We begin with breaking news. The first Public Comments from the newest member of the federal reserve. The dallas president Robert Kaplan revealing for the very first time some clues on where he stands on Interest Rates. Steve liesman following it all from d. C. Steve, what do you have . Scott, thanks very much. We are getting the first comments from the former harvard professor and Goldman Sachs banker turned dallas fed president , and the question we have going in is how much like the hawkish Richard Fisher is he who just left the dallas fetd presidency, and he is showing himself not to be too much like him. He says the fomc was prudent not to hike in the last two meetings. We went back and looked, and Richard Fisher several times last year had called for rate hikes, including when he had left office on the eve of the september meeting calling for rate hikes hen. Kaplan saying it was prudent for the fed not to hike. He goes on to say appropriate Monetary Policy will remain accommodative for some time, and the lower funds rate is needed to achieve any desired level of accommodation given the underlying economy. He does say that a return to normal Interest Rates will be gradual, but accommodation doesnt necessarily mean zero rates and does talk about the costs to maintaining zero rates, including distorting investments and business decision says. Let me give you his view on the economy. Spending more time with his first speech here. He says u. S. Consumer demand remains strong. He sees gdp growth between 2 and 2. 5 through the end of 2016. Growth, he says, will be sufficient to drive down the Unemployment Rate. Thats important. Unemployment is near the Unemployment Rate suggests the economy is near full employment. Just a couple more things. His inflation forecast sees the fed hitting that 2 target in 2017. Like other members of the fomc, including vice chair stan fisher, he sees the downward pressures on inflation running their course. In other words, running out and leveling off inflation in the next couple of months. The world will have to adjust, he says, to slower chinese growth over the longterm, and one curious thing that i dont quite understand. Well have to quiz him on this when we have a chance. He says the fed needs to consider labor slack in foreign economies as well as the u. S. Economy. That suggests a potentially dovish view on labor slack, but he doesnt really explain it, so certainly we have not a hawk in bob kaplan, but to the extent to which he is dovish, it doesnt seem all that dovish, but certainly not among the most dovish out there. Right. Prudent not to hike at the last two meetings. He says. The question is what does he think about the upcoming one in a few weeks . Whats your guess, steve . Do they go in december or not . What is the lease man indicator telling us today . I would have to check the liesman indicator. Okay. I just did. It suggests they will go in sdult wherebying thaudz my take right now, and i dont i have said this for a long time now, scott. I dont think the bar is very high. It has to deliver a 2 , 2. 5 growth rate. I think inflation has to be stable. We did see that in the last Consumer Price index report, and i think the Unemployment Rate has to be steady, and you dont have to have too many or too strong a jobs report in december for the fed to go. I think thats the default position, and my only astericks or cavat is some sort of widespread military action that would cause the fed to pause or a big disruption in the dollareuro exchange. Although you have lacquer saying we have overreacted to events. At the same time you have comments from deadly saying, look, if we hike, its not going to be a surprise. Were telegraph it pretty well. It is absolutely the case. Markets, business journalists, economists tend to overreact to these incidents. They have a pronounced affect on consumer confidence. They tend not to have a pronounced affect on macroeconomic growth indicators. We have relatively strong consumer demand. Weve been running at 3 the past couple of years. We have job growth and we have low oil prices. All of that should be favorable for consumer demand and favorable consumer demand should mean decent u. S. Growth. The question is how would the markets react to all of this . Nuri ranini yesterday telling us it doesnt matter. It doesnt matter that they go in december or march. Well talk about it on the other side. It looks more likely theyre going to move next month, but in some sense it doesnt matter whether they move in december or march. The fed funds rate is going to be reaching between one and 125 between the end of next year regardless of whether the fed moves in december or march. Thats not very important. So how is the market going to take it . Itsles difficult to consider how the market takes it immediately. You take a look at what happened with france, and i was with a bunch of guys on sunday. We all thought the market would be down about 1 globally. It wasnt. It was up, and it was up nicely. I have no idea. It doesnt matter, as he said, and rates around the world, theyre actually low. We have germany issuing their twoyear at the lowest theyve ever issued. Youve got low rates around the world. China will jump in eventually will real stimulus, so you can keep a lid on it, and i think the 25 bits is absolutely meaningless. What im looking for after is the rate of increases Going Forward. I still which even nuriel said its going to be gradual if not very gradual. It shouldnt be in your investment equation at all, period. Lets note a couple of things which we should highlight. First of all, the market is just off the highest levels of the day. The dow is up more than 120 points, and oil is worth noting as well. Its now dipped below 40 a barrel for the First Time Since august. Some are suggesting maybe you have an attempt to divorce