This hour. What about Mortgage Rates in where do they go from here . Theyve been rising on the fears about the fell pulling back, so where next . My partner, sue, is at the nyse. Hi, sue. Reporter and the markets euphoria not to scale back on qe is farding a bit. The Dow Jones Industrial average off about 31 points. The nasdaq has remained positive, up about 5. 25 point p the s p off 2 points. The threat of a Government Shutdown becoming a possibility less than two weeks from that deadline. Fed chairman pbernanke talked about it during his News Conference yesterday. A Government Shutdown and perhaps even more so a failure to raise the debt limit could have very serious consequences for the Financial Markets and for the economy. And the Federal Reserves policy is to do whatever we can to keep the economy on course. Reporter and House Speaker boehner making some comments today as well. Our chief washington correspondent, john harwood, is here with the very latest on what is turning into a pretty ugly bat, john. Reporter ugly and its going it get uglier. The u. S. Chamber expressed the same view yesterday that bernanke did, calling the husband to raise the debt limit, avoid a crisis involving the full faith and credit in the u. S. Government. But right now thoer not on a path to do that any time soon. House Speaker Boehner came out in his News Conference today, defending an approach toward keeping the government running and also the debt limit that he knows is not going to become law because the senate will reject it. But he called on president obama to negotiate with him. Most president s refer to their bipartisan efforts to reduce the deficit as achievements. The rpresident sees this, quote unquote, as extortion. Is while the president is happy to negotiate with vladimir putin, he wont engage with the congress on a plan that deals with the deficits that threaten our economy. Reporter the problem, of course, is that the real negotiations are going on within the Republican Party right now between pragmatists and the Tea Party Zealot and the house of representatives, between Senate Republican and House Republicans and intellectuals on the oud like the wall street journal editorial page which yesterday said that republicans who were trying to extract an end it obamacare as the price for keeping the government open and avoiding a debt crisis are kamikaze pilots. John boehner shares that view, but he hasnt been able to make it prevail yet, sue. Yeah, he sure hasnt. John, thank you very much. So will the dysfunction in washington prevent stocks from going higher . Lets bring in bob pisani and kenny polcari, cnbc analyst. You got a lot of heat for that. A little bit. All through september. But now the onus which is to wash washington. And the market seems to be all of a sudden now that the fed is out of the way paying a lot of attention to that. But as they should. That was simmering but now that the fed is out of the way, its come right to the top and people do need to start aing attention. It could derail us a little wit. It absolutely could. With the fed continuing to push money into the system, it will temper any real pullback. Thats ha people will have to watch. So far this year everything has worked out for the stock market. So far. We dodged an issue with china, with europe, with syria, with larry summers. The markets hope that were going to dodge an issue with the government shutting down, but thats a big if. Let me go to glen schultz choose in chicago with performance trust. Glen, the Interest Rate scenario, where do we go from here with Interest Rates now that taper at least for now is off the table . Well, with taper off the table, i think where we go in terms of the Interest Rate environment is we clearly have established a 2. 5 to a 3 trading range in the absence of taper. I dont think the likelihood of getting inside 2. 5 yield on the tenyear treasury is very high because remember, taper is at least on the horizon now. And if its not this year, perhaps will we see tapering or talk of tapering bow beginning at the end of the First Quarter of next year going into the Second Quarter of 2014. All right. Let me listen take a listen to what stanley trudruckenmille told squawk box earlier this morning. Were going into extra innings, baby. The punch bowl is running out. Its just about try, and two waiters just came in, and theyre carrying this new punch in. Were going to really party now. Are we, kenny . Are we going to really party now . Listen, after yesterdays action, it felted like thats what its going to want to do. I think the hangovers going to be a really tough one. Once people start to dissect that news yesterday and really think about the reasons that the fed kept pushing at it, theyre going to realize, you any, its not all coming up roses. And so we should be concerned. Thats kind of what you said, glen, too. Yeah. Go ahead, glen. What i wassing if to say, i think the fed actually missed an opportunity. I think the fed was looking at uncertainty in the market, uncertainty around the budget. Also uncertainty around the transition of the leadership of the Federal Reserve, and they decided it keep the pedal to the metal and continue with their tap tapering. What they did ironically is create more uncertainty in the marketplace. On so everybodys looking backwards, asking what they missed and the fed saw. And i dont think they saw anything. I think the fed missed the opportunity. Forgive me for interrupting, guys. I beg your pardon. Were going to ask the question and hopefully answer it with dominic chu. Can wall street overcome the dysfunction in washington with some thoughts