7 30 this morning and after all we heard from the retailers, we know jp penny had better than expected comps a lot of the attentions after the big misses from macys and nordstroms this week. But first a check on the markets this morning. Yesterday was the worst day for the major averages since september 28th. The dow and s p are on pace for the worst week in ten weeks. This morning things are looking flat but this comes after a decline of 1. 4 for the dow yesterday down 254 points. And breaking news outside the world of business overnight. The pentagon says that u. S. Forces targeted this islamic this isis militant known as jihadi john with a drone strike in syria. He has been seen in isis videos executing several western hostages including two u. S. Journalists and an aid worker. The pentagon is assessing whether the attack was successful. Well bring you the details as they develop. We have more hints that the fed could start raising rates in december. Speaking late yesterday, Stanley Fisher suggested u. S. Inflation should rebound next year. This could be a sign the fed is less willing to let low inflation delay tightening. Also loan tee po is postponing its ipo citing market conditions. It was expected to price that offering up 30 million shares last night. At the top of the price range it would have been valued at 2. 6 billion. And milan wont win its hostile bid for perrigo. We should get news on that while squawk is on the air around 8 00 this morning. Other stocks on the move today, you might want to watch, implied materials posting Quarterly Results in line with estimates and offering a solid outlook gain a boost from Companies Making smartphone and memory chips and shares trading higher a little bit. Almost 3 after hours. Well talk to an analyst in a moment but shares are under pressure. Earnings and revenue are both above consensus but the Network Equipment maker forecasting Current Quarter revenue and profits below estimates citing a slow down in order growth and this was a leading Technology Indicator many times and theres some warning signs. We will talk to an analyst in about 20 minutes and dont miss ciscos ceo at 9 00 eastern. Usually we think john. Hes still there as the chairman. Yeah. But its chuck robins and same store sales in china rising 5 last month. Theyre backing the china comps Sales Forecast for the 4th quarter. Remember yum announced its spinning off its china business. And youll talk nordstrom now but how many weeks until the fed . 4. 5 . 5 . Until the fed decision. 250 pounints yesterday. Macys down how much . 14 . Nordstrom down 20 . China i saw some stuff about steel. How much theyre shipping. Do you think theyre not going to be able to . No it doesnt take much. We have four or five weeks to go. 250 points yesterday. Were sure theyre going to do it in december. We could be two weeks from now saying theres no way theyre raising in december. The fed is a much tougher position. So many people wanted them to theyre painted into a corner. But they also set up market expectations. If you want to keep your credibility at some point unless its a sure sign that things are slowing down. They want to do it in 15. Its equally weighted scales at this point. What if there was a 10 break in the markets. Okay i think we would be looking at it. And some of these market guys think if you think that theyre trying to break the markets so that they dont do it . Im saying it wouldnt be beyond these guys to try to influence. Manipulate. Influence the feds decision on whether they raise or not and all the people that said it wont be in 2015. I have already put them in the wrong column. Youre wrong, youre wrong, youre wrong. And they would all be right. They panicked. They have feet of clay. Theyre in this position because of their own doing right now. It is so much harder. Part of why this happens is theyre still in and didnt get out when they had a chance to get out. Part of the consumer slow down. Any of the weakness weve seen part of it recently is being attributed to the uncertainty of staying at zero. Business people dont make longterm decisions. Who knows about consumers. Whats ailing them . You would think, by the way isnt nordstrom in the northwest . Isnt it cold out there . Thats what we were talking about. Maybe they could zig when macys was zaging. Could be that we shop differently. Yes because everybody is buying apps and. Buying things online. Well talk about that now. More about nordstroms because the stock did take a big nose dive after lower than expected results. Shares down close to 20 . How bad is the Holiday Season going to be for the Retail Sector across the board . Here is rick snyder. Heres the senior retail analyst. So is this a Nordstrom Nordstrom problem or everybody problem . Its a little bit of everybody but more nordstrom and macys and becky said we may be shopping differently. I have one word for you, handbags. Handbags i was going to say amazon. Handbags have been a big category for macys and nordstrom. Michael kors is 4 of overall sales. Thats a function of. Change in buying habit. We had a long cycle in handbags. About 4 or 5 years and nordstrom called out boots. High price point. So you have handbags are high price point. That make mess think there is an issue with the consumer. The high price point items theyre concerned about. But jcpenney and kohls put up good sales. Theyre offering are more basic. Jcpenney was coming off of terrible numbers in declines. So putting up good comps off of bad comps is not as tricky. Thats fair. But youre also saying the high end is going to start to suffer and the low end is going to do better . I dont think its a high end low end thing. Its just a shift in cob assumer preferences. We talked about it high end but the high end he was arguing to some degree was the foreign buyer who is coming to the United States hanging out here at the stores. How much of that is a piece of that . Not necessarily for in ord nordstrom. The bigger idea that the luxury buyer is just not buying . Theyre moving away from