get a higher valuation or not. They already have an investor in that china business. The stock is actually a little bit off its highs. Not terribly much off its highs given it gets wrapped up in that whole stable quality company. They do mention this International Court ruling during the quarter, claims regarding the South China Sea which triggered a series of pro sentiment, and without that, we would have seen a quarter of poor sales growth in china. An ansogynous development. Tim kaine and mark pence went head to head last night in that first and only Vice President ial debate. When we come back, well discuss which one had the upper hand and if that could have any impact on who voters vote for as the next president. Edward snowden had leaked confidential information. And now another employee is being charged with stealing critical data. This new arrest coming up on closing bell. Last nights first and only Vice President ial debate between tim kaine and mike pence certainly had plenty of fireworks, but will it have any impact on the november election . John harwood joins us with some of the highlights and people have been debating that question all day long, john. What do you think . Well, in the short term, the effect of the debate was to calm republicans who had been seeing donald trump go backwards ever since his first debate with Hillary Clinton over a week ago, and with the subsequent controversies he fueled after that, so the fact that mike pence came out and gave a solid, reassuring performance was the kind of thing republicans wanted to see. One of the things mike pence did was he didnt really engage with tim kaine on his repeated attacks on the controversial things tim kaine had said about individuals, but he did try to recast in ways more congenial to conservatives some of the statements that donald trump had made on policy issues like russia. Take a listen. When donald trump and i observe that, as i said, in syria, iran and ukraine that the small and bullying leader of russia has been stronger on the world stage than this administration, thats stating painful facts. Thats not an endorsement of vladimir putin, thats an indictment of the weak and feckless leadership of Hillary Clinton and barack obama. Now, people have been wondering how donald trump was going to react to that debate. First of all, the fact that mike pence did pass up some opportunities to defend donald trump and also the fact that the headlines say today pence won and a week ago they said trump lost. One of Donald Trumps advisers said pence won overall but lost with trump. However, donald trump was out on the trail today and he was bragging about his running mate. Mike pence did an incredible job, and im getting a lot of credit because thats really my socalled first choice, my first socalled hire, as we would say in las vegas. And i tell you, hes a good one. He was phenomenal. Its notable that donald trump said there, im getting a lot of credit for the mike pence performance, but the bottom line question we started with is this going to fundamentally change the race . I dont think that is the case. Hillary clinton has a lead, maybe three, four, five points nationally. Shes winning in most of the battleground states, and the really crucial matter will come on sunday night in st. Louis when donald trump gets a Second Chance at Hillary Clinton. There will be one more on the 19th of october, but he needs to make some head way personally, donald trump does, this weekend, guys. It appeared that mike pence was trying to use the same strategy that hillary did in the first debate where you remain unflappable. Dont play into the attacks that are coming your way. What do we make, though, of tim kaine and the repeated interruptions and the attacks he was making throughout . Obviously by design, but what was he trying to achieve there, do you think . What he was trying to do was put in front of a large audience, and we think more than 40 Million People watch this, as many of those controversial statements that donald trump has made as possible. Try to get tim kaine to defend them, or if he was not going to defend them, be able to say i noticed you didnt defend them. He did that, its just that in doing so, he didnt look all that great. He didnt look comfortable on the attack. I suspect the fact that he continued to jump in made some viewers uncomfortable, but i have got to say that some democratic strategists have said, yes, in the short term, mike pence had a victory last night, but tim kaines performance is going to wear well as we point up his not defending donald trump and saying things that werent true. In other words, when tim kaine would say, donald trump said x, mike pence would say, are you kidding me . He wouldnt say that. But in many cases he did. In fact, the Clinton Campaign has a video out about that today. All right. It certainly had more fireworks, i think, than people expected. Thats right. Thanks, john. John harwood in washington. Time for a news update with sue herrera. Hi, bill. In a statement to the white house rose garden, president