itself the moves between the stock market and what crude are doing because lately knee been in tan dem. Crude goes lower. The market goes lower. Crude goes higher and the like. Were not seeing that at least at this moment. Pete. Well, you are getting a nice move out of techno today, and obviously that didnt hurt that Goldman Sachs put apple on its conviction buy list. Then you look across to the financials as well. The reaction today, look at Something Like bank of america. Weve been talking about this, and obviously if the fed is going to move, we know its going to affect the banks probably in a very positive way. At least we all think that they would. In terms of citi and bank of america and the jp morgan as of the world. You take a look at those sectors. Theyre performing very well. Even the oih, even with the dip down, you take a look at the services names. Theyre reacting very nicely today as well. When you see this type of a market and you see the strength and the broad swath in which its bringing Different Levels up, i think were looking at a strong market. You look at the volatility index. Its pulled back off the 20 level, pulling back underneath that 50 day as well. Dowlinged youlling autos use that as your thesis on how you are going to develop your thesis as to where the market goes. Do you agree . I broadly agree. The last five years have taught us anything, then its that making portfolio decisions based on Interest Rate forecasts has been a really bad policy. I think that people should ignore them in the shortterm. The one broad theme, i would mention, is that in historical periods of rising rates, value stocks have tended to do well relative to the overall market. Living through a five tenyear period where growth has been dominating value. Thats contrary to what has the moment wrum in the market recently. Value has done well in periods of rising rates. You think that this is going to be the case this time, and thats the conversation weve been having for the last couple of weeks at minimum tooz whether values back in favor and whether its lasting. Were not talking about a shortterm deal where value comes back in favor and growth comes back and says, oh, im still here. These things are completely impossible to time. Who knows when the value will return to form . All we know is that the periods of growth outperforming value historically have typically been pretty shortlived. The last one we saw that was as extreme as the one were living through now was in the late 1990s, and we know that value did extremely well during the first part of the 2000s. I dont know when it will start, but it will probably be a secular change, not a wick trade. What i can tell you, what patrick is saying here, is if you look at a chart and the fed funds target rate over the longterm, and you look at relative performance of Large Cap Value stocks they map each other pretty well. This is a long game. Thats a good thing. Im still in that camp that says these guys are market dependent. Theyre afraid that theyre going to upset the apple cart. I know ranini said 1. 25. The end of 1026. That means five jumps up. I dont he thinks they go through times next year sfwloosh i this that i i dont think they go next year from where im sitting right now. I think everyone is still getting the lay of the land. You are telling me you dont think they go at all in 2016 . No. I think inflation is worse you are way out like on gilligans island. Okay, well, a year ago i was saying everyone was saying theyre going to raise in march, and i was saying theyre not going to raise this year, so im in that camp now, and im happy to stay in that camp. Call it gilligans island. Ill hang out with ginger and mary ann. Thats fine. Ill take my wife. Analogies aside. In the longterm value will do well. Give me sectors you would buy today. I think people will ibm is the quintessential value stock, and all is a nice way of saying crappy recent results and a pessimistic outlook from the overall market. The key with values is that markets tend to overreact at extremes. For a stock like ibm, its had how many ever in declining revenue growth. Had he tend to leave it overly cheap. Should it be cheaper than amazon in the markets tend to overdo it at extremes. I dont know why you would think the market is overdoing it . Every business is under massive seeming. I think its actually been inefficient in not reacting to it sooner. Yeah. What should a commodity so i use ibm as a representative example of the type of attitude investors have towards value stocks. Will ibm do well . Who knows if that individual one would will do well. Im recommending a basket of value stocks. The point is its extremely ease where i to build a narrative against ibm. Right . Just as you build the positive. Buffett owns it. It has a yield. Its ten times earnings. Its easier to built a positive narrative over a stock thats come down 50 . Than a negative. Really . I think so. I think you could say this is the ultimate falling knife. We could have heard that three months ago, six months ago, nine months ago, two years ago. Patrick, its good to see you. Doc, well get to you in a moment. No problem. To the latest in paris where police were involved in a raid and shootout early this morning. That left two dead and seven under arrest. Michelle car Russo Cabrera live as well from there. Michelle. Scott, that raid happened on this street overnight right behind me about a block and a half away. This location is 1. 