Fiveday losing streak yesterday. A lot more fed speak on the way today. Europe got some strong confidence numbers in both the u. K. And in italy, although that italian 10year ticking up yet again this morning. Our road map begins with jcpenney. A potential payout to top execs coming in much bigger than expected. 80 million should a sale to a buyout group be completed. And nike share higher premarket after its Quarterly Results outpace expectations. And on this day in 1993, david faber first clicked on his mick cr microphone on cnbc and the rest is history. I wondered if that was coming. Did you know it was coming . I thought maybe because they sent me a little pin. Did you know that was what happened at ten 20. Oh, 20 thats a fifth of a century. Thanks for reminding me. Jcpenney is offering 84 million shares at 9. 65 apiece. Of course this offering itself someone unexpected given what been a believe that it did not need to raise equity or need to raise any liquidity. Ceo mike ullman conveyed that message to shareholders. We learned goldman would hit the market with that big block sale of stock. 84 million shares. They did not exercise the socalled green shoe. It does of course raise a lot of money for jcpenney toot tune of 84 million. That will be helpful, particularly in what is a seemingly weak retail environment, particularly for apparel. You can see this total debt will be 5 billion. This does go a long way towards calming perhaps some of the fears amongst suppliers and vendors, factors. I should point out on the Positive Side the bonds are up today. Cds is trading better, as you might anticipate. But, guys, theres a lot of questions here, not the last of which is was it misleading . Should the s. E. C. Even take a look and consider market manipulation, false and misleading statements and question whether or not vornado and ackman, the largest shareholders on the board, step off and sold their stock knew this was a strong possibility. These are questions being asked by investors. The New York Post takes ullmans face and puts a pinocchio nose on him. Thats sort of where the optics are on this. The post also has a couple of nuggets about perhaps the equity was a second effort after failing to raise money on second leens with t liens. Listen, this does build confidence, extremely important for does it, though . I think because they have more cash now. Arent people just going to catch up to everything thats happened in the last week or so or almost over the weekend and say, wait a minute, whats going on with this company . I think that is true, certainly confidence amongst shareholders is very, very limited. But as a retailer and your ability to pay them, that does help on that front. This has to be one of the key reasons why they decided so quickly to hit the market. As ive heard, none of the large shareholders have been selling, glenview, soros, perry, have continued to hold on to their stock. Youve got a heavily shorted stock that weve seen at new lows this week with not a lot of shares out. Now you have a lot more shares out. Interesting they chose goldman to do it, by the way, because goldman is the one that helped send that stock down with the report from the credit side. Chinese wall really works. Then theres the issue of mark sweeny, their controller, who according to a filing left on september 20th. That just adds to the drama. If your controller is leaving where is the disclosure . Why not tell us . Plenty of time to make a material disclosure. Without a doubt. Communication has been, as others have put it, misleading. There are a lot of irate shareholders out there. There are those who believe this turn around will take quite a long time, that the company now, if you want to put the Positive Side on it does have enough cash to get it through that turn around and that it will come, whether it be a year from now or even longer, it will come. Those at least are the beliefs amongst those who are holding on to shares. When youre circling a negative 26 comp for the third and Fourth Quarter last year, you would hope you get a little bit of bounce. Everything 24 hours ago we talked about their release, the wording of their release, positive comps coming out of the third quarter. People will begin to scrutinize every word now because the question will be can we believe what theyre telling us . No doubt. Credibility is going to be an issue for this management team. So watching cash levels at jc penney, also watching cash levels at blackberry, reporting a roughly 1 billion quarterly loss, thats in line with the guidance it offered last week. This mornings news comes days after the company accepted its largest shareholder tentative bid, 4. 