obama called the Climate Change accord an historic day in the fight against Climate Change. Today the world meets the moment. And if we follow through on the commitments this Paris Agreement embodies, history may well judge it as a turning point for our planet. Over a Million People are set to evacuate South Carolina in the next few days in preparation for Hurricane Matthew. More than 300 buses left from greenville heading to charleston to aid in the evacuation efforts along the coast. Donald trump touring a Christian School in las vegas. He was serenaded by children as he entered the International Christian academy before visiting a first grade classroom where he joined the students in a bible pledge. Tom brady returning to practice with the new England Patriots after serving his fourgame suspension stemming from the deflategate scandal. The patriots play the Cleveland Browns on sunday in cleveland. Thats the news update this hour. Sara and bill, back to you. I think the patriots have to be relieved they are 31 during his absence. And in a really resounding fashion. What, they dont need him as much as they thought they did . I dont think so. I think theyll be really glad to see him on the gridiron. There is a collective sigh of relief in boston that hes back now, thats for sure. Jump in any time on that. I did. With all my football knowledge and skills. Well have more on the nsa contractor who has been charged with stealing government secrets and the agencies and what they can do to ensure it doesnt happen again. Speaking of cyber security, the ceo of Southern Company will be joining us to tell us how much of a threat cyber hacking is to our Nations Energy structure. Thats a big question as well, when closing bell returns. Enis really built into theat foundation of the company. Whole foods market is engaged with pg e on many levels, to really reduce energy and reduce our environmental footprint. For a customer like whole foods, saving energy means helping our environment, and we can be a part of that. Helping Customers Save Energy is a very important part of what pg e does. We can pass those savings on to the environment, the business, and the community. Pg e really is an expert in saving energy, and that partnership is extremely exciting. Together, were building a better california. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. I am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound i wont. The experts at cdw brought a global outerwear manufacturer, allowing them to handle the recent popularity boom in fanny packs. Its pretty fly. Unless being 90s is your thing. Well, cdw and hpe services gave them the flexibility they needed to scale up their scale up their cloud resources, making sure supply meets demand. Poser [ classic ringtone ] whats crackalackin . Hey, did you remember to set the vcr . Increased flexibiilty by hpe services. I. T. Orchestration by cdw. Lets look at how we finished the stocks. The dow up 112 points today, the s p up almost 10 and the nasdaq up 26 points to 5316. An nsa contractor has been arrested for stealing highly classified computer codes. Like Edward Snowden, he worked for booz allen. Eamon javers is here with more information. What can you tell us . Reporter the New York Times was a first with the story for us. Here in cambridge, we happen to be surrounded by nsa officials, fbi officials and a lot of folks from the Senior Department of justice as well. This nsa contractors name is Harold Thomas martin iii, and hes 351 years old living in a suburb of washington, d. C. He was arrested back in august. He worked at booz allen and hamilton, a contractor in the area. What officials said they found on his person, on his property, six sensitive topsecret documents among those that were recovered. Broader material also recovered, but thats what hes charged with right now. Officials are also telling us if convicted, martin faces up to 10 years in prison for the theft of government property. As you mentioned, booz allen is also where Edward Snowden worked, so not a good day for booz allen in terms of the publicity around this. Heres what booz allen is saying now. They said when they learned of the arrest of one of its employees by the fbi, we immediately reached out to the authorities to offer our total cooperation in their investigation. And we fired the employee. We continue to cooperate fullly with the government on its investigation into this serious matter. There is a lot we dont know about the story, including why mr. Martin took this material, brought it back to his house, and what, if anything, he intended to do with it. Was martin allegedly in cahoots with an overseas intelligence operation . Did he intend to sell it . Was this a wikileaks sale . What we know now is that another nsa contractor has been charged with taking these documents and has been arrested. Back to you. You know what i dont understand, and i think we have a minute here with you. This happened in august. Were talking as if he was just arrested this afternoon and we have to figure out what this is all