Transcripts For CNBC Squawk On The Street 20131015

Reports suggest an agreement on the shutdown is coming along. The 10year right around 2. 71 and europe is up on some of the highest german Economic Confidence numbers in the past three years. Our road map begins with anticipation. Two days from the debt ceiling, day 15 of the shutdown, still no deal on the table. But lawmakers say they are clos closer. A mixed bag of quarterly results. Citi, coke and j j. And blackberry placing an open letter to customers to reassure them, quote, you can continue to count on blackberry. There is some hope of a senate deal. They say theyre getting close to an agreement to reopen the government. The dow coming close to its fourth day of gains. The question is what happens. Listening to david tepper just tremendous this morning saying this is about main street, main street will be crushed, higher Interest Rates coming. But you know what i dont like to hear . These are senators. Its always the senate has always been kind of a convivial place. Its the house that has had such a hard time. Maybe theyve got some sway in the house or maybe there are some in the house to really do think a default doesnt hurt. Tepper is not talking about the banks doing poorly. Hes talking about mortgages. Its frightening. We have some of what they talked about this morning. When you lose your reputation, okay, its very hard to get your reputation back, okay. So when you miss a treasury payment, if you miss a treasury payment, thats not a oneweek or twoweek deal. You dont get it back so fast. It will take years and years and years, okay . We cant afford, we cant take the chance, we cant be monkeying around, cant be playing around. You can listen to at thor. Ive known him from when he saved me from selling some bad junk bonds in 1985. I didnt even know where his politics were. Honest, i dont. All i know is that hes a tremendous visionary about the stock market and the bond market. I know him as a bond market guy. You ignore him because you think defaults good. Im not kidding. You ignore him because you think default teaches everybody a lesson and you starve the beast. I think a lot of people in congress and in the house that feel that way. There may be. I think he echos the sentiments of many people in the Financial Services company. But well see whether that cry is heeded by that group of people in the house of representatives if and when a bim gets to them and gets out of the senate in the next 24 hours. Is there a legitimate business person who thinks this is good . No, no. Theres a debate about whether its actually possible to default, theres a lot of debate about that. Or what the deadline really means or what happens if we krosh that cross that threshold on thursday. I know four ceos who are democrats. Absolutely. Ive had a thousand ceos on air and i know four who are democrats. Name me a republican ceo who is not a banker because people hate bankers. Jaime dimon talks about being hated. It was kind of an existential moment. Its not clear to me theyve been completely silent. Howard schultz is absolutely in there basically saying, listen, this is bad. Hes not saying, howard, you could say arguably hes a democrat for some of the positions he takes. Hes for civility. How Many Democrats are being called up by walmart and target . Why doesnt the ceo of walmart and targets and say, we got walmarts in all of your areas and were going to lay off people. We dont know thats not happening. Why are they so quiet . Youre saying if it is happening, should they make it public . Right. Maybe they dont want to. Theres benefits to trying to make it happen. I havent talked to mike duke. Mike duke is a reasonable person. How could he ever want a default so that people who dont get their Social Security checks . P i sure he does. Its a little insane to play with this thing. Like whirlpools action yesterday. The channel checks, people are blaming on uncertainty about the shutdown. You think thats real . You think americans are tempering their economic behavior because theyre worried about a shut down or default . Come thursday theyre going to be real worried. If you ever hear that your social theres 80 million checks that could not go out. The idea of prioritizing. By the way, i have a payment due. Apparently they havent even prioritized. Larry lindsay in texas apparently seems to know the treasury has not gone through that exercise in even figuring out how would we do it . Which takes a while. They havent done it. Whats interest, whats principal . We pay back the 5year and dont pay the 10year . Tepper is smarter than most every person ive heard on tv and hes saying its a disaster. Again, i come back to there are people who want a disaster as a wakeup call. Theyre saying we need a disaster to prove to the American People we need business. The American People are like, hey, listen, wheres my check . Meanwhile, the markets keep going up. Want to sell and have them make an agreement the next day . Why should we be near the highs . Is there something thats happened in the einterim . People feel theres going to be a deal . I dont know. I dont get a Social Security check. Its not going to directly impact me. Not yet. But whats sad is you have a mortgage whats sad is some lawmakers probably do want a huge selloff for the political cover would give them to make a vote. I dont know if anyone in washington seems to own i know they do tradesider trading. What we have to do is shut down the government in order to be able to cause tremendous pain so that when we reopen the government, theres tremendous pain because we need tremendous pain. I dont know. Wheres thomas payne . Alexander payne. Remember hamilton . Remember lincoln when he talked about the national dealt bt whe went bankrupt . Theyre probably resurrected. We could use their help. Fords theater, right back. Honestly, i think if you actually sat down with some of these guys in congress, they would say you know what . Its about time that people didnt get their check. Its about time we put our feet on the third rail. I dont know. The third rail is very frightening to me. The rats seem to be immune. The rats are all over it. Theyre immune. Or do they jump over the third rail . Lets move on to things we at least can accurately analyze instead of washington. The survival skills of rats. Moving on to citigroup. They posted Third Quarter results that did meet wall street forecast, hurt by weaker income revenue, cocacola, 54 cents a share and Johnson Johnson raised its full year guidance. There we have three of the Larger Companies in the United States of america. City did come in a very bit below the earnings estimates and fixed income does seem to have slipped a bit, banking revenues down 10 from the prior year. That was not a great quarter. Not a great quarter in terms of fixed income trading, which we can see as a delta on terms of better or worse whether it be morgan and stanley, goldman sachs. Almost a year to the day of corbat being named ceo. This is a Good Opportunity to sell that box to somebody. Who is going to buy that box now . It would be a Good Opportunity if they were 60. They had an opportunity and they missed the window. What about the other names, coke and j j . I told you goreski. I got a man crush on him. Brees i got a man crush on. Whom youve been worried about. Cocacola was not as horrible as i thought it would be. Could have been worse. Could have been much worse. I thought cocacola, the whisper was basically that people had all switched to pepsico or they were not drinking. They deliver a number that was subpar. Great quote from the ceo. Identify we remain consistently discontent. How about negatively content . What is discontentivism . Somewhat dominant . It has been the second worst performing dow name in the past three months. This evenin things like alcoa had come out and not said good things. Alcoa said can volume is down. Cocacola is an american company. Youre not going to be able to stick a fork in that company. Its too good. Management is too good. Its interesting to look at the quotes from the ceos. They think about them a lot. Citis was we performed relatively well. Things were challenging, what we could control, we did control, particularly costs is what corbat had to say. As for your man gorski, he talks about achieve are near term priorities while advancing longer term growth drivers. Thats what happens when you deliver good numbers, you can say positive things. Gorski the beat is not as good as it was last mercks in summit, new jersey, and theyre closing the headquarters. You know, if mercks like a plane where its one engine, its doing fine, three engine go down, fourth engines still doing fine. What is going on at merck that so many people, including loyalists of merck have been downgrading it . Im worried about merck. Im not worried about gorski and j j. Is apple looking to focus more on luxury . The tech giant adding the ceo of berbury. And victor cruz, well talk to him later this morning. And were keeping all eyes on washington to see if we get any kind of a deal. Back in ament. A minute. Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthCare Insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. 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They hired denev from yves st. Laurent. She did a runway first show on digital. Shes very much into if you tweet season about b somethin about burberry i went to buy a couple of ties and for the first time in my life i went to the counter and said, no, im not paying that price and i walked away. That is hugely expensive. So is apple. But theres more utility. If you spill salad dressing on a tie, see you later. Hey, i love the show, hey, i cant afford it. I was mortified. People behind me i was denied a kohls credit card once and that was also very mortifying. But burberry is very expensive stuff. Shes a uniter of culture, she used the chat are platform. Salesforce. Com, thats what you should think of. I want to see what shes getting paid. Take a look at those ties. You would not believe how expensive. I bought a jacket there, a nice black rain coat. We get our ties. Its embarrassing when you get to the register and you realize come on. Theres not a lot of bargaining. No. Cramers mad dash is next. One more look at futures this tuesday morning. Squawk on the street from the nyse straight ahead. We provideu can rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered Security Solutions keep your Information Safe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Shining star, no matter who you are. All right. Were seven minutes until the opening bell on tuesday. You werent here yesterday. No, i wasnt. By the way, net flirks was up yesterday on news there are at least some talks preliminary talks about including netflix on the cabletop set box. We did hear shining star by earth wind and fire. Do you remember the song reasons. I give you a reason to buy netflix. They are doing new series with sony. Thats all it takes . Sony is going to make original content for netflix. Theyre on the settop box. What more do you need . You dont need anything, septemb except to see theyre up 250 this year. Even if theyre a terrible series . Suddenly youre a critic. Everybodys a critic. I havent seen the orange one. It apparently gets better throughout. Im like episode six. They have the big first major studio. House of cards and orange the new black remember dreamworks said last week patron saint. I believe disney is signaling they might be doing something. If they are on the cable boxes, you get a much higher subscription rate. Stocks went up as the day went on. You wonder about user base pricing. Whenever the deal is announced, im taking price target off. Talking about hog, were not going to talk harley but tesla. Heres what im hearing about tesla. People like the new car. This is a survey. Theres a survey being done and it basically says that, wow, i mean, the tesla x, 70,000 to 90,000 estimate, people will pay it because well, theyll pay it. The stock is up 446 . Its up 446 this year. All my life i have watched you. You have never, ever, ever allowed the do you not understand the facts should not get in the way of the story. I met you 20 years ago, the facts, the facts. I know, i hate that. It was misplaced there. Is it misplaced there . This is review to earnings. The other one is sony to earnings these are cults. These are the two cult stocks. When it goes hold to buy, people say they must know something. My daughter actually came to me this weekend and said she wanted to buy a tesla. And i said if she graduates with college with all as, summa cum laude and gets a fantastic job at goldman sachs, i would consider it. Its negotiable. We have a lot of stocks to keep an eye on, including goldman sachs. Buy a tesla, are you kidding me . Opening bell just minutes away. Get ready, another big day coming right up. Squawk on the street back after this. [ male announcer ] this is claira. To prove to you that aleve is the better choice for her, shes agreed to give it up. Thats today . [ male announcer ] well be with her all day to see how it goes. [ claira ] after the deliveries, i was okay. Now the ciabatta is done and the pain is starting again. More pills . Seriously . Seriously. [ groans ] all these stops to take more pills can be a pain. Can i get my aleve back . For my pain, i want my aleve. [ male announcer ] look for the easyopen red arthritis cap. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. On the street, live from the Financial Capital of the world. The opening bell set to ring in a little less than a minute. We await a deal from washington. Still from grumbling from the house side. Well see. What do they want . Apple will open close to 500 people like a retail strategy. Heres someone who has developed the premiere social Digital Mobile strategy in retail. I dont think this is a reflection on the product. It may be a person who can get in there and shake things up social digitalwise. That there is the opening bell. Look at the s p at the top of your screen. The big board ishares, core etfs. Very good company. Ive been recommending that stock for some time. Very nice. Fedex did this buyback, by the way. We have not mentioned that, 32 million shares in addition to the 7 million. Its up 1. 70. That could be very meaningful. Csx is on tonight at 4 00 on closing bell. You need these transports. It does matter. Intel and yahoo will be a big part of the conversation. Marissa myers is going to take some questions from the public on the call. More questions about when does she grow revenue, when does google go public, whens did alibaba take some shares . The momentum from alibaba and the increase in that company, shes getting a lot of time because of that. Thats been reflected in the stock price. They could run in place in that alibaba since this were at 17, youve been telling me that could be a big deal. They could be valued at 100 billion, a large percent is held by yahoo 12 will be sold. But theyre going to hold another 12 . If its 24 billion of value on yahoo s Balance Sheet go short yahoo and long alibaba . Youre getting it at an extraordinarily low value. People say strip out alibaba and youre left with a core business that still will turn around. I am a believer in her, im a believer in the initiative shes putting in. I think shes going to show some growth. I think this is a company that never lost its page view count and i think it can take some money and really do some amazing things, maybe do some buying. I know you said twitter in terms of the size was put to shame. But if they could develop something competitive to twitter, you need twitter. You need a twitter philosophy. You do. Well, you have it. Its called twitter. Yeah. Its very difficult. And some of the reporting thats been done on twitter at the times this week shows how its a mix of luck and serendipity and skill. Its very hard to just strategy a twitter. Well, on theyve made it a science, more of an m. I. T. Approach, more of a science approach. I like the site. I like pictures of cats. Or lists of topten things. Theres a piece in the Washington Post today about why cats are so moody and why its so difficult to have a real relationship with the cats. Thats why the cats and i get along. He reads every part of the paper. He does. Did you read jamie dimon was innocent until proven guilty. J j is leading the dow. Your man gorski getting it done. Hes for real. I think this is the big farma stock with growth. Think about it. How much a ceo does matter. Interesting because pfizer is underperforming. And merck. I cant think about amerimer. They cant figure out even where to put their headquarters. Youll have a fullpage ad, blackberry pleading for patience with not investors so much as users. They say you may have read the headlines, blackberry is not for everyone, we have substantial cash on hand, no debt and we continue to work what we can in the way of security and mobile. Its kind of an interesting plea, right . Were not going out of business, stick with us. Its a whole new rap. Hey, were not dead yet. Were not dead yet. Were not dead yet. Thats an interesting theme. Its a catchy thing. Like be all can you be. Were not dead yet. Diamonds are forever . Hey, maybe were not forever but were okay. Kind of a theme. Trying to hang on to something as they try to sell the company. Well see how that ends up, too. I think they could develop a thing of Something Like that. Reach out and maybe we can touch you. Or maybe not. I think a little tepid, right . Id walk a mile for a blackberry. Really . Yeah. Blackberry tastes good like blackberry should. Its a fruit thing. Didnt they band those advertisements . Yeah, but they stick in your head because of mad men. Microsoft did get an upgrade. Jefferies takes it from buy to hold, providing greater transparency. I want earnings, they want transparency. Whats the matter with earnings . You want earnings or transparency . I want earnings. Real teearnings so i want transparency and earnings. I dont want to see the boxer, i dont want the kim ca kimono to be open. Geez. My parents were in retail. My father always had to work christmas because of Stores Running out of bags, hed have to run bags to them. But he never worked thanksgiving. Tough day to work. Plus we got this apparel problem generally speaking in retail that we havent figured out or they havent figured out. The sales are you could walk into a lot of stores now, 25 off, 40 off. You shopped . I did do a little shopping. I bought a few pair of pants. Slacks . Trousers. I wont say wear but it was 25 off. Sometimes hes got pants that dont match the jacket. Thats called two suits. Giving away all my secrets, man. At least i got pants on. Be thankful. Versus the transparency of microsoft. Exactly. Lets get to bob pisani. Good morning. For all of the major sectors here, buying not very heavy. We had very light volume buying. A lot of comments about that deal. It looks like its sort of status quo but a lot of people in the retail area are worried about kicking the can down the road into january and february deal. Remember all those discussions about the fiscal cliff fiasco and the delays of sending out the reevened checks and walmart saying it was really tough because refund checks werent going out . Thats the concern that people have right now. Put up that full screen. Setting up the showdown up to january creates that worry that tax refunds might be delayed again. One retail guy very big in the retail area said it could be horrible for christmas sales. He said people rely on that money and its imminent no deal will get done, theyre not going to buy in december. Let me talk about the stock market leadership. I was very happy yesterday to note the russell 2000 historic highs. If you look out there, theres very few new highs throughout. Yesterday 184 on the nyse. Theres 3,000 securities that trade here. Look how long its been since big cap leadership has hit new highs. Ibm popped out in march. Mcdonalds and at t popped out in april, exxon mobil in may and july. I would like to see some of the big famous names hit new highs in addition to those small and mid caps. Walmart, today is their investor day. I want it hear about any numbers theyre going to introduce for the next year, earnings estimates. The analyst estimates are like 10 higher than this year. Ill bet theyll be a little more conservative. Walmart was down yesterday. No ipos down here today but were going to get a big one tomorrow and i mean the biggest within of the year, believe it or not. Plains gp holding, ownership of pipelines is floating a 3 billion ipo, far and away the biggest of the year. The second biggest one last week was antera, that was also 1. 5 billion. So these things are very big. A lot of these guys have 5 and 6 . Thats an anomaly, a low dividend. By the way, viva is also going to be pricing over at the nasdaq. Buy yof sciences as well as cloud computing. Theyve already upped the size of that particular deal. Finally solar city, elon musk company, theyre going to do a secondary and weve had secondaries all over the place in the last couple of months. Secondaries are on fire once again this year. Ill be here talking about the plains tomorrow, they go public. The house gop plans to push a separate bill to raise the debt limit, to do an end run around any senate deal that comes their way. Really horrible. That could be the Nuclear Option. I cant believe theyre doing it. Thats not good. Listen, its tuesday. These things take a little time. We dont have time. Right. Conceivably or else maybe we do and thursday doesnt really matter and it will be friday and we get something by friday or saturday. They need to be on meet the press and beat each other over the head. This is very bad, the republican if you want a deal. I get people that say, hey, who are you to want a deal . Who are you to want the markets to do well . I dont know. I im a guy who has talks with a lot of people who own stocks in is a very bad thing if you want a deal. If you want default, its a good thing. Its a very good Nuclear Option. If people want default, this is the way to go. Darrell issa saying its a way to seek a delay in the medical device who cares more for j j. We dont have a transportation or farm bill or energy bill or anything out of congress. But you know what we do have . We got a lot of oil in this country and a lot of natural gas. If you want a good news story, some environmentalists might argue with it but if you want a good story, it is our increasing ability to provide our own resources when it comes to energy. And jim and i have talked a great deal about this when i was in texas last week and had an opportunity to talk to a number of people down there, many of whom are in the oil and gas business. Jim, youve talked a lot about pioneer and the promise of that company. You spoke to the ceo i think it was last week. Largest oil field in the country. Second largest in the world. I think the stock should be up another 100. I did have a chance to speak to will van lowe, private Equity Partner who invests largely in upstream deals and i asked him specifically about whether in fact pioneer and its find is for real. When you look at how big the Permian Basin is, its substantially larger than the eagleford and bachan. A lot of the future oil growth will come out of the permian. So youre a believer that pioneer is for real in that . They are. Theyre sitting on an amazing position there thats really not replicable. They never tell you how your hair looks, by the way. Sorry about that money. Could have used some oil and vaseline. I could have used some permian basis oil. The second Biggest Oil Field in the United States, accessible by the many different wells that pxd is drilling, bigger than eagle ford. Now theyre going back and finding a lot of this they can get to through fracking. They bought all of this land from majors, who didnt think it was there. The majoring continue to demonstrate very little ability to harness america technology. Sheffield does not impress my me as a blow hard, i think hes for real. Its very nice to hear someone else not from the Company Agree with me. Its bigger than anything in russia, bigger than anything in kuwait. We always forget, this is a Technology Story as much as anything else. We talk so often about Silicon Valley and the advances there but this is technology also. Its midland odessa, everybody in the world ask get a job at that place. Everybody had written it off. The word is it is gigantic. Eog that has the delaware basin, i dont think its as good as this. Pioneer natural, if you believe that, you know the stock is 100 too low. No ones talking about it. Its a small company. Litz get to eamon javers in washington. Reporter Republican Leadership confirms to me House Republicans are going to move their own bill here at some point later on today. This is something you guys have been talking about based on previous reports. Im told that this is the way the bill is going to be structured. The bill will delay the medical device tax thats part of obama care for two years. Its going to install Income Verification for some of the obama care subsidies so the government can check and see the people have the income level they say they have. And it will have language that will cancel Health Insurance for subsidies for members of congress and members of the president ial cabinet and the debt ceiling will be lifted until about february the 7th. Thats the structure of the proposal the House Republicans will move. Thats very different from the deal being cobbled together on the senate side. Now we have clashing house and senate here going into the final hours of this debt ceiling showdown. The question is which chamber will prevail here. Republicans in the house seem not to be ready to give up at this point and accept a senate deal on its own terms. Theyre still pushing for more, guys. Why would mcconnell float certainly that he didnt think boehner could deliver on on his side . Why is that not happening . Thats been one of the questions with the senate deal since they started to cobble it together. Mcconnell can sit down with harry reid and cobble together anything he wants, but if it doesnt have the votes in the thousands pass, then its a dead letter. So the question is will speaker of the house john boehner ultimately accept the mcconnell proposal and is this bill theyre working on today in the Conference Meeting, this going on right now, is this sort of a last attempt by House Republicans and theyre going to ultimately cave to the mcconnell position or is this the House Republicans saying, no way, well go this far and no further. Thats the brinksmanship weve been receiving all along in this entire debate and were continuing to see it here. It does bring in mind what congressman labrador says in the post. He said the problem with the senate republicans, they always want to have the fight next time. I study these medical device companies. Do they know what they are . Is this what the republic hinges on . Its absurd. I watched some of these medical company stocks. Dominic chu was reporting the stock prices of the company affected by this medical tax were going up, id and down ways, they didnt know how to react. Is it in . Is it ou . Where does it stand . So it looks like a vote eamon . I imagine if the Republican Leadership is voting for it in the house, they have to send it to the senate and you have to imagine Mitch Mcconnell is not going to receive it with open arms. Its just obama care. Medical device. Hey, boston scientific. Cutting numbers, u. S. Government. Raising numbers for medtronics. Downgrading the American People, upgrading right here, j j because of the device. How stupid. Do they even know this stuff . Do they even know it . When we come back, the executive chairman of jarrodin. Jarden. The dow is down 64. [ male announcer ] the new twin turbo xts from cadillac. 