Territory and the s p down 6 points at 1656, mandy. Lets talk more about the markets. Joining us now is our guest panel. Rick santelli who loves to jump in on every single topic. Lets start with you. Youre the lucky one next to me, right . Yes. The private bank. Yes. What are you saying to the private bank clients right now about the markets . Well, actually, we still like equities. We still think that the market is fairly priced. Its not cheap like it was a number of months. Valuations are reasonable. We think on a relative basis after the pullback over the course of august things have come back to what you think is a fair price . Off 3 , 3. 5 from the highs. Even after june after the initial taper conversation, we were down about 9 . Theres still actually relative to fixed income, relative to cash, closer to asset classes, we think a reasonable place to put money to work although volatility picks up in the fall with september and the news stories, the fed meeting. The german elections. A lot to digest. Rick, ben willis called this the war trade today as we saw the flight to gold may be a little bit of a dip in the 10year as a result and stocks lower. Do you see that, as well . I would think there could be a little bit of that going on and, you know, with the light volumes we have been talking about all day on cnbc, it is hard to extract what percentage is this, what percentage is that. But i also dont want to diminish the big data point that is are on the spongey side and the fact that early in the day maybe stocks were enamored were the idea of how it plays in to the taper. You know that song. But i think at the end of the day it made sense and i would also say for those that want to Pay Attention interest rates, if we stay here and close at a 278 or anything under 281 this is the lowest close in 6 trading sessions because last week we settle every day between 281 and 288. 288 being the high yield close of this move for a little over two years. Rebecca, i know you wear many hats and can talk everything but youre a hot shot on currencies. Since bill brought up the war trade, what would you be doing with the u. S. Dollar right now . Because we know in times of geo political unrest, not only gold but the u. S. Dollar is a safe haven. We have seen bonds benefit a little bit for that today and could have been light volumes and the weaker durable goods report but yields just break in. Yeah. Flows coming in to shortterm fixed income and the dollar tends to buoy dollar. If we were to see the geopolitical risks continue to heat up, you want to think about the dollar against some of the emerging market currencies, think about the yen which will tend to benefit of kerry trades being unwound and the swiss franc at the margin. Sorry to break you off here. Let me get to dominic on breaking news on jcpenney. Bill, mandy, this is breaking news. A source over at reuters says according to a source that bill ackman has again sold or is going to sell his entire stake in jc penney total roughly 39 million shares. Hes the single largest shareholder in jc penney and according to reuters and a source, selling the stake. Thats 39 million shares. The biggest shareholder, remember, was bill ackman. Those shares down 3 , 4 earlier. Down about 1 now autolow lows. Obviously, well watch for any new developments but bringing you those as soon as they become available to us. Down 5 in the afterhours and now 5. 25 and bill ackman said it was a mistake trying to replace ron johnson and all hes done to try to bring back the fortunes right now. What do you right now . Do you want to buy stocks here . What will you do here . Well, bill, this market is all about the taper right now. With earnings season largely behind us, the market is largely focused on the fed policy meeting next month and any news thats coming out is trading off of that so today was another example of opposite day where bad news is good news and the market largely pretty, you know, moving higher for the rest for the day until really you got the syrian news so were watching this very closely as part of our process and were taking a wait and see approach. We remain at the margins, slightly underweight stocks because of the risks entailed with the taper as well as with the earnings front as margins continue to remain fairly high in our view. I would like we had the breaking news of dominic back at headquarters about bill ack machb seackman selling his entire stake. Do you have a comment on that s . Not specifically on bill. For the retailer. I wouldnt say specific indications but the retail Sales Numbers have been soft. Back to School Spending is soft and the experiment with the company has not gone particularly well. So, its not shocking to see given bills prior comments the comments hes making around that story. Rebecca, could you buy it here . Its come down quite a bit here recently. Im a macroeconomist. Im not a stock picker and wont touch that one. One thing ill touch is u. S. Stocks more broadly, you know, here we are, we have had the last couple of weeks now where the u. S. Is underperforming. Europe, specifically. I think in a year like this where the s p has risen some 17 , we have to make sure we remember, this is a Global Investment landscape we have. We have been overweight europe basically the whole quarter and benefiting and had the jitters around the taper, some of the activist strategies and i think clients and investors out there just need to remember the u. S. Has had a great year. Im not sniffing at that but keep a global mindset. Are you worried about the consumer in the u. S. Right now . No, im not. The durable goods report was soft. Home sales report was soft. We have to keep an eye on that but the home sales trend i think is a longer term one. That has legs. We are seeing business and Consumer Confidence data continue to improve. Thats a good leading indicator. That wealth affect is alive and well. Im still biassed towards buying equities with a