Commodities will join us. He sees a 40 rally in natural gas. Thats not great if you heat your home with it. He also expects a rally in oil. The northeast is bracing for a massive storm, folk. Could Hurricane Joaquin be another Superstorm Sandy . We certainly hope not but we are tracking it all for you. We begin with investors and theyre beginning the new quarter in the red. The latest disappointing manufacturing data from the ism is adding to the weakness. We have the dow down by 164 points. The s p 500 is currently down by 14 points. And the nasdaq off by 45. Were also watching very closely, folks, over the course of the next few hours yields on the 10year note because were sitting at 2. 032 . So close to dipping back to the 2 even mark, maybe even below it after that is m number. Bob pisani joins us from the floor of the Stock Exchange. Hey there, bob. Well, it started okay, mandy. We kind of gapped up in germany and in the u. S. Lets take a look at the s p 500. But that faded very, very fikly. We went into negative territory within ten minutes of the open and essentially other than a few moments have been negative all throughout the day. We are coming off the lows. Theres a bit of good news. The markets midday, you want to blame it on something . A couple problems. Germany started up 1 and ended down 1. 5 . 2. 5 range right near the bottom. The other problem was crude weakness. We were trading as high as 47, as low as 44, a wide range. Breadth has been 2 to 1 declining to advancing. Lets call it heavy volume on the first trading day of the Fourth Quarter. Normally you buy the losers in the prior quarter. Not today. Materials were losers in the last quarter and they are right now. Alcoa, cf industries, freeport, the usual names. And with oil bouncing around so much, energy has been on either side of positive or negative but largely on the negative side. Eog and apache are up, but exxon, schlumberger, Chesapeake Energy which laid off 15 of hits workforce also on the downside. Typically you get movements in etfs and we are getting that today. People are moving money between value and growth. This is very typical in the beginning of the month. Some people betting on more growth, some betting on more value. So the bottom line here, mandy and tyler, is were getting continued volatility. I think a lot of people are still positioning themselves for more volatility. Thats why were seeing a little bit of a selloff. Theres no big news, just people thinking october is going to be volatile, lets just keep playing that volatility. Right, right. Certainly that v word is the catchword for 2015. Lets head up to the nasdaq and find out what october the Fourth Quarter is going to look like. We have Bertha Coombs live from there. Certainly not an you a tishs start, mandy. Apple is lower. A report saying apple cutting its chip order. Thats weighing on the chips. As you take a look at the chipmakers, theyre among the biggest decliners today. The other usual suspects among the decliners today, the biotechs. Down for the ninth day in the past ten sessions. Sam stovall though over at s p says Health Care Third quarter earnings are expected to post a 28 growth despite the fact that those stocks got battered last quarter. And the s p is looking at 3 decline. Biotech earnings is expected to top that up 44 . There are new cholesterol drugs launched. The Current Quarter big for health i. T. Firms with that massive icd medical billing system overhaul. Hhs says it will take a couple weeks to know how its going. But so far they have seen everything okay and they have a war room thats going to be manned 24 7 for the next 10 days to really oversee this transition. Bertha, thank you very much. Automakers in high gear ford, gm, chrysler, latest Sales Numbers were good. Im sure phil is going to tell us a little bit about volkswagen. I do have volkswagen numbers and a look at what that stock has done today, tyler. You mentioned strong numbers from the major automakers. Take a look at how strong they were in september. Double digit gains for all of the major automakers. Ford leading the pack, up 23 . Almost all of these better than expected. One that really stands out there, general motorings s up 1. The expectation was a dagain of 7. 2 . What was driving sales in september . Labor day weekend was part of the september sales. Labor day is traditionally one of the strongest weekends of the year. Trucks and suvs remain in high demand and strong Consumer Confidence. Auto sales almost always go in tandem with Consumer Confidence and it remained high in september. Lets talk a little bit about volkswagen. Vw sales for the month up 0. 6 . Thats actually better than many people were expecting. The estimate was for a decline of 7. 3 and, remember, that includes basically the last two weeks of the month where vw dealers could not sell clean diesel models. Shares down 2 as they continue to deal with that investigation involving the rigging of emissions on clean diesel vehicles in the u. S. And europe as well. Lets take a look at the pace of annual auto sales. Well get the official numbers sometime in the next couple hours but when you look at this graphic, the thing to keep in mind is on the far right which was 2014, 16. 5 million, right now we are on pace for 2015 to be a 17. 26 million and at the bottom see what theyre saying there . 