about. Theyve been working on this for two months and they still dont know what his intentions were and what he did with the information . And was it all secret . We still dont know. The documents talking to officials here, i get a sense that there is more to the story that we are going to learn over the coming days and weeks. I dont know what exactly that more is, but the documents were filed under seal, which means that they were only unsealed today. Thats why the story is becoming public today. Presumably between the end of august when this arrest was made and today, there have been other developments that are not reflected in these documents that we dont know about. You would assume that u. S. Authorities are trying to get this person to cooperate with them, talk to them, share information with them about whoever he was working for, whatever he intended to do, and at this point now, these documents are being made public, he is being charged, and that puts a lot of legal pressure on him to go ahead and cooperate and maybe see what he can do for himself to lower that potential 10year sentence. Well await more details, especially on that motive, as you say. Eamon javers, thank you. Another key topic at that cyber summit stowed. Whats being done to keep the Energy Threat from happening . Numerous warnings on our countrys power plants. You operate a number of them, tom. Have you been fielding Cyber Attacks . How much are they threatened . Oh, sure. Hey, bill and sara, great to be with you again. The entire industrial infrastructure, especially for critical infrastructure, is under attack every day relentlessly. We should just accept that. I would argue that the industry has been called out by a variety of reports even to president obama as one of the best prepared in finance. Its not just power plants. I would argue the nations electric network, our nervous system, if you will, is one of the most important assets that we have to protect. Look, you can never say with center that youre safe. I would say, however, that were as well protected as we reasonably can be. And i think one of the most important things we have to do right now is to understand the relationship between likelihood and magnitude and develop a sense of priority. Well, the electric grid gets a lot of credit for being a wonder of engineering and so forth, one of the great developments of the 20th century. But its aging now. Its getting old. It needs updating badly. How much of a target and a soft target is it because it is an aging asset . Yeah, bill, i think thats that is a mischaracterization. I think in general, the nations infrastructure, particularly transmission system, one of our former energy secretaries, not eric moniz, put that out there, that we have an ancient grid system. I think hes dead wrong. I think our nation has been blessed with the infrastructure that arguably around the world is the envy of an energy infrastructure. But heres one of the points today that is so interesting with this news from nsa, and that is whats in house. Look, we know assets. 87 of the critical assets in america are owned by the private sector. Were doing a darn good job of protecting those. But its not just whats, its hows. In this whole notion of insider threats, cyber health, how people behave is really important in linking up a formidable kind of Cyber Protection regime. Tom, whats the nature, do you expect, of any threats that might come in . In other words, is it just going to be the equivalent of a denial of service type thing, in other words, just shut the lights off in a certain area, or is it meant to do more damage . Look, its way beyond that, and this kind of attack regime continues to change, so its one of these ideas of you know le we gretsky saying you have to skate to the puck, we have to find where this is and try to get ahead of it. Its a very daunting task, but i think were working very hard and working with government response and an integrated response. When we think about electricity, we need to integrate a response with finance, telecom, transportation, water and others. Tom, before we let you go, the other threat thats facing the industry right now, and indeed, much of the east coast is Hurricane Matthew. Were not sure exactly how much of a magnitude and impact its going to have, but what are you guys do to get ready for that right now . Sure. I just got off a phone call at 4 00 this afternoon. Its our National Threat response activity. We have activated a Mutual Assistance Network that has been in place for years, and i talked personally with the ceo of the utility along the east coast there of florida, nextera, and i think were doing all the right thing. Were marshaling resources, were positioning those resources before the disaster happens, and then i think well be well positioned to take advantage of any damage in the restoration activity in a superb way. I really feel confident about our ability to handle this storm. Its going to be tough, but thats when were at our best. Okay, tom, thank you. Great to be with you. Tom fanning joining