410 available horses. Room for four. Twice the fun. announcer at scottrade, our cexactly how they want. 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Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. Trying to digest a bunch of earnings. J j, coke and citi. House Republican Leaders trying to push their own bill to reopen the government. Back in a minute. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. But at xerox weve embraced a new role. Working behind the scenes to provide companies with services. Like helping hr departments manage benefits and pensions for over 11 million employees. Reducing document costs by up to 30 . And processing 421 billion dollars in accounts payables each year. Helping thousands of companies simplify how work gets done. Hows that for an encore . With xerox, youre ready for real busine six in 60 with jim. Lets get to slumberer. I wouldnt sell it. This is a rocket ship. Web bush making a lot of big moves. Comps trading above expectations, a good story. Directv. Price target up. Citi says this is the deal. I dont want to by directv up here. I dont. F5, piper likes. Yeah, this is a company that has missed a quarter, missed a quarter. Finally dpz. People saying the martins werent that good. This stock has had a history of sell offing lately. I would not bet against dominos and i love the app. It is a Technology Story, too. The app is a great app. Whats up on mad . Testify oivo is doing busine netflix. When you see netflix being part of every single part of your living room, you say to yourself theyve got the strategy. Tivo, people still love. See you tonight. 6 00 and 11 00. The house gop set to speak in a few moments. Well get that live when squawk on the street continues. Low t treatment. Axiron can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. 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You are about to look at a live shot at washington where house gop leaders are supposed to have a conference after a meeting this morning saying they are going to float their own bill, with a medical device tax delay, as we get within 48 hours of the debt ceiling expiration, the exhaustion of the borrowing power of this country. Its going to get interesting. Stocks down about 36 points. Maybe complacency, maybe this is an attempt for the gop to say to their base, we tried, weve done everything we can before they finally do give in to a senate plan. Were down a half a percent. We doubled our losses on the s p and now were back to where we were prior to hearing the house had this competing version. The market, complacency perhaps some would say or rightly assuming theyre going to get something done. That open question as to what the conservatives within the house the house within the gop are going to do, there was a question as to even if the bulk of the party agreed to the senate, whether they might gerrymander through another 48 hours and then hit the debt ceiling. There are still many questions in the air and its difficult to know whether an alternative plan takes you forward or backward. John, help us read between the lines here this morning. Carl, my read is the same one that you just mentioned a moment ago, which is this is the attempt by john boehner to manage the anger and concern among some in his base who have been calling the senate plan to s surrender saying well lift the default, but that has no chance of passing in the senate. The speaker would be able to say i tried your way, didnt work, now im going to put it on the floor. I think this is an attempt at Coalition Management by john boehner. There are some viewers who wonder why is it the house members are the only ones who have to compromise and give in . The house members are the one who is had the irrational demands that had no chance of passing in the first place. The house and Senate Leadership realize that plan that cruz and the house taken Party Members had no shot. You see a wave of commentary now from republican policy people, former bush people saying this was crazy, it never had a chance to work. As mike gersen, the former bush aid said, now the challenge for the gop is to stand up in front of their members and say two plus two equals four. Thats the reason the house has got to give in because their initial demands were so off the charts. Howard schultz, the ceo of starbucks was on the show friday and he said people are crazy if they celebrate what turns out to be a shortterm solution. How shortterm is whats on the table at the moment . It goes until january for the funding of the government, at which point presumably it would be replaced by a longer term deal, the debt limit would go to february 7th. So then you say, well, are we going to be back in the soup again in early january, late january on the debt limit . And the question is is the president s gamble, that is to say we are going to try to break the fever of this kind of shakedown negotiation on the debt limit going to work or not . We dont know the answer to that. I think he hopes so. The white house hopes so, but nobody can be sure whether in fact hes going to succeed. Surely the very strong indication goes with the fact they created the sequester, a Nuclear Option that would have to be diffused further down the line and both sides would have to come together because it was so terrible and ultimately they couldnt diffuse that. Yes, but the sequester was a much lesser problem than a debt default. The dealt default could take the economy. A sequester hurts certain constituencies, according to ben bernanke, it holds back the economy and doesnt achieve the president s goals or other republican goals but it p its not a catastrophe for here and around the world. John, give me a timeline again on the next few days in terms of votes, probable votes, when they can happen and whether they can get all of this done i would predict, david, that the Senate Passes their bill either tonight or tomorrow. It would quickly go to the house the house i would assume would pass its bill today. They can act very rapidly. Theyre not bound by the sort of procedural obstacles that are in the path of senators. But Mitch Mcconnell has told harry reid that if they get a deal, they will try to expedite the procedures. It will be up to ted cruz and mike lee, the two senators who led this effort, to see if they want to try to drag it out and use every lever at their disposal. I would expect it to pass the senate by middle of the day tomorrow, go to the house and at some point very close to the witching hour, i would expect it to pass the house. No predictions on what cruz and lee might do at that point, john . You know, cruz the desire by republicans to stop this selfinflicted bleeding is extremely strong right now. The anger at people like cruz and lee for what they have put the party through, you look at the poll numbers that came out last week, they were horrendous for the Republican Party. I think theres going to be an awful lot of peer pressure. Now, these guys might not respond to peer pressure but sometimes when the sentiment in the caucus is so overwhelming people give and well see if they do. Okay, thank you. We want to bring in our panel. Do you agree with johns line of this being Coalition Management . I think the jurys still out. The House Republicans are basically agreeing to kick the can. What theyre disagreeing with is the cost of the down payment to kick that can. I mean, what were going to be back in the soup because the broader deficit reduction talks that will be due by dooet 13th, unless there are Enforcement Mechanisms put on that, youre never going to get the grand bargain. Youre telling House Republicans, guys, trust paul ryan, well get a really good deal by december 13th. Thats into the going to happen. So when you get back into this fight in january, youre going to have a lot of very angry republicans with a lot of buyers remorse for the deal theyre going to pass probably by this weekend. At that point if things go the way we think, secretary lew will not have some of the wiggle room he has this time around. Does that make you more worried about equities or about the economy or both . Not so much the economy, carl. Weep know this has a negative impact on Economic Activity the longer the shutdown continues. But given the fact that we know the furlough workers are going to get back pay for the time off, can you see a consumption splurge coming up again. That will help to reignite Economic Activity and recover what is lost. Whats continuing to spook the market is if we continue to move from fiscal event to physicfisc event, im concerned for the more shortterm basis. Thats the most discouraging thing for me from an investment standpoint. If we get some fiscal clarity, i think investors would wake up to the fact that risk assets ought to be a very rewarding experience but are going to be held hostage by the votes that are going to be upcoming in the senate and the house. Chris, a lot of people around the world will feel that americas creditors are the ones being held hostage at the moment. We come very much from a market standpoint, we come from an International Financial community standpoint. Do you think in that context in that context that the president as commander in chief has done enough to ensure the Good Standing of this country through this process or do you think he has perhaps been too bogged down in Party Political things . Look at leon panettas comments this morning, obamas former defense secretary saying the president needs to have a Stronger Leadership role in this. Whats lost somewhat, too, with. Sort of fixated on the debt ceiling, the governments in its second, almost third week of a shutdown. The president had to cancel that trip overseas where he was supposed to have facetoface time with vladimir putin, the chinese leadership. The president tried to bring the leaders back down to the white house yesterday, cancelled the meeting at 3 00 because they didnt want the president involved, sort of blowing up the deal. The president and Congressional Republicans have such a poor relationship that quite frankly, its probably been a positive he hasnt been terribly focused on these talks, letting the Senate Leaders work on it. How it all comes together remains a bit of a mystery. Ordinarily on a day like today we would be talking about coke and about mortgage originations at citi. Yesterday we saw harsh action at whirlpool suggesting consumers are tempering their purchasing conditions and then that live shot in d. C. How is that going to affect gdp in the Fourth Quarter . Its going to have a negative attribution of gdp in the Fourth Quarter. Thats what im most concerned about, im worried about the impart that this has on confidence, not just among consumers but Business Leaders as well. We had actually seen an uptick in Business Leader confidence that was encouraging with leading to the prospects of continued business spending, which has been largely absent for the economy and could be an economic driver. And the consumer we know has been remarkably resilient. We continue to think that their Balance Sheet that has been repaired through due to Financial Assets increasing, leading to alltime highs in net worth, aggregate means its beneficial to the wealth effect. Any kind of deterrent to thwart that could lead to negative results possibly leading in the first quarter. Understood. Guys, thank you very much for that. Apparently the house gop leader is going to take a little longer than we thought. Gold did get down to 1251 this morning when it looked like a deal was going to be a little bit smoother. It has bounced back to 1270. Well keep an eye on that and g get you out to watch after a commercial break. Dont go away. 