18 million. Thats the Monthly Sales pace projection right now for september. Just for september. And if that happens, guys, it will be only the eighth time ever that Monthly Sales come in at a pace above 18 million. The last time it happened, july of 2005. Guys, well get that number sometime in the next couple hours. Thank you very much. Well stick with transports more broadly speaking. New study showing an unprecedented labor shortage in the sector. This is demand for goods continues to grow and the Holiday Season just around the corner and some of those big carriers talking about the numbers of workers they need to fill. So what are they doing to fill the gap, Morgan Brennan . First of all, i have to say i cant believe the Holiday Season is right around the corner. Its blowing my mind right now, but you already bought my present. Iskof course i did. You were first on the list. You probably heard about the shortage of truck drivers. There are 40,000 needed immediately but Logistic Companies are having a hard Time Staffing the warehouses that make ecommerce possible. 50 said filling a specialized positions is an issue. 46 said hiring is taking a lot longer than expected. Also theyre having a hard time finding quality workers. According to this report, 32 of Logistics Companies are experiencing shortages among warehousing staff. That was last year. Thats expected to jump to 44 over the next five years. Its a very similar story for truck drivers, also Skilled Labor which could affect 75 of Logistics Companies over the next five years. So kurt salmons retail strategist frank leo agrees warehousing is one of the biggest pain points, particularly forklift drivers, supervisors with management skills, and temporary pick and pack workers. Now, he and others blame three factors. Overall improvement in the u. S. Labor market which means fewer applicants. The fact that warehouse work is difficult, its long hours, not the greatest pay, and, three, more competition from uber and other share economy startups that compete for the same labor and offer more flexibility. So this is beginning to pressure pay. We have prologistics saying starting warehouse wages which have been stagnant has increased by 1. 50 to 3 an hour in certain markets. Also some companies saying theyre making scheduling more attractive. Also boosting benefits and all of this could mean higher operating costs though. Analysts do say they expect companies to absorb those kobss at least coming into the this holiday peak season rather than push that out to consumers. So at least thats the bright spot. Uber competing for workers in the warehouses. Yeah. Yeah. Flexibility, pay. And especially when you think about the Holiday Season. U. P. S. Getting ready to hire 95,000 temporary workers, fed ex 55,000. Are you going to work there or drive a car and make your own hours . Probably follow the money. Brazils stock market plunged about 15 in the Third Quarter. Russia down almost 20 . India down 5 . Chinas shanghai index tanking 20 . So are we going to see a turnaround in the Fourth Quarter . Seema mody, you have q4 playbook. As you point out a rough quarter for the emerging markets. China, brazil, rush sharks all down more than 15 . The emerging market etf had its worst quarter in four years. The question is will we see a turnaround and could it start now . Well, according to mcquieacquea october has averaged about a 5 gain for the emerging markets total return etf. The best month on average in this fiveyear period. So if youre betting on history repeating itself, emerging markets could be a good bet. Those china pmi numbers boosting sentiment. Analysts pointing to valuation as a reason to start picking on ems currently trading at ten times earnings versus its five year average of 11 times. Interestingly enough, october is also the best month for asian currencies gaining nearly 1 against the u. S. Dollar. But there are still plenty of risks analysts are voicing concern over. Lower commodity prices, the negative impact of the stronger dollar weve seen over the past year and, of course, the feds looming rate hike. You have to Pay Attention to where the growth story is. Something we discussed earlier this week on power lunch. Perhaps looking at countries that have a strong economic backdrop when you take a look at the brics, india really the standout player there. It really is. Relatively speaking even though it was down in the Third Quarter. Compared to the others it was holding up as a bright spot. Thank you very much, seema mody. Tyler, over to you. All eyes or at least a weather eye on Hurricane Joaquin this afternoon. The storm strengthening to a category 3 hurricane as it moves north to threaten the east coast of the United States. Weather channels chris warren is tracking the storm for us. Hurricane joaquin, a category 3 hurricane. The latest information from the National Hurricane center as of 11 00, their 11 00 eastern update, up to 125mileanhour storm. It is increasing in strength. The big question is where is it going to go . Lets take a look at the possible path. What were looking at is the cone of uncertainty, and what this is focus on the word uncertainty. This is where the center of the storm could go. Now, it could go here, it could go here throughout the course of time. Keep in mind also that impacts will be beyond this. So you can have a line here, the center could be here, the center could be here but if the storm is this big, there will be impacts outside of this. So this right now again uncertain where exactly its going to go. If you live in these areas, you do need to be on alert for the possibility of some very heavy rain, dangerous surf as well because regardless, even if it goes out to sea, flooding will be a big issue from the southeast to the northeast. Back to you. Thank you very much. Commodities crushed in the Third Quarter. How do you trade the complex in q4 . Back of americas head of commodities will be joining us, and he sees a 40 rally in that from now to the end of call. A very bullish call. He also expects a rally in oil. Youre watching cnbc, first in business worldwide. Welcome back to power lunch, every. Im