us from cambridge, mass. Moving into a Lower Manhattan neighborhood, but dont expect the typical target experience when it comes to shopping. Well head live to the store to show you what we mean, next. 750,000. Thats how much the highest paid tv dramatic actress makes per episode and its not Network Television were talking about. Coming up, why netflix is digging deep into its pockets to attract top talent. And youll never guess who were talking about. I was surprised. Youre watching cnbc, first in business worldwide. Cdw brought i. T. Orchestration to printing, dramatically increasing print security with enterprise printers by hp. Which is great, unless youre a corporate spy. Unsecured printing makes your network vulnerable. Enterprise printers by hp help prevent costly Security Breaches that can compromise your network and reputation. So im stuck spying the Old Fashioned way. Hey. Im not spying. Secure printing by hp. I. T. Orchestration by cdw. If youre on medicare, remember, the open Enrollment Period is here. The time to choose your Medicare Coverage begins october 15th and ends december 7th. So call unitedhealthcare to enroll. In a plan that could give you the benefits and stability youre looking for, an aarp medicarecomplete plan insured through unitedhealthcare. What makes it complete . It can combine medicare parts a and b, which is your hospital and doctor coverage with part d Prescription Drug coverage, and more, all in one simple plan for a low monthly premium or in some areas, no plan premium at all. An aarp medicarecomplete plan offers you benefits like an annual physical, preventive screenings and most immunizations all for a 0 copay. Youll also have access to a local network of doctors and much more. You can get routine vision and hearing coverage, a fitness membership to help you stay active, and worldwide emergency care. 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A smaller than normal location is opening downtown in the tribeca area, hoping it will attract the locals, although i think i would want the big box store. Courtney reagan is there. How is it different . If you want the big one, its on the east side, so you can go there. But this is one of the flexformat stores, bringing the number to 27. They plan to add 20 more of these, at least, by 2018. So this store is about a third the size of a normal target. At 45,000 square feet covering two floors. The retailer says its not just downsized but its customized to fit the urban shoppers frequenting the area, families and working professionals. There is apparel, home goods, electronics and even a cvs. There is also a cafe and online pickup at the front of the store for quick convenience. In august, youll remember, target posted the weakest comparable sales in nine quarters and target Ceo Brian Cornell pointed to the ciprofloxac flexforce stores as a driver. On the most recent earnings call, cornell said the productivity on flexforce stores is higher than the Company Average and theyre meeting and exceeding company targets. Last year nine of targets new stores is flexformat. Its funny theyre building this flexformat as target is closing all 102 flexformat store locations. The difference there is target was traeattracting more of the l shoppers and theyre hoping to hit the more densely Populated Areas which probably makes more sense for that target cachet brand. I think its a good idea, the tailored inventory theyre putting out there, i think its a smart idea. Courtney, are they selling groceries there, because i know brian has made a focus of getting into food but thats been hurting them because of food deflation. Downstairs is where youll find grocery aisles and that does, of course, include beer. There is also a decent portion of baby care, even strollers, despite sort of the smaller footprint here making room for that, because there are a lot of families down here with a lot of new Housing Developments that you all might be familiar with down here. Its been a very busy opening day, thats for sure, and the assortment could continue to get curated as we see what the customers are looking for, what is here and potentially whats not if target needs to sort of fix that going forward. But today is just day one. Does it smell like popcorn . There was certainly the popcorn and the pretzels downstairs. We had some beyonce playing. We turned it down so we could hear this report, but its been a bit of a party here, thats for sure. The land of the fancy baby strollers. I think its a good idea there. Thank you, courtney, very much. Courtney reagan. Thats why god created suburbs. Netflix is working hard to break out of living rooms and onto the big screen. The streaming services signing its first longterm deal with a theater chain. What that could mean, coming up. All the big Bank Meetings in washington, d. C. All the heavy hitters in finance are there. Well be speaking with jim yong kim, Sergio Ermotti and chairman alan greenspan. All coverage starts tomorrow, 10 00 a. M. Eastern, squawk on the variety releasing its list of top paid tv talent. We