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To introduce a bill that would delay the medical device tax for two years, somewhat different than the senate plan that we were expecting, clearly is trying to cram in a little more activity here before we reach the debt ceiling expiration on thursday. The market, guys, appears to be finding equilibrium so much it can decide whether to go right or left, down 21 points on a day where theres a lot of corporate news, too. You still have the fundamental belief theyre going to have a deal before they hit the debt limit on thursday. That still remains the fundamental view of most people, otherwise wed have chaos, if they thought it would be a completely different situation, people taking a couple of days. I think if it looked like we were really going to breach the day in question. We should point out the nasdaq having a positive day dey thus far. Apples up, googles up, facebook, microsoft, tesla also up about 5 . Jim cramer mentioned earlier a Brokerage House did a survey. They took a survey and found that 20 of respond ents would be absolutely willing to drive an electric vehicles and a lot of them would be willing to pay a 5 premium for fuel economy. The discussion is going to be largely political, john. Theres various points about how the closed Conference Meeting went today. Any color on that . Reporter not yet. Were going to wait for republican members to come out. Staff has come out. They were kicked out of the room so members could confide in one another but we havent seen the members come to the mic yet. The bit about the medical device tax, john, is that is it considered a wedge, where if they win a victory on that, a delay for two years, they can argue for more down the road . Reporter well, the reason that the white house is resisting that provision and democrats are resisting is not because they care about the medical device tax, they dont. Its just 3 billion a year in revenue. But if the president is trying to make this argument that hes going to prevent ransom demands at the time of the debt limit, hes going to try to hold this provision. The other provision to take away the socalled exemption for staffers and members of congress is mostly a fake p. R. Kind of amendment as republicans members will tell you privately. What happened was during the passage of obama care, senator grassley trying to defeat the obama care put in a Provision Requiring people that members of congress to go into the exchanges. And the way that the law ended up getting written in the end, it appeared to deny the ability of staffers and members of congress to keep the health care from their employer that everyone else who worked for a Large Employer had. John boehner worked with harry reid to try to preserve that the ability of those members to continue getting the employer contribution and so this is more of a gimmick and a p. R. Device as opposed to a serious legislative proposal. Those subsidies would be taken away from members of congress and only from them. This would be the only ones staffers as well. They would be the only ones who would not be allowed to preserve their employer contributions the way people who work for nbc or other Big Companies do. Right. Hard to believe were actually talking about that level of g n granularity with so much at stake. Well be right back. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Welcome back. Were getting some movement outside of the meeting of the House Republicans on capitol hill. Theres more people coming out. It would appear that the meeting may have broken up. Obviously we are awaking Speaker Boehner detailing exactly what that section of the party or the gop is going to do in the house as the senate works on its own compromise between the both sides there. So you have conflicting plans potentially coming through. Bertha coombs is with us who coverS Health Care for cnbc. Where are we now on the provisions on the counterarguments from Obama Health Care . There is the 63 Additional Charge per person next year be delayed . That fee is for reinsurance, which is part of what is helping mitigate the risk for the insurance. Two of the insurers who have the biggest exchanges are aetna, surprised a lot of people, 16 of them are on the federal exchange in 16 states and then also well point with the blues, which is on 14 states. So if you push back, theres some talk about pushing back that fee. Carl mcdonald said if you just push back the fee for a year, just the fee, thats good for insurers because they get the risk protection. If you push back the whole program, that could be difficult because that reinsurance helps mitigate the risks of people with very high claims who come on the exchanges. A lot of these people who are rushing on are people who have preexisting conditions who are really very anxious to be insured quickly. You might expect movement in some of. Device makers. Its not happening today. Maybe just exhaustion, policy exhaustion or waiting for the news before you make a move . I think investors have heard this now for a couple weeks and the device maker tax has been out there as one of the things that they might push back, that at this point it hasnt really gotten so much traction and it seems these talks are so fluid, a lot of people are taking a wait and see. We should also be clear your fundamental assumption if youre in the market is that obama will reject it, because that is the promise thats on the table, that hell use the veto. That stays a working assumption as it goes through this the process . The idea is the white house wont negotiate through the process but perhaps later. This does impact a lot of people, a lot of folks who need knee replacements, hip replacements, every time you have one of those devices, it taxed and its already being collected. That helps pay for obama care, helps defray the cost of the subsidies. But it does put a lot of increase on people who dont necessarily benefit from subsidies. We continue to talk about the technical glitches with the web site and i think were going to discuss more some of the Lessons Learned from part d. Has all of that been sort of part and parcel with the expectations of a roll out of a program of this size . It was clear there were going to be problems because they had a very, very tight time frame, it was a very ambitious project and it was much more complicated than anything on Medicare Part d. The scope of the project and that its so intractable is surprising. But now that were hearing about the design flaws and execution of the architecture itself the requell kwe is whether they can get this working properly and get a real flow here within the next two to three weeks. Theyve really got to start signing up people in the tens of thousands a day if they want to reach that metric of 7 million uninsured by the end of next march. Speaking of which, lets bring in the lead of new yorks health exchange, which has been signing up folks by the thousands, not without some hiccups. Donna is the executive director of the new york state of health. Donna, appreciate your time this morning. Thank you for having us. How would you characterize as candidly as you can the early going . Things are running smoothly here in new york. We have signed up just a little over 100,000 people for low cost, comprehensive coverage through our marketplace in just the days weve been operating since october 1st. Donna, those numbers are impressive that people have gotten through the system, although ive talked to a couple of people that are still having problems getting all the way to get their accounts and actually look at plans. Can you give us an indication of how many people who have made it through the enrollment have actually signed up in plans and are actually enrolled in insurance . All of the hundred thousand people have received an eligibility determination so they know what theyre eligible, they know if they qualify for Financial Assistance in the form of tax credits. Many have gone on to look at the health plans and make that decision. The federal government said theyre going to wait until november and report it monthly. Are you going to go along with that calendar. Were accumulating the data now and well have a regular calendar available shortly. Donna, can i just doublecheck on these figures that you have, just as a kind of a rough rule of thumb. We had i think 1,700 that were completed in connecticut at the beginning of the week, you seem to be a whole different order of magnitude or are you saying of the hundred thousand that have registered, maybe 1,700, 1,800, 2,000 may have completed . No, all hundred thousand people have completed their applications and been given an eligibility designation. Your exchange appears to be working better than the federal exchange. Are you satisfied youre ready for the crush of people that are likely going to want to enroll for january 1st coverage coming in the next month or so . We are. Weve quadrupled our Processing Capacity and made it much more efficient. We continue to get feedback from consumers and we look at any way we can to enhance our web portal so consumers have a better experience. We also have our Customer Service specialists who have talked to over 47,000 new yorkers and provided them with assistance through phones and we have people throughout new york state, about 5 hoon people. What have you done to make it simpler and unclog that bottle neck. Weve identified some places in the application where consumers were waiting simply a little bit too long. Some consumers have identified places in the application where it would be easier for people to follow. Are you getting the sense this might be hard to prove but do you get the sense that consumer decisions about whether to enroll or how to enroll is being buffeted by what theyre seeing in washington . Is this affecting Health Care Consumer behavior . We dont think so. From the calls that we receive and all other indications are that new yorkers are very interested in the Affordable Health coverage offered through our state marketplace and well continue to work with them every day of having them enroll on january 1st. Donna frescatore, thank you for coming today. We are waiting for john boehner and other members of the house gop to begin talking. Well take a quick break. Squawk on the street will be right back. [ male announcer ] eeny, meeny, miny, go. More adventures await in the new sevenpassenger lexus gx. Lease the 2014 gx 460 for 499 a month for 27 months. See your lexus dealer. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. [ male announcer ] more room in economy plus. More comfort, more of what you need. Thats. Built around you friendly. Hopefully getting some clarity here in the next few moments. In the meantime well keep you updated on all things in washington. Well shift to citi. Kayla tausche has some of the highlights of the call. Interesting earnings out this morning and missed most estimates. Citis Mortgage Business was hurt most by refinancing, which makes up most of citis business and commitments made to customers who locked in low rates as Mortgage Rates started rises. U. S. Consumers on the whole are still cautious and deleveraging, which has hurt citis credit card business but it is seeing loans pick up outside the u. S. , especially in latin america. That means theyre having to put more money away for bad home loans there. The more business, the larger percentage that could go long. Fixed income and the Asia Business hit with what they called a pronounced doubt due to the feds notaper announcement in september and uncertainty of the pending potential default. And how washington handles unchartered waters of a potential default. Citi has sold reserves and asked them not to use the collateral. Youre watching live pictures of a News Conference due to sart at any moment with Speaker Boehner and the house gop in the wake of their meeting today to decide how they should respond to of course now the debt ceiling 48 hours away. Lets look at what the markets think the Federal Reserve will do if the u. S. Defaults on its debt. Steve liesman is back at hq and is doing work on that. Reporter treasuries seem to be trading calmly. There is widespread belief that a deal will be made at the last second and that federal regulators can come in and ease the pain. Heres what george said it would never be painless but no way, things could be kept secret. It could also rule that no additional reserve requirements are needed for the defaulted securities, treat them as if they still have a par value. Cnbc has ruled that regulators are considering such a ruling but publicly refuse to comment. There is no restriction on buying federal debt instruments that are impaired in some way. The expectation is the banks will not charge a big fee if any at all for this, for fear of being seen as taking advantage of the situation. That would be another bad p. R. Mark for the industry. Bottom line, fed can ease the situation for the long term but the long ter goes on, the more extreme the measure will have to be and the harder to continue the market working normally. Were going to take another break as we await house Speaker Boehner and the rest of the gop leadership. Well be right back. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. In everything from the best experiences below. To the finest comforts above. Were not simply saluting history. Were making it. Pcentury link provides reliable yit Services Like multilayered Security Solution to keep your Information Safe secure. Century link. Your link with whats next. A lot of things to trade on today, earnings from coke, citigroup, j j, fisher saying he will not support tapering in the next meeting. When they do begin to speak, well take it live. Apple upping bringing on new ceo burberry from london. Lets bring in jon. Can you hear me . Reporter yes, i can. You are on live television. Talk to me about mrs. Ahrendts and what she brings. Reporter burberry is a 11 million market cap company. Its interesting, shes from the midwest, big family, from the midwest, shes an operator, she knew when to cut back at burberry when the downturn hit. Thats part of what made her successful. Also gave a lot of Creative Control to burberrys creative director, was able to turn that brand around. She said in a wall street journal profile, if theres any company she looks at for guidance, its not another fashion company, its apple. Shes been very good at turbo charging their econference. It seems like shes been working on this apple relationship. Shes been very public talking about things like energy. She has a talk on energy where she already sounds like an appletype executive. If shes going to fit into apples cult, she might have to tone that down. Not a lot of apple executives have a high profile out in front of the public. She spent a little time on the west coast. We should note that. In london, its been a phenomenal performance on burberry stock. I think the stock up 480 over the past four, five years. So through the recession, it was about technology, it was offl obviously about increasing the prices. When she took over, the burberry brand, some undesirable people in the u. K. Were wearing, rather than the natural target of a higher end goods make person. The brand had definitely been diluted. When she came in, she really took this turn around story with force. A lot of people getting bent out of shape with rely of her pay pack. Shes the highest paid ftse 100 pay package. She took home 27 million, 19 million of that being burberry shares. Earlier this year that pay pack was cut back to 11 million, still a lot of money. But in the time that she was at the helm, she managed to see shares more than double, the share price jumping by well over 270 . Again, she brought it back to an upmarket company. Shes really managed to see the company through some very, very tough times. And now theres a lot of special lags abo speculation if can you take a ceo with a sense of fashion and see somebody with a sense of fashion and whether Christopher Bailey will be able to take on the ceo role as well. Youve seen Giorgio Armani leading his company into a much more business sense. Youve seen it with ralph lauren and it can be done. We went down to the last show and asked her about the deal with apple where they were streaming a whole lot, getting it out online immediately and this is what she had to say. The imagery we were able to capture on the iphone 5s, we always use these shows to keep burberry on the forefront and thats what the collection and the collaboration did today. Now the last u. K. Ceo who left a u. K. Company and went to apple only lasted six months and then stepped down from that position. No doubt a lot of people will be looking very closely at her and very closely at this pay pack. Shes leaving on a high. What else can you ask for in terms of being a ceo from a company like this . Did you believe it, shes going to be making more money probably at apple given how much the top execs there even under the ceo make in apple stock. Jon, people want to take lessons hiring from efficiency st. Laurent, hiring puerto rico burberry and extrapolate what it might mean for the next move out of apple. Are you willing to go that far . I dont think so. Ron johnson had been in retail first. He came over from target. Then cook went to john browit from dixons. Now hes going higher end with somebody with a burberry background, luxury, maybe understands apples brand a little bit better. Im not sure that its actually not about that and about geographies and understanding emerging markets. Reporter oh, yeah. This is a woman who cut back half the operation in china recently and said china was going the wrong way, latin america and indonesia were emerging markets. She knows emerging markets. Thats what tim cook needs. Reporter he needs other markets. Particularly because theyre trying to sell a luxury product but in a mass market way. She should have some insight into that, in part because of her background. Shes at a luxury brand now, but she grew up in indiana, she went to ball state. Those of us who spent some time nindian a know thats working class there. Humble beginnings. A lot of talk about her humble roots. Obviously were going to watch it closely as it gets close to 500 today. Keeping a close eye on washington as well, still awaiting the speaker and gop News Conference. Still were talking about some relatively shortterm deadlines as they extend but they dont extend very far, possibly to january and february. So the uncertainty will still be around. The big question, how do you run a business, run so many businesses through what were witnessing at the moment . Joining us now is martin franklin, the founder and current executive chairman of jarden. We should point out here youve got 100 consumer brands, cross pot, sunbeam appliances. How difficulty is it to do business if you have this uncertainty on capitol hill . I think on main street its less impactful than you might think in the short term. I think the sentiment is after explaining all alternatives they will work this out. Consumer behavior hasnt changed that dramatically. Its a concern for us if things go the wrong way. Thats very encouraging because particular will with the government shut down, we were concerned that was going to impact discretionary spending. We saw it to a certain extent in some of the ceos who have reported but youre saying overall you dont think it going to be a problem, martin . Well, if i look at our business, we finished with our q3 figures and were going to be at the high end of our oreggani growth range. We have about 10 brands across our groups covering a lot of different demographics. Consumer behavior has stayed Pretty Healthy. Where do you take the business . Last week you did a deal with a Shell Company that you set up earlier in the year to pay 1. 8 billion for private live held chemicals group. I know youve got other interests, particularly in europe. Where do you take the business now . Where do you make money in the future as things stand . Well, from our perspective, youve got a Pretty Healthy environment from a transactional point of view, youve got a continuing low cost of capital. The outlook for that is pretty good, youve got Economic Growth at the same time. If you can find transactions that represent good overall value and youre disciplined and you dont overpay, its still a very good time to transact. Access to capital is there, both in the credit and equity markets. I think its a pretty good time to be a buyer and not just a seller. Its a good time not to be selling apparel, which you guys dont sell. Give me your take on the consumer right now. You come on and you always tell us sort of how it feels. How does it want to sound too optimistic, but i think the reality is the consumers Pretty Healthy. The consumers been continuing to save. You see the activity in the banks. A lot of people a lot people have refinanced their mortgages. Theyve got a little more access to cash than they had before. Unemployment is its not been rising, obviously its been falling slowly, but falling. So people feel secure in their jobs. Its really not that bad out there. So when will you Pay Attention when are you going to Pay Attention to whats going on in washington, then . When does it rise to a level when you really start to think, okay, are people going to stop buying when it hits the proverbial fan. I mean, at the end of the day [ laughter ] i think that the i think the positioning and the painting themselves into the corner and all of this, im not a politician, but the brinksmanship at some point, theres an overwhelming feeling that the brinksmanship is for show and at the end of the day there will be an agreement reached. Obviously, i think sentiment among consumers will change if america stops paying its bills. That will be an impact. Martin, finally, various reports about retailers managing their inventory for the holidays, very cautiously. When you see that, do you believe it, or not . No. I think that retailers dont want to dont want to miss revenue. And i think that if we look at the opentobuys and the consumer activity, i think that there is a feeling that christmas is actually going to be okay. I dont think its going to be dramatic organic growth. But i think itll move in line with gdp. Well let you get back to work, martin. Thank you for joining us. Martin franklin, founder and executive chairman from florida. Thank you. Thank you. I love ceos that answer yes or no questions with a yes or a no. Because hes british. Isnt that refreshing . It is. A live shot of washington. House gop leaders are expected to speak eventually. When it does happen, well bring it to you live. In the meantime, the dow is stuck in the range, but currently down 50. Back after a break. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. A live shot of washington, d. C. That photographer is getting more air time [ laughter ] than anyone in american media. Hes been on tv for the better part of an hour, as we await the gop leaders. Eventually, Speaker Boehner will take the mike and well Pay Attention to him. But for the meantime, hes the most interesting thing in washington. Meantime, blackberry taking fullpage ads in newspapers worldwide, trying to reassure customers, pleading with them to stick with the mobile company. In the ad, these are no doubt challenging times for us and we dont underestimate the situation, but you can continue to count on blackberry. Calvin, the founder in chief of blackberry, got his haircut at the blackberry launch. Kevin, good to talk to you again. Good to speak with you, too. I was thinking you would mention the haircut. [ laughter ] i cant decide if this ad is positive or negative. On the one hand, it does sort of acknowledge their own mortality, so to speak, but you have to tell people that youre going to try to stick around. Whatd you make of it . Absolutely. I agree with you. Its a little bit of both, i think, depending who you are, youre going to read it differently. The thing is to put it in perspective. They really wrote this as a message to their customers, their partners, and their fans. You know, the sentiment around blackberry has been negative lately on the back of the challenging times, as they say. So i think this is their chance to take control of the message, say what they want to say, and remind their loyal user base thats been with them over a decade that they are still here, and theyre unintelligible even if blackberry does change. Kevin, do you think they will survive . I think its i think they will survive, but it will be a different company. I mean, theyve gone ahead and said, look, were getting out of this sort of consumer, headtohead mobile handset space in the sense that theyre not going to focus on the consumer. They dont have the warbucks to go after the apples and samsungs headtohead on marketing dollars, so theyre pivoting and focusing on the professional user theyve known for year, the power communicator, the person who, you know, has money, maybe buys multiple devices and really kevin. Kevin, if you cant persuade people to buy the blackberrys at the retail level, how is a Technology Officer going to persuade people in a business that they should be using a blackberry . So, i mean, the question is, do they stay in the handset business . And a lot of the you know, the rumor and speculation has been that its likely they want to get out of. Its almost an ibmtype play where, you, know, ibm makes a lot of computers for a lot of year, and unintelligible enterprise a more stable player. Right now, blackberry phones [ inaudible ] phones that have been in the pipeline. And i think, you know, the pipeline goes out a couple of year, so you may see quite a few phones to come, but ultimately, you may see the Company Pivot and become more of a Service Provider to enterprises, governments, et cetera in the mobile computing space. Of course, on the back of that, theyll have some Consumer Services unintelligible kevin, i know youre not a banker. Do you hope its fairfax or somebody that leads them to the next chapterer . I dont know whats going to happen. I think the next its hard right now to even say what the companys going to look like in six months. You know, i think i think theyre still firing on a bunch of cylinders. Theyre in the process of sort of downgrading or downsizing from a you know, from a v8 to a four cylinder, but in doing that, theyll find a model that gets them more mileage. The question is just how theyre going to do it right now. And i think coming back to the letter part of this is, you know, they need to keep the revenue flowing as much as they can while they make this transition, to whatever it may be. Between fairfax or, you know, mitel, im not sure what i in [ inaudible ] [ audio difficulties ] kevin, thanks a lot. Well keep our eye on the stock. Talking blackberry there. As we await Speaker Boehner, for whom were told now is close, a few minutes before 11 00 a. M. Eastern time. If youre just joining us among the news here, the House Republicans will today introduce a bill to extend the nations debt ceiling and reopen the government. It takes the debt ceiling to february 7th. Takes the government to january 15th. They will stop extraordinary measures from being used by treasury to extend the debt limit, meaning when we have this discussion again, the deadline will be a little bit more firm. Not as much wiggle room, something that Steve Liesman has been covering a lot today. It does delay the medical device tax for a couple of years and takes away the obama care subsidies for the house members, the president , the Vice President , and members of the cabinet. And well see how the speaker characterizes not just the proposal, guy, the bill, but the chances that it has in the house. Or in the senate. Will this i mean, could this pass through the senate . Presumably why would obama sign up to that to a hard deadline on the debt ceiling in january . I mean, thats that gives them so much power come january. He will be oh, i dont know. I dont know. It just seems very unlikely, doesnt it, as just an objective statement . It does. It does. There is this thought, john harwood has introduced, that its just trying to apiece appease boehner is trying to appease the tea partiers with this. But then you come back with a bill that will be able to pass, one that already has perhaps passed the senate, which may take it up by tomorrow. That is their bill. Right. John harwood does join us in washington. John, anything youve been able to gather in the past hour as weve been waiting . Reporter no, the only other point id make about the house bill is john boehner himself does not favor the vitter amendment, doesnt want it to become law. And so, i think the fact its included in this bill is a pretty good sign that the bill is a gesture rather than a serious attempt to have something pass the senate, could not pass the senate on the