pullback in september and like the other guests on right now, we have a lot of event risk and i would rather sit on my hands for a few days or weeks and in the meantime keep a focus on europe. All right. Thank you, folks. Appreciate your thoughts on todays market action. Lets get back to bob with more on the chatter today and a lot of it was about syria. Wasnt it . It was. Late in the day, and primarily this was on very light volume, the market drops. Take a look at the screen and what happened today. Midday drop on very light volume. Secretary of state kerry saying that the use of chemical weapons in syria undeniable and the president is planning action and didnt say what that might be. And then earlier in the day, a disappointing durable goods report. Now the second disappointing economic report in a row after home sales disappointed on friday. This is the active trading in the market. See the drop . 3 05 today. Strange because secretary kerry spoke from 2 45 to 3 00. No response . He was on the air and then afterwards just a drop. Volumes are light. 110 million. Normally you can see in the etf, today i dont think we did 80 million shares. Bear that in mind. Take a look at the housing stocks. Theres stabilization going on here. We have seen a stabilization of all the Home Building stocks. Last week a lot of big analysts said this is the time to consider buying. We have seen stabilization in the last five or six trading days. Bio tech, amgen with a big move in the oncology space here. All the stocks to the upside. And finally, second little geoplitd call issue here. Potash stocks moved up as a big producer in the world arrested by the bell ruse government. The head of urocali. They announced they were going to break up the cartel. This implied prices were going to drop dramatically and i think the government, bill, of belarus not happy to lose a lot of money in potential revenues and some reports of 100 million on that. Hes now been arrested and charged with abuse of office in belarus. Keep an eye on that story. Back to you. Crazy stuff. Thank you, bob, very much. Back to the jc pen ney story. Bill ackman so involved in the management of that company has apparently sold his entire 39 million share stake in the company. The stock is down 3 off the lows now, mandy. But if hes already sold, you wonder why the markets going to sell right now. Absolutely. Too late. Of course, i think its worth saying this is not the first headline on this issue. Of course, bill ackman and the company have been in the headlines for a long time. Remember back august 13th, bill ackman stepped down from the board of directors. He is best known for using his ownership stake in Companies Like jcpenney to push for change. With this, its still struggling despite the pushing for change and everyone is for now wondering obviously on whether or not the retailer can indeed turn itself around and certainly watching this. Apparently rethinking that sell because it is coming well back. It is. It was down 5 and now 1. 5 . Well keep an eye on that. By the way, tomorrow the markets no doubt watching and listening to treasury secretary jack lew sitting down with our john harwood at 7 30 a. M. Eastern time. This will be his first interview since the announcement earlier today that the u. S. Will reach its debt limit in midoctober. So much to be discussed with secretary lew tomorrow morning. Could be market moving. Stay tuned for that coming up on cn cnbc. Lots more coming up here. Next, bill, is the housing recovery on shaky ground . And if it is, what is the real state of the economy . The market, of course, wants to know. The fed wants to know. We want the know. Well get some answers next. Also ahead, microsoft shares getting a boost from ceo steve balmer saying hes heading for the exit doors in 12 months. Would General Electric shares do the same . Well look at that coming up. And also, with costs spiraling out of control, former education secretary William Bennett says college may not pay off for some students. We have the changing face of college. It is all kicking off and youre watching cnbc. Clients are always learning more to make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and investment companies. Following the story of jcpenney. What do you have . We have at least a release coming from persian Square Capital and said that they on behalf of the Investment Funds which are the selling stockholders announced today that the underwritten offering of 39 well call it 39. 1 million shares of common stock by them, jc penney will not receive the proceeds of the sale of the 39. 1 million shares. The offering will be made under the registration statements filed with the s. E. C. Citigroup importantly here is acting as the sole book running manager and underwriter for this particular offering of stocks so a little bit more detail. Citigroup acting as sole manager of this sale of stock. The Pershing Square to sell in an underwritten deal by citigroup and bringing you more details but for right now thats what we know so far. Putting you on the spot here, dom. Theres a question on twit ear enthe newsroom. Just how unexpected was this or was there an element we were expecting this at some stage . There were expectations of this. Remember, in the past couple of weeks they said theyd follow windows, registration it is look to get rid of the shares and sign of this when bill resigned from the board himself. Of jc penney. It is not exactly the biggest development. There was some anticipation of this. Still its official and made a release to sell the shares in an underwritten deal where the book runner is citigroup, guys. Thank you for clarifying that. Its more nuanced than the early reported have us believe. He intends to sell or at least Pershing Square intends to sell. They have not sold the shares yet. No. It is fully underwritten by one bank and thats citigroup. Very good. Thanks. Of course, well try to get some more analysis on this as it