you in, dominic chu . Tyler, all of the budget issues in washington, they will are an effect on the markets. But theres one other thing that many traders are keying on as a reason why we may actually be due for a pullback, and thats momentum, simply put. Have we gone that far too fast . Sure, we hit a record high in the s p yesterday, took another shot at it today, but we also saw two similar peak earlier this year, one back in august, the other in may. Each of these three peak were talking about put the s p in a statistical situation where a pullback was very, very likely. In august, that pullback was around 5 . In may, the doctor was close to 8 . Now, a lot of traders and investors operate under the philosophy that history tends to repeat itself. So if recent history repeats, then could stock be due for a pullback . Thats the real question. The average of the last two pullback that we saw, around 6 . Now, there are no crystal balls here, but many traders are looking for this to be a real caution flag. If we dovy asimilar pullback, we could go back to around the 16. 26ish range, sue. Thats why a lot of traders are paying attention to. What hes referring to there is the percentage above the 20020 200day moving average. Traditionally thats been an area where you get reversion of the mean and pullback. What you were saying, just a couple comments. Number one, much of the rally yesterday now appear to lack like short covering, not actual new buying coming in. Number two, were moving in line with the tenyear today. As the tenyear moves up Interest Rates are dictating. The bond market does not trust whats going on with the fed right now, and thats going to be the biggest issue. Finally, if the economy was so good, the fed would have tapered. Thats what youve been saying all along. Thats the issue what you were saying earlier. Thats the simple way to understand this. If the economy was good, the fed would have tapered. Absent going out blind blying global industrials today. Theyre still in the sure. Right. But all those issues coming into september, we nknew all these issue were out there. And so the market and a lot of people chose to ignore it. It didnt matter. In fact, it did matter. Glen, final thoughts on whether the economy actually is not as strong as the market has perceived it to be. I think that the economy is slightly weaker than the market has perceive it to be. The ebb and flow of the taat th time data generally is positive. It just doesnt have the type of momentum that a lot of people are looking for in the marketplace. But look at the Federal Express earnings reports just released First Quarter, saw 15 increase in international shipping. So thats a good leading indicator. Todays Economic Data beat consensus across the board. The problem is the hmagnitude o the strength of the trend. Were not on a 3, 3. 5 trend, and thats what the Federal Reserve wants to see. Were just not getting it. All right. Gentlemen, i have to leave it there. Thank you all very much. Glen, thank you. Ty, up to you. And props to polcari for calling the no taper. That guy had it right. He told us that the day before. You know, you heard bob pisani just mention the idea that today it looks like yesterdays rally may have been a big of short covering. So one of the questions is, can yesterdays big sector movers like utilities sustain their gains . Seema mody has been looking at the numbers. Tyler, it did seem like traders were at the edge of their seats waiting for that fed decision. In fact, twothird of yesterdays rally happened within five minutes of the feds decision not to taper. All ten s p sectors posted gains, but looking at the Market Performance post the feds decision at 2 00 p. M. To the market close shows that real estate stocks were the wiggest winners, gaining roughly 4 . Other ratesensitive sectors like utilities is and Consumer Staples also rallied. These two sectors had combined are yielding the highest percentage of 52week highs in todays trade. Hears whats interesting. A quarter of todays new 52week highs are in the industrial space which remember not a leader in yesterdays trade. United tech, lockheed martin, among others leading the pack. So yesterdays winner, aside from housing stocks, are on average extending their gains while a couple gnaw sectors are getting a bid as traders, of course, try to diversify their portfolio. Tiler . Thank you very much. The emerging markets, of course, on fire following the feds move to keep qe in place. The question, is this the green light there . Michelle carusocabrera here with that part of the story. What do you say . Well, its in surprise we saw it, right . The emerging markets sold off the most on fears of the fed taper way back when, so in surprise they skyrocketed on yesterdays announcement even more than the United States did. Joer night stock markets in Southeast Asia gained on average more than 3 . Indonesia was up more than 4. 