basis of the vitter amendment. It couldnt pass on the basis of taking away the treasurys extraordinary measures. Those are pretty clearly things that are designed to tell members of the tea party, we fought the good fight, we pushed it as hard as we could, and like the other things we sent over to the senate, that got roadblocked, this will get roadblocked, too. All right. I think we might be getting somebody coming close to the microphone here, john. Interesting that a lot of the moderate voices you know, bob corker has been consistently giving some of the most interesting sound bites, john. Today is, house members have been focused on a shiny object that was never going to happen. How much water does that carry . How far does that message travel . Reporter well, that is what pretty much all of the mainstream republicans on the hill think right now. Theyre angry at ted cruz and mike lee. Theyre angry at the tea Party Faction in their caucus for putting them taking them down this rabbit hole, damaging the partys reputation in pursuit of a goal that was not achievable. And so, now i think the influence of that faction is lower than it has been in the past, and people like bob corker are going to have more clout moving forward than they did at the start of this process. All right. As we see some staffers coming here closer to the microphone, well i guess well take this live shot in washington, assuming someone is going to speak. Just as just as by way of mechanics, john, weve seen delays in scheduled press conferences. Is there anything special about this one and the fact it has gone on for more than an hour . Reporter well, i think members are were doing a lot of soul searching in their private meeting there. They kicked the members of the staff out. And this is really crunch time, and its difficult. You know, Mitch Mcconnell has delayed his caucus with his republican members, because this adds a complication to his life. Even if John Boehners only doing this to placate hardliners, it makes it more difficult for Mitch Mcconnell to stand up in front of his caucus to say, ive struck this deal with harry reid. I still think he intends to do that, both reid and mcconnell have expressed notes of optimism about their capacity to reach a deal. But this makes it more challenging, and its another hurdle for them to clear. I still have the idea that they will clear it. But, you know, weve seen a lot of things not go the way i expected in the past. We have one thing we havent addressed with you, john, is the is the elimination of the extraordinary measures from being used by treasury. Is it your view the next time this discussion comes around it will be more firm, that the stakes will be higher . Reporter i dont think an administration this white house or any white house could accept that limitation on the treasury secretarys freedom to maneuver an ability to maneuver. Especially given the difficulties that weve seen Getting Congress to raise the debt limit. So i think its an attempt by republicans to say, were not going to let you play games anymore. You know, theres been some disbelief on the part of republicans and some have even expressed the view that of reaching the debt ceiling might be a good idea, because while they pay the interest on the bond, but theyd have to budget and balance the budget, as rand paul said, for other things. They dont believe the warnings from christie and lagarde and many other people about the impact on markets if we reach the debt ceiling and trying to codify with this measure, and i think it is rejected by the vast majority of people on the hill, the have majority of people on wall street, the vast majority of the business community, and its another reason why i think the provision wont become law. John, lets assume we do get the government reopened, we do increase the debt ceiling. You know, i wonder, though, does this put us in any better position to tackle some of the key things that seemingly are have been out of reach, whether its a farm bill or transportation bill, immigration bill, or anything of that nature if, in fact, there is a resolution to this latest crisis in. Reporter actually, i do think so, david. In this sense. The reason they couldnt pass the transportation bill this summer was because many republicans came to the recognition that the spending levels under the sequester were too low for them, right . So even though republicans are identified with favoring the sequester, democrats wanting to lift it, both parties want to lift it in different ways. And so, i do think that once they get into a budget negotiation, theres a chance for two kinds of a deal a small one or a big one. You could have a small one that alleviates part of the sequester. It shifts some of the cuts to entitlement programs, which need longterm restraint discipline. That probably could be done without any tax increases the administration might not insist on then. If they want a bigger deal, one that goes seriously after some of the spending on medicare and Social Security, then i think the white house and democrats would insist on tax revenue. The latter is much harder to get. It makes sense for the country. So i think im loathe to dismiss it as a possibility, especially after all of the attention to the issue now. But a small deal, i think, is more likely. So conceivably this new this new, to a certain extent, the power of the tea party bloc . If, in fact, we get a negotiation that results in a large deal, that would, by definition, be against the wishes of some of the taea part group, because it would include new revenue. A smaller deal . Not so sure. There are a lot of people paul ryan, patty murray, the white house who potentially could get together on a smaller package that would alleviate the squeeze on shortterm spending for targeted areas, which ben bernanke and others have said may be restricting Economic Growth at the moment, and instead go to longterm fiscal restraint, which the consensus of economists in both parties is what we ought to focus on rather than the short term. While were while youve been speak, john, the bottom of the screen there, a statement from the white house. The president has said repeatedly that members of congress dont get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nations bills. Unfortunately, the latest proposal from House Republicans does just that. In a partisan attempt to appease a small group of Tea Party Republicans who forced the Government Shutdown in the first place. Clearly, a rejection from the white house. Reporter yeah, a rejection from the white house. And, you know, as the as the republicans get back off of the limb where they were demanding defunding or delaying of obama care, the president s got to slice the salaamty thinner and thinner, because, you know, if he goes along with the senate package, which, of course, he will, it does have a tweak to obama care, which democrats are saying, well, thats offset by a trade that we made. Its not really a concession. But its harder and harder to sustain that argument, the narrower the distinctions become. One last point. We think the speakers about a minute away, john. Youve said a couple of times that you yourself have probably been too optimistic as weve worked our way through these chapters. Reporter its a consistent character flaw. Yes. Is it occurring to you that thursdays going to come, and either because of mechanics or timing, this is not going to be done . Reporter it occurs to me that that could happen. Thats right. But i still dont think it will. [ laughter ] i mean, there is reporter if thursday comes there is that moment in the Fourth Quarter where even if you get the ball back, getting it down the field by the time the clock expires is going to be hard. Reporter you gotta believe in those hail marys, carl. Is that where we are, god, a hail mary, huh in. Said the fan of the redskins with r. G. Iii having the troubles hes having in the nations capital, not being able to catch a break. Lets do a quick update. The dow is down 71. The s p is off 6. Still above 1,700, david and simon. You have to hand it you talk about whether its resilience or complacency, that continues to be both support and resistance to a large degree. I guess on the judgment from those in the market, given what the white house has just said, which is an outright rejection of whatever theyre about to announce, this becomes the sideshow, then, to what happens later in the senate. Mitch mcconnell, of course, absolutely key there. Yeah. Gold has been a little more volatile, as we said earlier on, down to 1,251 earlier this morning, when it looked like the process might be cleaner, it did pare some of the losses. At 1,271. Everyone wants to seem to buy the dips. And theres a headline there, as we see on the screen, too, the president to meet with the democratic leadership at 3 15 p. M. Eastern time. And we are working our way here within about 48 hours of the deadline. So when we asked john about whether or not this whether or not this could potentially not get done in time, its a serious question. And here is the speaker. Good morning, everyone. Our Leadership Team met with our members today trying to find a way forward in a bipartisan way that would continue to provide fairness to the American People under obama care. There are a lot of opinions about what direction to go. There have been no decisions about what exactly we will do. But were going to continue to work with our members on both sides of the aisle to try to make sure that theres no issue of default and to get our government reopened. Good morning. We just talked to our members. And i think its been very clear all along what we as republicans in the house have wanted. One, weve wanted the democrats to sit down and talk to us so we could work out our differences, and weve been saying since day one that we believe there should be no special treatment under the law, and there should be fairness for all americans. Those elected and those unelected. And im glad to see that harry reid in the Senate Finally has begun to sit down and talk with the republican leader there, and we encourage that. We also, though, as the House Republican conference, think its very, very important for us to stress in whatever proposal we move forward will reflect our position on fairness. That no special treatment for anybody under the law. Very clear in our discussions that we think individuals should be treated fairly. That big business should not have special treatment, and members of congress should not have special treatment. We are very cognizant of the calendar. We want to find a solution to this in a bipartisan manner that gets us moving forward and gets america back working again. Okay, for weeks now, the republicans in the house have been leading with solutions, and we believe that this is the time for solutions, and they need to be based upon fairness for all. We recognize that people all across this country continue to struggle and have their challenges, and as the foundation, we want to ensure that laws are written and implemented in a way that provide that fairness for all, whether its moms, dads, Small Business owners, seniors, young people, that are trying to find their way forward. And we in the house we remain committed to being a part of a solution to working in a bipartisan fashion to find those common sense ways to make sure that were doing whats good and right for america. Mr. Speaker a couple of questions. Mr. Speaker . The changes in your bill to the president S Health Care law are arguably pretty minor. Were they worth a twoweek Government Shutdown . Listen, were working with our members on a way forward. And to make sure well provide fairness to the American People. Mr. Speaker . Can you guarantee the American People, congress will not go past the deadline and listen, i have made clear for months and months that the idea of default is wrong. And we shouldnt be anywhere close to it. Last question mr. Speaker . Will there be a vote today on the vote today on the plan that would make some changes to the senate bill and were talking with our members on both sides of the aisle to try to find a way to move forward today. Thank you. All right. Trying to read some relatively obtuse language there. The dow did pop about 40 points on the very brief typically brief presser by the Republican Leadership. John harwood, no mention of a vote today. Should some read that as a good sign . Reporter well, i thought what the news from this press conference was the speaker did not say, heres a bill that weve agreed on. He said, were still working on it, talking about it. That indicates that the Republican Caucus is divided. Theyre not sure about a way forward, and that strengthens the hand of the house and Mitch Mcconnell, as hes doing negotiations with harry reid. So i think the complication potentially posed by a house bill moving in a parallel track at the same time is somewhat diminished if the speaker is not setting that in motion right now. He said, were looking to have a way forward and act today, but if you dont have a bill, youre not movin. Right. I assume that if they you would tell us, clearly, if the speaker thought he had the votes to move ahead on this bill today with a vote, he would have said so just now . Reporter i think that is right. I think its both a matter of, one, the potential votes. And, two, what do you want to present to the country as the houses alternative at this point in the process . And i think the division revealed by the fact that they didnt come out with a bill, despite all of the reports that they were going to move a separate bill, is a sign that its not as easy at this point with just two days left to set Something Else in motion, and that, again, strengthens the hand of the senate. Were going to work you hard today all day long, john. Thank you so much for the pass couple of hours. Our john harwood in washington, as we got that longawaited press conference. Lets bring in david and larry, and, guys, we appreciate your time today, as well. Good morning. Good morning. Good morning. You know, you cant blame an investor for saying, you know what, im just going to sit and wait until this is all over, david. Even as we have to report on the tiny moves back and forth. What do you make of this mornings action . Yeah, i mean, certainly, theres lots of twists and turns in the story, and were still waiting for the details. But our bottom line has been pretty consistent all along, is there will be no default on treasury debt. The disruption to the economy is likely to be fairly minimal. Well get more color as we go through earnings season, and investors should really look through this noise and focus on the fact that Earnings Growth is accelerating, Monetary Policy is still accommodative. And if you look at the budget deficit in the short term, things have actually gotten a lot better. Were still pretty constructive on equities. And i think you probably are in the same mind as david, larry, in that a default isnt likely. You seem to be a little more pessimistic once you do look through the political machinations and look at the market fundamentals, look at the economy . Yeah. Absolutely, i agree with the first half of what mr. Lefkowicz. There will be some kind of deal. There wont be a default. Were sanguine on the prospects of the stock market once investors actually start focusing on the fundamentals. Well, what do you do, uri . With that as a backdrop, you must need to put assets somewhere, and if you feel like the market doesntequities, whe you go . 