6 billion to take it over. If the top execs lose their jobs as a result of the takeover, they could walk with with more than 80 million in severance. But the revenue is a massive decline the margins Something Like negative 26 . Minus 24 gross margin. I dont know what you call that. Its gross. Just leave out the margin. They stopped giving submetrics a while ago. They did not do that today african selling the call. The last subquarter we have was the june quarter, which was down 4 million quarter on quarter. Who knows how many subscribers blackberry has right now. I cant remember the companies now in the news this week who are going to support blackberries. When you start to be concerned strategically about the companys future, you start to make those decisions that can hasten the termination of some of those agreement. No doubt. The question there now is where is the value for this company . Is there enough intellectual property and in cash, which is being depleted but is still significant. I continue to have some questions about the ability of fairfax to finance this 9 a share offer, if you will. Remember that was the news earlier this week, the letter of intent can People Finance anything these days . You would say that but i think this becomes a more difficult deal to do, even with incredibly generous credit markets. You needed 3 billion in debt. The coverage ratios would seem to me to be pretty tight in that maybe you get up to four, five time ebidta. Thats 700 million you need to be generated. Thats probably going this way. You need a good equity beyond the 10 fairfax owns, you need to put up a lot more equity. I have doubts they can pull it off. Theyre under no obligation to pull it off. Sweet deal. Sweet deal, as some have called it. Meanwhile, one company thats actually bucking the trend, at least from blackberry and jcpenney, thats nike. Theyre up sharply. The sports, apparel and footwear maker posting a better than expected 38 jump in quarterly profit, stronger demand in the u. S. And western europe offset weaker sales in china. There was sentiment going into the quarter that perhaps their trends were slowing. They were able to pretty decisively put to rest some of the concerns in the overseas market. Shares are up 7 premarket, the whisper figure as we mentioned on air yesterday was lower. So, again, it was kind of a game of lower expectations and easier beat. Futures up 8 . Thats what everybody keys off of. China futures up 3. I think 2 after currency. So clearly the issue continues to be china and growth over there. Growth margin did go up above guidance, which they had previously given which had roughly flat growth margins. Most people are calling it a nice debut as a dow component on the first earnings run. They did reduce their top line guidance, i believe, a bit from what i see. High Single Digits that had been the high end, perhaps with a great headwind from foreign exchange. But in a retail environment thats pretty tough, not too bad. You want the winners. We actually saw some of the halo effect for similar names in the space last night. That will be a whole area to watch the sector. Now lets get to markets generally pointing to a lower open today as a looming Government Shutdown continues to way on consumer sentiment. And michael jones, chairman and chief Investment Officer at river front investment group. Guy, good morning. Good morning. Sam, i think it was last week you wrote cautioning that people were being a little too complacent here. The markets continue to weaken. Do you think theres further to go . I thinks further to go to the down side. A lot of people got the call wrong in terms of the fed and in tapering, maybe they got the call wrong this time, expecting another 11th hour agreement between the republicans and the democrats, especially with us moving into a Midterm Election year. If one party can make the other party look bad, get the blame for the shut down, i think theyll do it. Michael, at the same time people keep saying theyre going to come to some agreement, its going to be fine. How are you guys making decisions about how to allocate capital amid all this . We have to look at the underlying strength of the economy and say what do we know a lot about . We think were pretty good about forecasting earnings, we think were pretty good at understanding underlying economic dynamics. Washington is a mystery to all of us. So i really dont think its wise to set your portfolio strategy based upon the whims of washington. I also think that at the end of the day, the shutdown is not that material. Weve gone through many of those. Its not the end of the world. Its the debt ceiling that matters and the shutdown is only relevant in so far as it makes people worry about the debt ceiling. We think that president obama, for all his rhetoric, does not want to go down as the president who defaulted on u. S. Debt obligations. And so because of that, ultimately a deal will be struck. Hey, sam, after jobless claims yesterday, more than a couple economists are saying theres up side risk to nonfarm payrolls a week from today. What happens if we do get a stopgap measure that kicks the can a bit in washington and next fridays jobs number comes in, i dont know, 200, 220 . Things could feel a little bit different, couldnt they . Oh, absolutely. And i think davids correct that when you look beyond congress and you look to the fundamentals, things do look good for the longer term. Thats why we had elevated our 12month target to 1845 a couple of weeks back. And so if you look back to 1995 96, the last time the government shut down, the s p then jumped more than 10 once a resolution was resolved. Hertz yesterday, ual would make people wonder if the fed saw something that indicates the economy is slowing. Whats your take . Our