2 kilometers away from the stadium of france where three suicide bombers detonated vests on friday night in the wave of attacks that killed 129 people here in paris. The raid began 4 20, 4 30 in the morning with volley of gunfire that local residents said went on for at least 15 or 20 minutes. They heard explosions. When alwas said ask done, as you said, seven people arrested. At least two dead. The video from overnight was dramatic. We can see people in the street with guns. Many members of the police through the streets as they raided the apartment. We are waiting to find out whether abdel hamid was in that apartment. He was in the alleged target of fridays attacks here in pair sxishgs were also waiting to find out about anything we know about salah al islam. We think we may hear something at 1 00 p. M. Eastern time. Thats when the prosecutor will hold a News Conference where perhaps well get more details on who was in the apartment, who is dead, who is alive, who is under arrest . One of the key events of the raid, a woman wearing a suicide vest detonated the bomb on her and killed both herself and the man who was in there. In the meantime, theres a new statement from isis in their magazine they put out, and listen to what they have said. The Islamic State dispatched its brave knights to wage war in the homelands of the wicked crusaders, leaving pafr is and its residents shocked and awed. The eight knights brought paris down on its knees after years of french conceit in the face of islam. A nationwide state of emergency was declared as a result of the actions of eight men armed only with assault rifles and explosive belts. They are declare heing victory of what we have seen in paris over the last several days. Scott, back to you. All right. Thank you so much. Michelle Caruso Cabrera from france. Ahead on the half the pulse of retail. Target Ceo Brian Cornell joining us in an exclusive interview to make sense of the consumer and what to expect for the holiday season. Plus, our calls of the day affect nearly 1 trillion worth of stock. Is it time to buy apple and sell exxon . We have a mega cap debate brewing on this desk. Youre watching cnbc first in business worldwide. When you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. At t has the tools and the network you need, to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. Some neighbors are Energy Saving superstars. How do you become a superstar . With pg es free Online Home Energy checkup. In just under 5 minutes you can see how you use energy and get quick and easy tips on how to keep your monthly bill down and your Energy Savings up. Dont let your neighbor enjoy all the savings. Take the Free Home Energy checkup. Honey, we need a new refrigerator. Visit pge. Com checkup and get started today. Announcer if youd give thanks for a bette[barks]s sleep. Sleep train has just the ticket. [train horn blares] during sleep trains thanksgifting sale save up to 300 on beautyrest, posturepedic, serta, even tempurpedic get up to three years interestfree financing plus, choose a free gift with selected mattress sets but hurry, sleep trains thanksgifting sale wont last sleep train [train horn] your ticket to a better nights sleep we are back. Shares of target are slumping today after Quarterly Results came out earlier. The retailer just the latest in a string of disappointing earnings that hit the sector pretty hard. Cnbcs Courtney Reagan live in minneapolis with targets Ceo Brian Cornell as a cnbc exclusive interview. Courtney, take it away. Thank you very much, scott. I am joined by Brian Cornell here in a target store not far from your headquarters in minneapolis. You reported earnings this morning. Not goof numbers. Now we want to look ahead to the holiday season. You know, very strong Fourth Quarter last year. Can you top it this year . We feel really good about our plans for the holidays. Now, i think it builds off the momentum weve seen throughout the year. We had great traffic growth again in the Third Quarter. We expect that to continue in the Fourth Quarter. Weve spent a lot of time making sure weve had great plans in place where are i think we have a sensational marketing program. Were scleerl elevating the in store experience. You walk aron the store here today and you notice that, and we feel very good about our black friday deals, our ten days of deals, and the combination of what were going to offer in store and online. We feel really good about our plans for the holidays. And youre starting some of these deals before black friday, your ten days of deals. Is there any early traction a couple of things im really excited about. If you walk to the front of our store, we made a significant change from last year. Weve created something that we call bullseyes playground, and the reaction from the guests have been sensational. High double digit growth rates in that section. It really tells us the guest is interested in what we offer. Theyre attracted our experience, and weve got a couple of other unique offers. We partnered with adel. Were featuring three exclusive tracks that well offer later this week, and we think thats going to drive enormous traffic into our stores before the holidays. Weve got our game in place, and i also think the big difference this year versus last year were in a much better position with thanksgiving. As we continue it to think about reinventing food, i think were going to see a much stronger turnout in our target stores as our guests get ready for the holiday. Another strategy has been online. Your Digital Sales were up 20 . Last quarter, though, they were up 30 , and your growth target is 40 for the year. Is that growth target off the table now . Well, our focus is on really making sure were delivering a great experience. Any time any way the guest wants to shop, and i know that most of our guests start with a digital device in their hand. Making sure weve got the right Digital Offering and whether that brings them to the site or encourages them to come to the store. Either way we win. We saw traffic growth in store and online last water. I feel good about our overall strategy with digital. I dont feel we significantly wrout perform the industry. I just saw the o