2. 7 on the 10year . Well, bonds are equally unattractive, if not more so. I think what you need to do is actually look for alpha opportunities, places where you think you can make money, and then hedge out the beta risk in the market so that youre not reliant on higher markets to inflate your investments, but rather the quality of the investments themselves. David, your point about earnings acceleration. Some might disagree with obviously, were just barely into earnings season, but its not like were being overwhelmed with stellar reports from either the big caps or the smaller companies. I mean, do coke and citi reflect where the economy is right now . I think its a little bit uneven, especially in terms of the consumer side. You know, cokes numbers were, you know, a little bit better than where they were in the prior quarter. But i think if you look at the big picture, the headwinds that we are contending with over the last in the first half of the year, were a european recession, a slowdown in asia, and a stronger dollar. And all of those are now reversing. We have europe coming out of recession, asia stabilizing, and the dollar has moved in favor of u. S. Multinationals. I think thats going to lead to an acceleration in Earnings Growth. It will be moderate. Were only looking for 7 or 8 growth, but thats better than what we saw in the first half, which was 5 . Thats true. Our expectations are relatively low. David, uri, thank you for your time, on a busy news day. Appreciate it very much. Pleasure. Sure. S p back to 1,708. The nasdaq has gone green. Its been about two week since the exchanges under obama care went live. People are facing technical problems when they sign up for insurance. What will it take to get everything up and running properly . Well ask the man who ran the state program in massachusetts, better known as romney care, to find out when we come back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Today marks two weeks since the obama Care Insurance exchanges opened, bringing with it some frustration for those trying to enroll. Our next guest expected some glitches as he has seen this before, just on a smaller level. John kingsdale oversaw the insurance exchanges for romney care in massachusetts. He joins us this morning from boston. John, good to have you with us. Good morning, carl. It sounds like you were impressed with the way some states have performed, but on a federal level, this is a this is a lot to swallow all at once. Yes. I think we expected glitches, frankly, across all of the exchanges, and some of the states have done a great job. The level of interest has been huge, but its clearly getting time for the federalfacilitated marketplace to get up and running and start enrolling people. Where do you think the fly is in the ointment, jon . What is wrong with the federal effort . Well, clearly, one of the and im not an i. T. Person but one of the problems, even from a consumerretailing and marketing perspective, let alone i. T. , is the requirement the decision they made to require that you create an account, go through the identityproofing process before being able to even browse in the new insurance marketplace. And thats been a huge bottleneck. And the problem with that not only is that that itself is a bottleneck, but theres a set of gates downstream that we dont get to test or they dont get to test with high volume until you get past that bottleneck. So you have to literally deal with the hundreds of insurers down there who have to get their own information straight before they can pass it on to consumers. Thats your point . Exactly. Thats not the only gate, but thats probably the most critical one. Yeah. You also talk about the timeframe for enrollment, as we compare the federal effort to what happened in massachusetts. Theyre trying to compress this into a much shorter time period. Thats right. And theyre doing a lot more, you know, to be fair. This is not only a national effort, in very again, swimming against strong oppositional currents but its far more ambitious. We in massachusetts simply used the existing eligibility determination system. We literally subcontracted to our medicaid program, mass health, whereas this National Health effort is to install a new eligibilitydetermination system for the exchanges, for medicaid, and eventually for food stamps and other subsidized programs. What will conversations sound like as we get closer and closer to the end of this window . Is it possible it gets extended . Im just trying to understand how the status quo could continue well into the next few weeks. Well, you know, october, ive always thought, was a browsing month, if you will. The millions and millions of visitors, we dont know the portion of those that are really interested in buying. And our experience in massachusetts was that folks got on the site and shopped many, many, many times before they actually bought. And relatively small percentage of the browsers, if you will, actually did enroll. So i think that october is kind of a lookandsee month, but november is when the real volume of enrollment we should expect i would expect to see it begin, and thats when we really need to see the i. T. Systems up and running reasonably flawless. Thats a good point. You think about how you buy a car. You dont log on and buy right away. Do you take your time and try to find the best deal. Well see what november brings. Jon, thank you for your insight. Hope to have you back. Thank you. My pleasure. Jon kingsdale, joining us, talking about the obamacare effort. In the meantime, apples ceo, tim cook, hiring the first woman to his executive board, right there, coming over to apple to heck the tech giants retail operations. Does the move mean luxury iphones and ipads are in the pipeline . We have the details on that as the dow is now within five points of going green. At a ford dealer with a little q and a for fiona. Tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Get up to 140 in mailin rebates when you buy four select tires with the Ford Service Credit card. Whered you get that sweater vest . Your ford dealer. [ passenger ] airport, please. What airline . United. [ indian accent ] which airline, sir . [ passenger ] united. Whoa taxi [ british accent ] what airline, then . [ passenger ] united. All right. [ spanish ] what airline . [ passenger ] united. [ mandarin ] which airline . [ passenger ] united. [ arabic ] which airline . [ passenger ] united. [ italian ] where are we going . [ passenger ] united. [ male announcer ] more destinations than any other airline. [ thai ] which airline do you fly . [ passenger ] united. [ male announcer ] thats great, big world friendly. Taking a look at the market board. The s p is one to watch. Its 1,710. Getting awfully close to the 52week high, 1,729. Were once again holding above some of the critical levels. Apple shares, meantime, rising today on news that the company is adding burberry ceo to head its retail operations. Well talk to a top editor at womens wear daily to help explain whether the move will help apples style. I love having a free checked bag with my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. Welcome back. Bob pisani back on the new york stock exchange. Call it yoyo trading. Stocks rose and then dropped as mr. Boehner came and said he wouldnt introduce a bill of his house, and then he and others had a press conference saying theyre trying to find a bipartisan way forward, although no mention of any bill actually happening. The bottom line, the stocks are near the highs. The s p actually did go positive on that news. Lets move forward and talk about some of the things that are worrying people, like the deal might get done. A lot of concerns that that january 15th deal, reopening the government, it will cause its own problems. Remember what happened back in january of this year. Remember the delay in refund checks after the fiscal cliff fiasco and walmart saying sales were a mess because people didnt get their refund checks . The worry is thats what will happen again. The tax refunds may be delayed because of a fight over the sequester and the budget into december and january, and that this may impact christmas sales because everybody is aware of the fight coming and may spend less. This is some of the knockon effects, not surprisely, retailers are underperforming. Consumer discretionary is weak. Retail names there. Ralph lauren, coach. The usual suspects towards the downside. 3to2 decliningtoadvancing stocks even though the major indices are on the flat side. Speaking of retailers, walmart has got its investor day today. Some headlines. The ceo saying were in a tough and unpredictable global economy. Now, i have been waiting for some guidance in terms of 2014 earnings numbers. They normally will do it today. I havent heard them yet. Im sure the cfo will give an update later in the day, will probably give some kind of guidance. Thats what everybody has been waiting for the the earnings estimates are aggressive, about 10 higher next year compared to this year. Keep an eye on that. Rates are continuing to climb. Were at roughly onemonth high on the 10year at 2. 7 . Thats impacting some ratesensitive groups homebuilders are having a tough day today. Some of the big names down about 2 . Guys, back to you. A lot of information, bob, thanks a lot. Were keeping our eye on d. C. , as well. We expect House Minority leader pelosi to speak in a moment. Apple is making a fashionable acquisition, tapping burberrys ceo ahrendts. Were outside the Burberry Store are more. Good morning, robert. Reporter good morning, carl. A lot of people are looking at this, wondering will this work, a maker of very expensive trenchcoats going to a tech company . But this is really all about apple, as a luxury brand. A recent survey in london called cool brands ranked luxury brand, apple coming out at number one followed by astin martin and ro, and its about quality, performance, authenticity, at buttes that apple has strived to keep here. Another survey, looking at especially true with the younger consumer, younger affluent surveyor in the u. S. , looking at rankings of the brands. Number one was apple. It was followed by bmw and ralph lauren. So apple, again, really more of a luxury brand now. So what can she do for apple . Well, these are really the same consum consumers, the apple consumer is the burberry consumer. The young, the affluent, and, again, trying to restore a sense of cool. Shes been very good at creating upmarket products. Shes expanded overseas and a lot of technology. Back to you. Robert, thank you for that. Lets take you to the senate floor and harry reid. Nothing more than a blatant attack on bipartisanship. The past several days weve been engaged in productive bipartisan negotiations in the senate. Everyone knows that. Weve been working across party lines and making steady progress to achieve an agreement that reopens the government, protects the full faith and credit of our great country, and opens talks to put this country on a firm fiscal footing. Everyone needs to know that the measure under discussion in the house is no part of what weve negotiated here in the senate. Mr. President , the debt is here. The deadline is looming. Rating agencies are talking about downgrading us as early as tonight. Again. I know i speak for many of us whove been working in good faith when i say that we felt blindsided by the news from the house. But this isnt the first time. Extremist republicans in the house of representatives are attempting to torpedo the senates bipartisan progress with a bill that cant pass the senate cant pass the senate and wont pass the senate. The house measure would take away the president s fundamental authority thats been in existence for as long as Political Science can remember. Its been in place for decade after decade after decade to prevent a catastrophic default on