the categories that have powered macys and nordstrom comps. And so what do you think is there anything that nordstrom can do . Is everyone going to have to shift their product mix . What does that look like . Sometimes this just happens in retail. Consumers shift and they will shift their inventory. We may go through a year of bad comps and anniversary it and start to move on. How much of this is everyone buying apps or phones or other things as opposed to, this is the fashion accessory, not clothes. Thats a big part of it. Or that theres no new fashion. Thats the other thing you hear over and over again. Theres no new fashion. Theres no new fashion and when we typically come out of a recession, this actually fashion cycle has lasted for a very long time, fashion is usually the first thing to turn because people start to feel better. Im surprised this one lasted as long as it has. People are buying iphones and apps as Fashion Accessories but theyll eventually get it right but the high priced categories are slowing and its hidden some weakness in the other businesses. You mention michael kors handbags. I have a friend that told me something about handbags. You know they go for multithousands of dollars. They might be thousands of dollars. They have a collection is there a new one out or something, maybe its chanel. They come out with something thats rare and some of them cost 10,000. He has a friend that shows him an amex bill every month. No, no, no. We see other people that might have i know you dont have a problem with this because you would cut that in the bud immediately. Theres no way thats happening in your household. No way, right . Yes. No. Is where im going. Theres no such thing as a 6 purse but there is. Yeah. Chanel bags go up in value. Youre interested in art. Now you have to think about handbags. But when someone says handbags to us its like what speak for yourself. Yeah, you probably do know about handbags. You probably have a 6,000 man bag. Thank you very little. You probably do. Do you have one. A murse . I do in the green room, sure. Doesnt everybody in new york . No, mine was a give me from a conference. Is it a messenger bag . It is. Thank you becky. Lets get back to the markets and take a broader look at the futures today. Right now things are flat lining but if you looked at yesterday with the dow down 254 points and the nasdaq down by 61 points and s p down by 29. At this point all of the major indices are poised for decline of 2. 5 this week. Well see where today gets us. Take a look at the early trade in europe this hour. Right now it looks like there are red arrows there as well. Decline of about. 7 for the dax and germany down by even more than that by about. 3 in the cac and france. The ftse in london is down. In asia overnight youll see that the nikkei was down by about. 5 . Declines in china as well. The shanghai composite down by 1. 4 . Oil was the big picture. Down another 3 . But so far this month along down about 11 . Lets look at the bond market right now. The yield is back below 2. 3 . 2. 296 . So maybe doubts starting to creep in about whether that hike will come. Its a lower yield. If you check out whats been happening with the dollar, right now the dollar is up against the euro at 107. 84. Relatively flat at 122. 58. Gold prices at this point look like drum roll please up 1,084 an ounce. And joining us now with more on the where the markets are headed from here is bill stone. He is pnc asset managements chief investment strategists. He is the managing director and welcome to both of you. What do you think happened yesterday . Is this about concerns about the fed raising rates . Is this about oil . I think yesterday was probably more about oil and copper also hit a new low. So i think theres remaining concerns about growth and its slow and we had this back and forth as good news or bad news and right now it seems to me the market is nervous about growth and also that the fed may move and that may have a negative impact. But is good news actually good news and the only thing were worried about is that the fed is calling it wrong because were worried about the demand picture overall. Good news is good news. We want to see an acceleration in the economy but that hasnt happened. Were still at that low rate and also on a global basis. Growth is slow and theres tremendous concerns that china growth may be slowing further. Does that concern you too . Yeah, i think you see at least some part of that augustseptember in here where you are seeing the commodities trend down. You can see it move in a general direction. I hesitate to agree with joe but part of it is the fed that the markets are maybe rioting a little bit. Not that you call this a riot but trying to shape that up a little bit though i think theyll end up going in december as well. In terms of that, if they do raise rates in december, would you two be putting your money in stocks now . Theyre pretty close to benchmark and we have been for awhile. So we pull back aggressive positions. What is benchmark for you . Lets say a 60 40 portfolio were close and holding a little bit extra cash here. As the 10 year gets up much more than it is now id be tempted to buy 10 year bond futures so i think in an overall market where growth is slowing, the Earnings Growth in the United States will be close to zero this year. The stock market is roughly flat so far year to date. If you want to see acceleration next year youll still be looking at relatively slow growth numbers. So theres nothing tempting about stocks at these levels . Would you have to see a pull back of 5 or 10 before this is an attractive entry point. Were fair where we are. Youll be dependent on Earnings Growth but thats fairly slow. This is still a bull market but in the latter phases of the bull market and the returns from here on will be weak. It may be interesting watching the ten year which is coming down in yield. And euro is going back up a little. I dont know. Market is not sure if theyll raise rates. Even if the fed raises