love this stuff. Netflix actors claimed three of the top five spots in the drama category. And look at that. Lauren graham and Alexis Bledel of the not yet released gilmore girls, 750,000 an episode, beatinging out Peter Dinklage from the game of thrones. Plus, netflix signed this deal with luxury theatre chain ipic, releasing on the big screen the same day they appear on the streaming service. This has been tried before. It will be interesting to see if people actually go to the theatre to watch. A lot of times with niche movies where they want to have it for some purpose or another. The theatre chains dont like this, obviously. They try to preserve that exclusivity. To me, all this stuff kind of speaks to netflix being at least increasingly just another studio and distributor. In other words, theyre very much more like an hbo than like some unique animal, which means you have to pay in a similar way or better. Very good point. And they really need to watch their we keep saying, they need to watch their costs, but they just keep going oh up as we see here. Of course, they said at a conference last week, theyre going to work toward having half their programming be originals. So theyre going to have that high riskhigh reward as opposed to bidding on the open market. See if they can raise prices on the consumer to help pay for it. Our first look at the replacement Samsung Phone that began to overheat and smoke on a plane. This was the replacement. Our dierdre bosa has the update. Reporter what we do know is that it was a samsung device that began to pop and smoke on a plane. And that caused the evacuation of the flight in louisville. It was still on the ground. The owner of the phone sending us some pictures at nbc news. Showing what he says is a replacement galaxy note 7. That is, of course, the very phone that samsung has recalled, because of serious fire and burn concerns. And hazards. So this is the photo that youre looking at right now. Hes told nbc news that it began to smoke out of his pocket and he threw it on the plane. Arson investigators have confirmed that it was a samsung device. But heres where it becomes a little unclear. And we are waiting for more from samsung on this. But so far, the company is telling us that there is no evidence that this incident is related to the new note 7. So essentially its saying that it could have been a mold model of the note 7 not replaced by the recall. The company says theyre working with the authorities, and southwest. Southwest also wouldnt confirm the model to us. We will update you if we hear anything. This is a developing story. Guys, i want to mention, if it was, in fact, a replacement phone, a replacement galaxy note 7, samsungs reputation is going to take another big hit. Not only is it still dealing with the recall of 1 million of those original Samsung Galaxy 7 notes, but there has also been reports that its washing machines have been exploding as well. Back over to you. Thank you, dierdre. I can understand the phones having a battery from exploding, but a washing machine . I heard those reports too. Not a battery, clearly. Something else. Although i also an investor took a stake in samsung and basically said break this thing up. Not a great day. All right. If youre just joining us, young released earnings earlier this hour, the stock trading lower in the after hours session. One taco bell in canada is adding a major item to its menu. Where is that going . Well talk about that after this. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Taco bell itself thinking outside the bun. The fast food chain transforming one of its locations in chan dainto, get this, a onetime airbnb to celebrate the launch of the double dia which is a quesadilla with double the meat, of course. Of course. In case youre wondering, available for one lucky winner and Three Friends on october 17th. The company is already accepting entries and will announce the winner on october 11. This is just getting out of hand here. You know, the stunts are crazy. You have to think that how do we reach the millennials . Whats our core audience . And just going to throw it up against the wall. I dont know if you are calling them a winner if it they get to sleep it might be fun for a kids sleepover. Second prize is two nights. By the way, in case you missed it, yum brands missed by a penny on the bottom line, down 2 in the after hours. Mike and i will be here tomorrow, sara from the imf meetings could not be more excited in washington. My favorite place. Thank you for young us on closing bell. Fast money begins right now. Fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square, im melissa lee. Traders on the desk, pete najari najarian, steve grasso, guy adami. The bond market wreaks havoc on dividendpaying stocks. Four names not only surviving, but thriving in this rising rate environment. Plus, a Surprising Group of stocks that were left for dead last year, up more than 100 this year. One of our traders thinks theres more room to run. And oil closing in on 50 bucks a barrel. Any traders buying ene