the nations bills. Out of spite, Tea Party Republicans are trying to take authority away from president obama. They would never, ever consider doing this if it were president romney, president bush, or president bush, or president reagan. Never. But as theyve said and theyve cheered over there the governments closed. We dont mind defaulting on the debt. Its good for the country. Thats what theyve said. Their legislation would also make unacceptable major changes to obamacare. House legislation doesnt even include a process for bipartisan negotiations on a sensible longterm budget. They just throw out these numbers and think magics going to happen, and somehow come january 15th, everything will be hunkydory. Theres still processes we have to follow. They set no pattern, no sched e schedule, no routine to do that. For weeks, republicans have claimed they want to negotiate, but their legislation completely ignores the need to Work Together to craft a budget and put our country on a fiscally sustainable path. For years, mr. President , theyve complained about, why dont we have regular order . They complained about a lack of a budget. Now, they dont even want us to negotiate a budget. Hard to comprehend this logically, but, mr. President , the tea partydriven part of the Republican Party doesnt follow logic, or why would they want to close a government for 15 days, have us default on our debt . Introduction of this measure by house Republican Leadership is unproductive and a waste of t e time. Lets be clear. The house legislation will not pass the senate, and here is what the white house said just a few minutes ago. Quote, the president has said repeatedly that members of congress dont get to demand ransom for filling their basic responsibilities to pass a budget and pay the nations bills. Unfortunately, the latest poll of the House Republicans does just that in a partisan attempt to appease a small group of Tea Party Republicans, will force the government to shut down in the first place. I am very disappointed with john boehner, whod once again tried to preserve his role at the expense of the country. Ive worked hard to rise above partisanship, to find Common Ground in the senate. Mr. President , weve done that together for the good of the nation. This is much bigger than the senate or whos presiding, from the state of hawaii or the assistant leader whos to my side. This is much bigger than that. Its much bigger than me. Its much bigger than two senators who are here from connecticut. Senator from we have the senator whos chairman of the budget committee, murray. Its bigger than her. Its bigger than the senior senator from new york, senator schumer, whos on this floor. Mr. President , we have to start working together for our country. Thats what weve been trying to do. This is so disappointing. On the eve of financial destruction for this great country, and thats what it is. To appease a small group of people over there. Im so disappointed. Senator neil for a question. I would be happy to. Id like to ask the senator, majority leader, through the chair, one of the key elements in this new proposal from Speaker Boehner is to diminish this president s authority to deal with a default on our national debt. This authority socalled extraordinary measures, or emergency measures gives to president s, going back to president kennedy, the wherewithal through the Treasury Department to try to avoid an economic disaster, which could impact families, businesses, jobs, and the reputation of the United States in the world. I ask through the chair of the majority leader, now that we have seen the Republican Party bring us so close to the precipice on a default, it is unimaginable to me that any president , including president obama, would surrender this authority to keep america safe in light of this type of threat. Is this one of the key elements in terms of the problems associated with the boehner proposal . Mr. President , to my friend from illinois, senior senator, weve seen whats gone on these last few months. This whole year. With a group of people who are out giving press conferences, holding demonstrations. They want the government to stay closed. They wanted it to close in the first place. The hardship we have all over this country is really, really awful. And then, if thats not good enough, theyre out boasting that they want the country to fail its obligations to pay its bills. These are not new programs. These are obligations we have. And then i mean, thats one of the things. The proposal they have would not allow for example, my friend is the chair of the most some say the most important part of the whole federal government, protect the safety and security of the United States, subcommittee, dealing with defense. It was led by many, many decades by the late senator dan inouye. This proposal theyve sent gives the president of the United States, the chairman of the joint chiefs of staff, no flexibility whatsoever when sequestration kicks in on the 15th. Were not asking to change the numbers. We agree to those numbers. Weve voted here to approve those numbers. But they wont even allow flexibility to allow the department of defense to shift that money around. I do not know how the defense of this country can go forward if they dont have flexibility with losing 22 billion beginning january 15th. They dont even give authority for that. This bill that theyre sending over here is doomed to failure. Its doomed to failure legislatively, and it is so awful, awful, awful, awful for our country. Senator from new york. Id just like to underscore for a brief moment what our leader has said. You know, default will be devastating to this country. Closing the government is awful for our country. And, yes all right. Senate democratic leadership in the senate talking about the bill that was floated today on the house side. Reid saying that it will not, cannot pass the senate, saying he was blindsided by the hou house not the first time, in his words many also talked about various ratings agencies portending downgrades as early as tonight, something that comes as some news to us, but he may know something we dont. John harwood, your take on what reid just said. Reporter i have to say, carl, listening to harry reid complain so much about what happened in the house makes me wonder whether it complicated Mitch Mcconnells life and, therefore, harry reids negotiations with mcconnell more than i had anticipated. Because if he could simply brush it off and ignore it and proceed with the negotiations, im not sure he would have been talking about how disappointed he was, and john boehner putting his position above the country and all of that other stuff that he was saying. So i havent talked to people yet, just listened, as you did, to harry reid. But i wonder whether or not that might have a serious effect on those negotiations in the senate. Really . So you dont necessarily think were back to where we were before the market opened today, in that were looking at an emerging senate plan and trying to handicap its chances in the house . Reporter i would assume that we are, but i i am not as sure of that as i was 15 minutes ago. All right. John, thank you. Obviously, challenge to keep pace with all of the very quickmoving action out of d. C. By the way, Minority Leader Nancy Pelosi was just speaking on the house side, as well, said that boehners Performance Today was the look of a speaker who does not have the votes. When we come back, a surprisingly weak treasury auction causing some concern in the markets. Well get details on that. The dow hanging in with about a 44point loss. Back in a minute. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Theyre the days to take care of business. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure and Global Broadband network free you to focus on what matters. With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. Welcome back to squawk on the street. Some news about treasury tbill auction. It didnt go very well. It didnt go terribly, but not very well. They did the tail, the higher bids ended up being the rates. You can see spikes in the onemonth tbill. Im told this reflects growing nervousness its the first time weve seen the spike outside of what they call the zone of potential default. These fourweek bills and sixmonth bills essentially are beyond when the market believes there would be a default problem. Thats where the spike has been. Now were getting a spike outside, which one trader described to me as just general nervousness, general risk aversion, now taking hold on the dawn of the debt ceiling breach here, guys, and now affecting, going out beyond the concern of the actual default into broader u. S. Treasury bills. And what you see here is a. 2, which is not big, guy, but a big number for where weve been on the onemonth tbill. Yeah, were looking for every Empirical Data to see how the market is behaving. Steve, thank you. Big day for earnings. Well bring in the earnings squad next when we come back. Coming up [ siren ] earnings squad in color, starring melissa lee and also starring tayla tausche, and todays earnings for coke. Welcome to the earnings squad. We have the earnings stories everyone is talking about. Im melissa lee. Joining me is Kayla Tausche and stephanie link. Lets get to the top story for the squad session, and thats a controversy surrounding jpmorgans earnings, because theres a dispute about how Legal Expenses will be treated and have been treated in the quarter. Well, in the report on friday, melissa, Legal Expenses were considered a onetime item, and without those jpmorgan said it had profits of 142 a share. But analysts on wall street had been forecasting 117, and theyve now come out and said, our 117 estimate actually had the Legal Expenses in it, so, therefore, we are not going to exclude that from the estimates. Theyre now saying its a 17centpershare loss, and thats dragging down the growth estimates, 1. 6 is the Earnings Growth forecast now, including jpm, and without its 4. 2 , even worst effect on the financials. Is this a big deal, because a lot of the financials are facing Legal Expenses and will continue to face Legal Expenses, because it will change the way we look at whether or not theyre beating estimates. It certainly is. As a p. M. , you look at earnings revisions all the time. From that point of view, yes. You look at the core operations to see whats happening with the companies, and jpmorgan had a very good core earnings number. If you look at advisory up sequentially, and their business down with citigroup, and the equity trading business up 20 , much better than expected. So im okay with that. So the bottom line is that that is just noise at i think its some time onetime. So we heard from citi, from jpmorgan, wells fargo, tighter cost controls are really helping to offset weaker revenues and also the Mortgage Businesses are very slow. Right. The thing that citi said that i think a lot of people were expecting was the fact that fixedincome trading was down, and it was down in a pronounced way because of the uncertainty about whether the fed would taper in september. We know now they didnt. Securities and banking revenue for citigroup down 31 . It looks like citi was overexposed to that certain trade there. But its interesting, because if you look at main street, charles schwab, for instance, actually benefited from some of the uncertainty. Investor net new deposits up 107 from the last quarter. So even on main street, people are feeling good and wanting to put their money in the market, but on wall street, theyre really pulling back on some of the activity. Lets talk about main street and specifically consumer discretionary. We got a read from dominos pizza, and it was a rare miss for this one, because this company hardly ever misses on earnings. Second miss in two year, right . Yeah. Disappointing, but really the operating margin that was disappointing in my view. If you look at revenues and comps, they were basically in line. This stock, though, melissa, is up 58 year to date. 29. 9 versus 29. 5 in the operating margin. But if you look at some of the trends, the stock needed a beat and a raise. Mm. And up 58 yeartodate. Right. You wouldnt get it and its 25 times earnings, few expensive. You can get this in the low 60s. All right. That does it on the earnings squad. If you want to join us, tweet us. Well be back more. Straight ahead, momentum stocks shrugging off the latest backandforth out of d. C. This morning. Well show you the moves. Into my mantra . Trust your instincts to make the call. To treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. 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Bny mellon combines Investment Management investment giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. We got a lot of the politics out of the way. Tesla still benefitting from the upgrade with some survey results showing good market potential for the generation 3. Potbelly, though, some comments out of lee cooper on squawk calling it one of the overvalued name, down more than 7 . Lets get you to headquarters, scott wapner, and halftime report. All right, carl, thank you so much. Heres what were following on the half. Why a guest on our show says Congress Wants the dow to drop a thousand points. Overdrive and upgrade for tesla has shares upgraded. The traders take the wheel. We begin with the top story. Day 15 of the shutdown showdown, just two days now from the debtdefault deadline. Just when you thought a deal was imminent, the dysfunction in d. C. Takes a rather unexpected turn. Its halftime. Lets get to john harwood in washington with the very latest. John, it certainly seems as though the house and the senate are on