rates theres a big issue in my mind about how high rates can get. If the fed raises rates, do you think theyre going to get 25 basis points the next day more in your savings account . Sure. I dont think youll see the response to Interest Rate across the industry in a world where things are fairly weak and also earn a global basis. Our rates are high. Oil can scare these guys. Not only does it scare them if it goes under 40 but they dont need to worry about inflation again and this morning i heard the iea said the supply was really high and then they said the situation could worsen. See i think its the oil producer. Not necessarily the consumers. We like oil. Its not translating into sales where you would expect it. Some of the retailers. But it is translating into auto sales though. Sure. So i do think when you talked about the retailers earlier, the consumer is spending its just finding exactly where theyre spending. We can see the autos and youre right to point out Amazon Online move is definitely there. Theres no doubt. That market cap, right . That has been a zero sum game taking it from traditional retailers and giving it to amazon. And part of what happened is there was a big shift not just in wealth but also in income from younger people to older people. So we have a piece were working on now. Theres been roughly an 800 billion increase in real incomes for people over the age of 55. And those are not the people shopping at the stores. Thats an interesting point. When you talk about where retail is, thats part of it. Theres a big shift in the demographics. Thank you both for coming in. Thanks. Coming up when we return, exploding. Social media exploding this morning about a donald trump speech. You wont believe what he said about ben carson this time. His comments and Carly Fiorinas reaction on twitter. Well talk about it when we return. Plus talking tech, the order slow down that has cisco shares taking a hit this morning and analysts will be telling us if we should be worried about the whole industry. First, take a look back at this date in history. Surprise we heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Theres a network that never stops improving. Thats grown faster than any other, covering nearly every american. And these geese. But its not who you think. Its tmobile. Our new extended range lte signal. Reaches twice as far. And is four times better in buildings. Think you know our lte coverage . Think again. See for yourself at tmobile. Com coverage. Welcome back. Political news this morning. Donald Trump Holding a Campaign Rally in iowa last night and he came out swinging. He used profanity describing his fight to strike isis and also going off on ben carson using his rivals ownords against him calling dr. Carson pathological and questioning his life story. Im not saying it. He said hes got pathological disease. He actually said pathological temper and then he defined it as disease. So he said he has pathological disease. Now if youre pathological theres no cure for that folks. Okay . Theres no cure for that. A lot of reaction. I mean, a lot of reaction on social media. Carly fiorina posting on her Facebook Page the following, donald, sorry, ive got to interrupt again. You would know something about pathological. How was that meeting with putin or your selffunded Campaign Anyone can turn a multimillion dollar inheritance into more money but all the money in the world wont make you as smart as ben carson. Maybe they should have an iq test or something. Lets talk about business news. General motors could become the first auto company to import a chinese made vehicle into the United States. The buick starts planning to sell the mid sized invision suv here next year. Cisco beating on the top and bottom lines but this morning the stock is under pressure on weak guidance. Here to break down the results, the managing director, how long ago was it when sis coe emerged doing a little bit better in the last two or three quarters . Didnt it . And does this indicate another pending slow down globally . Joe, you know, i think that when sis coe introduced a raft of new products about a year and a half ago we started to see really a build up of momentum in the top line in many ways thats still taking shape. We see the switching business for example accelerating over the last two or three quarters as you said and then i think there was an expectation that it would continue to do that into this quarter and into next quarter. The numbers they printed were actually very solid. For switching. For switching. In the software and the services up 36 or so. Exactly. A great number in those but it was reuters, right . Their old stuff. Exactly. Reuters have been weak for three years in a row now. It wasnt that much of a shot that they were weak. They were weaker than expected. The deal that they announced will be pressing it and that will probably lead to a rebound of that business as well overtime but in the meantime we have seen the company sort of take a sideways step in their guidance for the next quarter. Orders in china were much better than in previous quarters. 40 or something but what causes that . Is there back up in at the hand . Well, so china is a pretty small part of the overall stream overall. Its a nice bounce back to have. The brick countries in general grew 11 so after, you know, last year declining for quite a bit. We saw some inflection points that were real bright signs. U. S. Enterprise is where i think the enterprise was. U. S. . U. S. Enterprise macro. Does that mean u. S. Businesses are suffering . We try to figure out everything about whats happening from the American Consumer to whats happening to u. S. Business. Should that concern us on a broader level . Some of your earlier guests also noted and you pointed out earlier that this is usually a leading indicator of cisco of ceo confidence and, you know, spending and youll hear chuck talk about that as well. So when you look at them as a proxy for enterprise comfort and spending in cap ex thats something