becomes available. After snapping up properties in bulk, investors appetite for homes seems to have slowed down and showing to start up in home sales. What does that mean . Diana olick is digging deeper. Reporter they pushed pritss higher, faster than anyone expected. Now we are starting to see that pulback. Take a look if you will. Investors made up just 16 of home buyers in july. That according to the realtors. Down from 22 in february. And 25 in 2009. Now, in some of the hardest hit markets, investors made up more than half of the buyers in the worst of the foreclosure crisis. Now that is changing. We definitely see the investor market cooling so on one hand you had wall street early in the season buying as many homes as they possibly could and then some point becoming frustrated because you just couldnt buy in bulk the kinds of inventory they were able to get so they started to pull back. Reporter in atlanta at the american home, ceo says hes still growing the companys portfolio of rental homes at 2,500 in 3 states but he says the market is undergoing a digestion period after expone exponential growth. That means maybe a slow down in how many homes they acquire. That may mean letting go some employees and areas that it doesnt make sense or maybe you grew too fast. But its really institutions starting to prove or work towards profitability to show wall street. Reporter and thats what they want, is they want wall street to believe that this is, in fact, a profitable Business Model going forward. Back to you. Thank you very much. Housing, of course, just one example of what has been mediocre Economic News lately. This week we are going to get a new gdp estimate for this quarter. Next week, a jobs report. Manufacturing numbers will be out and the markets holding its breath waiting for more definitive news from the fed to begin tapering. We have the new fed chair announcement to be made this fall. I mean, we are wondering how the economy is doing, mandy. Throwing everything at the economy and seeing what sticks. Lets bring in our guests. Lindsay, first of all, how good is the economy and if we continue to get some lackluster news on the economy, how much will people start to scale back their expectations of a september taper . Well, the Economic Data has been very disappointing as of late, particularly because it sectors that the two expected to be the Silver Lining for the recovery in the second half have begun to lose momentum, specifically housing manufacturing. We saw in the Previous Report home sales very disappointing in suggesting that demand is faulting in a rising rate environment and looking at manufacturing and the headline, activity continuing to expand but the backlog of orders suggests that sentiment is slowing. Even after you factor out the very volatile transportation sector and defense spending. So it suggests were continuing to teeter along in this recovery and less than a 2 growth rate. Really no spark for momentum to move beyond that range. Andrew, how much is the expectation of tapering which would suggest that the economys Getting Better . Thats pushed rates higher. Has that in itself started to slow things down ironically . Yeah. I think to a degree were seeing some evidence particularly in the mortgage market. People are unwilling to refinance at higher numbers. On the new housing numbers, you have to remember, new home sales account for just 6 of the overall housing market. You know . The other 94 is the important, the bulk of the data and seems to be moving on okay. The fed in the minutes last week indicated that Credit Availability seemed to be coming a little bit more free flowing. I would agree with the point, bill, that we are seeing some signs as rates edge higher. Ill pick up on what youre saying about new home sales, andrew, because, you know, we were speaking with a guest on streets signs and saying that construction is lagging a little bit and obviously if you havent got construction, you dont have new homes out there and difficult to make the sale. Is that something youre looking at, as well . I think on the Construction Side, you can focus on the Housing Construction or you can look at the other side, kind of the number, the construction and that has begun to come back and youre also seeing it filtering through in state and local level where rising tax revenues from a recovering economy are starting to flow back in to both employment and in to Construction Projects so im confident on the Construction Side moving forward. I think what it says talking about home sales, looking at the data its a referral to the momentum, that pace that were at. Thank you very much to both of you for joining us today. We did have some breaking news earlier and we want to get more on this newses. Bill ackman selling his entire stake in jc penney. With us is an analyst on this. Give us your first reaction. Good afternoon. Hello, brian . Do we have you . Im on a cell phone. I hope you can hear me okay. My first reaction is i dont think this is all too surprising. Given some of the recent commentary of bill ackman and the firm and the commentary of jc penney. The market was expecting he would sell the stake. Maybe its come quicker than people thought. The fact that he is selling here is not all that surprising. Why sell now . Hell take a bath. Average price is 25 a share. His Purchase Price and now at 13. Roughly half that. So, why bother to sell right now at such a loss do you think . Well, thats a question you have to ask bill ackman. You know . I think clearly we had in the last weeks there was a pretty significant dispute on the board when he was obviously failed this as a result of this. Why hes selling now, i dont know. You know . He clearly given the commentary he made in the recent letter to the investors hes moving beyond. Is jc penney going to survive . Its a harsh question. Its speculation. Is it going to survive . Well, with okay. We seem to be having technical problems with the soun