take is the fed did exactly what they indicated they would do in may. If the economy elevated to the extent they thought it would, they would taper. If it was slower than they expected, they wouldnt. It was slower than they expected and appropriately they did not taper. However, since the summer doldru doldrums, youve seen jobless claims drop fairly appreciably, youve seen pmi surveys all around the world bounce fairly substantially, especially the service pmis. All of that indicates to us that after three quarters of washington being a big problem for the private sector, big tax increases, big spending cuts, obama care, the Fourth Quarter, if we get through this budget crisis, the Fourth Quarter is the Fourth Quarter where the economy gets to stand on its own without Washington Holding it down and thats where we see our acceleration. Well, that will be one i think a lot of people or, michael, a lot of people will still be skeptical until we get through all of the events of next week. Sam, michael, thank you for your thoughts this morning as we wait to see what markets do amid all of that here. Two decades ago, what was going on . Bill clinton was president , Mariah Careys dream lover was the number one single on the bill board charts and david faber began what is now 20 years on cnbc. Jim cramer wishes he was here with us at post 9 today but jim sent along this message for david. David, happy anniversary. I make a lot of fun about the idea that i need your approval. Theres a reason why i am saying that. The answer is because youre the best Business Reporter ever. Congratulations. Wow. Ever. Very nice. Boy, what are they going to say at 40 years . That was very nice. Thanks, jim. More to come, trust me. When we come back, what has all of redmond, washington dancing this morning . And what does microsoft ceo Steve Ballmer have to do with that . Well tell you. Take one more look at futures as we kick off the beginning of this week. 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Sources say he was very emotional, telling his employees we will deliver the next big thing, we will change the world again. We know how worked up ballmer can get. They call this the monkey dance. Dance, dance. Yeah, look at him go thats call selling. Thats selling. Thats previous meetings like the one yesterday. You can imagine why he was i cant imagine why they didnt have cameras. They get 10,000, 13,000 people there. Hes still talking about the future for microsoft that he believes is going to be extraordinarily fertile. But we dont know who the new leader is going to be. Though the journal has a nice look at john thompson, who is leading their search today, says he is not a pawn for bill gates but they gave no update on the surge when he met with analysts a few days ago. They did have a nice slide, guys, that looked at microsoft across all kinds of metrics over the past ten years, profitability, sales and arguably maybe we give them too hard of a time. They have had problems in hardware but they make a lot of money. Remember, going into their results in july for what would have been the Second Quarter, sentiment was running pretty high. This stock was up sharply. We were talking about how they were one of the best performers. They come out, they were down 11 on the earnings miss. And since that time they havent been able to catch basically the sentiment has changed entirely. Then it became about ballmer leaving and what was going to happen next. You had restructuring there and the announcement he would be stepping down. You have the div hike. Nokia. The nokia deal. Its just been uniformly i have yet to meet anyone saying thats a real positive step for the company. And not that theyre calling mulally the frontrunner but that hes actually warmed to the idea of taking this deal in the next weeks. Hes in seattle. Theres plenty of people saying this makes good sense for him hees, hes had a good run at ford, can he turn around microsoft . 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Its the end of the quarter. So theres a lot of things to be planned and done for the end of the quarter and youre going to watch the clock tick down to whether we have a shutdown or not. So its going to be a very tough monday. Im sorry, shutdowns weve seen before. Debt ceiling, this is a new thing. Weve seen it once but somehow now its back. Many argue thats much more important. Thats a couple of weeks out. Do you agree . I think so but the two may wind up melding together. The way it will happen is the republicans have themselves boxed into a very poor negotiating position because the president can point and say youre the guys who are shutting the government down. So they may try as a ploy to offer temperature emergency funding, a resolution that last these weeks or a month. If the president turns that down, he shuts the government down. So they may have to accept that and that would meld into the debt ceiling. I dont expect people to put on big positions into the weekend then. We are in the bizarre position where credit default swaps on u. S. Treasury securities are beginning to move up. The worlds favorite safe haven is suddenly got credit default swaps moving. Well keep an eye on that one. Thank you, art cashin, this mo