tyler mathisen. Here are this hours headlines. Conagra foods announcing a 300 million restructuring plan. The company will cut 1,500 jobs and relocate its headquarters to chicago from omaha. Shares of dunakin brands plummeting after disappointing guidance. The outlook also missing forecasts. Dunakin plans to close 100 stores. I open its not the one in oceanside, new york. Northrop grumman winning an air force contract developing and modernizing drones. Biotech illumina down 10 . The worst performing stock in the biotech index. A competitor game out with a fast faster sequence. Illumina cut to market perform from outperform based on uncertainty in the next generation is he queensing p Generation Sequencing products. Call it a commodity crunch. The index taking a hit so far this year down more than 15 , so as we kick off the Fourth Quarter, is there a turnaround in store. Its francisco blanch, thank you very much for joining us today. You have lots and lots of forecasts according to which commodity were talking about. The one i really noticed was nat gas. You have a bullish call, 40 upside between now and the end of the year. Is that predicated on a really freezing winter or Something Else you see . I think seasonally natural gas demand tends to pick up strongly into december and january, so we do see prices picking up seasonally. We think inventories will end up the injection season around 3. 9 trillion cubic feet in storage, and again under normal weather conditions we think probably gas gets back above 3 bucks. But is it normal to have that much upside between now and the end of the year . You know, you say its seasonal. We have winter every year but that much upside . Its normal to have some upside. We think that the market has been beaten up by a number of factors in recent months, but if you actually look at the demand picture over the course of the next few quarters, things are looking a lot better for gas. You have pretty large exports to mexico. You also have a big ramp up in industrial demand for gas. You have the retirement of coalfired generators which are going to reduce the ability to use gas switching, and then lastly you will have as well i think increasing demand from the liquid natural gas terminals being built in the south of the u. S. Okay. Lets talk about crude oil. Yeah. Youre seeing 4 to 5 upside between now and the end of the year. What are you seeing for crude . For crude oil, i have been saying this for a while. I think 20 a barrel is very unlikely. Of course, anything can happen, but i think its very unlikely scenario. We think inventories are going to be pretty balanced into year end because we see a pickup in demand, a seasonal pickup over around a Million Barrels a day just as supplies in the u. S. And elsewhere continue to decline into the end of the year. So we think that inventories globally will be roughly balanced for the first time, for the first time in about eight quarters. Thats going to be a big event which is going to support the price of oil into year end. We are worried about the first half of next year because we still see inventory builds in the next refinery maintenance season, but its something we will worry about once we go past december. But from here to the end of the year, we see a little bit of upside. You see a third the downside for gold prices. Is that predicated on your fed outlook and the dollar . Exactly right. We think the fed is going to hike this year, holding onto our call, and we are bearish gold. We think gold gets back down sub 1,000 per ounce. At some point the market will start to price in a flat lining of the fed hiking cycle and that probably lends some support to gold prices down the line, but i wouldnt fight the fed if they are, indeed, planning on hiking which they have telegraphed. So gold will be hit by that. Golds historic value that frankly offers no yield and i think is going to be hit as the fed hikes. A lot of dead money there. Thank you very much for joining us. You say a higher copper price as well. Tyler, over to you. Thank you, folks. It is the home of the booming tech industry, real estate through the roof, but has californias economy become too good for itself . Jane wells, who is never too good for haerz erself is live i. Hi, jane. Tech isnt the only thing going boom. You wont believe how much it costs to live here. We have the downside of the upside when power lunch returns. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Back to power lunch. Im tyler mathisen. Biggest economy in the u. S. By far and if it were its own country and some people say it is, it would be in the top ten economies of the world. But a new report out raising real concerns about californias red hot economy and jane wells is live with the details in los angeles. Hi, jane. Several reports, tyler. California was hit hardest by the recession, but it has some roaring back. Its adding jobs faster than the national rate. Theres also been money coming into the state because there was a temporary state income tax hike, prop 30. Could there be too much of a good thing . In a slew of economic forecasts, well regarded forecasts looking at the eighth largest economy in the world, contributes 13 to u. S. Gdp, here are the problems. First, state taxes could very well take a hit because of the stock market according tou cla. California Lutheran University says the entire state Budget Surplus could be wiped out in large part because we continue to depend on our richest residents for tax income, especially their Capital Gains and Capital Gains are taxed as regular income. The stock market and other asset prices are critically important. Since prop 30 passed, its become even more important, so so far we have not seen a big drop, but theres a real