5 . India and thailand shot up more than 3 . Currency saw impacts as well. The real, the turkish and the indian rupee all moved higher. You seat the same pattern. Sew how the dollar declines there . That shows you the rupee improved. A onemonth high. Emerging markets, u. S. Rates started rising. Nearly every other country in the world also faces higher rates. Other countries have to pay a premium to the u. S. Theyre seen as higher risk. Of course, higher Interest Rates often slow economies. Ashmore research earlier this month and before yesterdays announcement said we think the consensus is wrong about u. S. Monetary policy and went on to say we think its quite likely that emerging markets will be the strongest performing asset class in the world over the next 12 miss. Thats a big, bold call because people were so negative on them. Jens says many em currencies can go even higher even after the rally we saw in the last 24 hour. They think emfx continues it gain this coming weeks. The now highly likely yellen appointment may give a further impetus. Buy the peso, the real, the polish, the malaysian and the peso, youd better fund that trade in u. S. Dollars. I cant get enough. Thank you very much. Sue, down to you. Guys, thank you. Tesla hitting an alltime high today. Deutsche bank raising its price target to 200 from 160s it. Saying it expects the electric car company it mdestly outperform Third Quarter margin expectations. The stock is up 7 today. But did you buy tesla back in january . Hope so. Nice call if you did. The stock is up 420 this year. Agilent gaining ground, up 4 , almost 5 now. The company to split into two companies, one focusing on life science and diagnostics, the other on electronic measurement twi device. Ty . To housing now, Mortgage Rates were rising because of fears s about the fed pulling bk on the bond buying and stimulus. Dayian that o iaia iaian diana where rates will move. Dia diana. Reporter rates moved down pretty dramatically after the feds notaper talk. Take a look where we were last week, right around 4. 80 on the Mortgage Bankers association read. Since may, up well over a full percentage point which translates into about 20 less purchasing power for the average homebuyer. All right. Where are we today . Of course it depends on the lender. 4. 25 is once again a viable rate, but i would likely have to pay some points. The range is now 3. 75 to 4. 5 . If you have no points and a great credit risk with low down payment. This is all from Matthew Graham at mortgage news daily. Interesting, though, the realtors say lower rates will not help home sales this fall. Closed existing hem sales rose 1. 7 in august, boati inbeating expectations. The realtors call that the last hurrah as buyers got off the fence and signed contracts in june, fearing higher rates. They expect sales to fall this fall and into 2014 because of very tight inventory and still very tight credit. Theres, of course, lots more, in the one, but two articles online, realty tl check. Cnbc. Com. Thanks very much. Wells fargo, the largest u. S. Mortgage lender says its going to cut 1800 jobs because of lower demand for refinancing amid those higher Interest Rates. The stock of wells fargo down 47 cents at 42. 85. You can call it a whale of a setment. Kayla tausche with the fallout from jpmorgans 900 million headache. Kayla . Well, tyler, the bankss price tag forty london whale trading debacle has the twoen costly and still growing. Other regulatory issues are popping up. Why it matters and whats next for that stock. Thats up next after this break. You really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . [ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. Riteaid moving higher. The drugstore chain reporting a surprising Second Quarter profit. It boosted its earnings outlook based on continued sales growth and profit margins, the stock right now is up just under 20 , ty. Well, sue, big news from jpmorgan. Sort of as expected. The banking giant paying maybe a little more than had been originally forecast. 920 milli 920 million in penalto countries to settle some of the liabilities fromity 6 billion london whale trading fiasco last year. Investors kind of shrugging it off. The stock down just 65 cents at 5 52. 76. Kayla tausche has the details. The settlement is among four regulators who will split that total, 920 million. Its the Federal Reserve, the o. C. C. , s. E. C. And Uks Financial Conduct Authority which in this case has jurisdiction because the office that placed the trades at jpmorgan was located in london. Its a big price tag especially since the trade already lost 6 billion for the bank and since theres more fallout coming. Staff at the cftc have recommended the agency launchity own enforcement action over the issue, informing the bank of that decision on monday through whats called a wells notice. Other federal agencies are investigating civil and criminal matter related to this case as well. But thats just for the whale. The outside Credit Derivatives trade the bank buildup. The bank is also under investigation for hiring practices in china, mortgagebacked securities fraud and potential in electricity trading. Another issue concerning proper consumer collection practices. All told the bank said its legal liabilities could go up to 6. 8 billion beyond what its already earmarked to pay for this stuff. Its been putting aside more each quarter to pay for it, ty, but this is just a boatload of mope. They talk about these settlements being a plaque eye for jpmorgan, but you koind of wouldnt know it. Its the biggest bank still. Whats giving it a bos . Well, its the Biggest Investment Bank still. And where is it getting that business from . Ity balance sheet. It is the single biggest jupd writer of bonds and loans and a will the of companies have been taking those out, refinancing and taking out new loans because Interest Rates have been low. They have been capturing the bulk of that business. It will be spg it see, though, once rates tart twg back up a little bit, how does that activity shake out . I asked the question the other night of former s. E. C. Commissioner harvey pitt, does this settlement potentially cost jpmorgan business . Customers . Clients in youre finding no, theyre probably going to be the lead underwriter on a chrysler ipo. Yeah, and thats a situation thats interesting b