Futures meantime okay. 10year yields not moving a whole lot and may not until we get the fed statement tomorrow. Our road map begins with apple, profit and revenue did beat the street last night but margins are below expectations. Sears has considered breaking off its lands end and sears auto businesses. Facebook looking for the social marketing revolution. And nbc reporting the Obama Administration knew millions would not be able to keep their Health Insurance under the new Affordable Care act. First up, though, apple did beat the street last night with its fiscal Fourth Quarter numbers. Profits fell, growth margins slid among heightened competition, despite the sale of 40 million iphones for the quarter. They see revenues 55 billion to 55 billion. Heres what ceo tim cook had to say last night on apples conference call. If terms of supply, into the quarter with a very significant backlog. However, our supply is building each week. In terms of the retina or the ipad mini where the resin display, well start shipping later in november. Its unclear whether we will have enough for the quarter or not. I think well do fairly well with ipad, as i had mentioned before. We felt like it going to be a really Great Holiday season. You know were in a brave new world when a revenue forecast for a quarter actually, a margin forecast for a quarter, jim and david, is fodder for new york tabloids. There it is, the actual projection for Gross Margins in the holiday quarter. The stock was down 12 to 14 points in the after market because people didnt get to the key question. Almost say twothirds of the way through the q a, what would have been the real gross margin had they not used deferred revenue. It changes the real numbers. The actual gross margin was good, 38. 5. People dont understand you got to back out the product. I think the headlines are basically wrong. The subscription cant exist. I was demanding to know why cant we book the whole thing all at once . Its not generally accepted accounting principles. Gross margin is good and people didnt seem to realize. That was that uturn. 5 of 6 and 5 55 on the call, you saw that stock go from down to up and that was breathtaking. Interesting. Ipads were a little bit light, right . 400,000 . I thought that the phones were good. Its so funny, they really last quarter i was critical of the conference call. I know that some people took that seriously. I didnt mean to. I was just reading the call because i liked the theater of calls. This time it was all about china last time. It just shows you how difficult the analysts are. Youre only as good as your last statement. China was fantastic. And china looks like its going to be even better. And its like, hey, guys, chinas good. Last time it was about how they had no china exposure. Next time youll have the burberry woman on the call and it is going to be an apple christmas, the stock is a serious buy and it is going to 600. Really . You think so . Yeah. They were positive on the call in terms of the product road map, in terms of where margins are going to stay in the current quarter. This will be the largest revenue quarter. 55 to 58. I think could you do 60. Is does annoy me by the way. People are supposed to being o looking at the Gross Margins, which tells you if people like the products. If this were tesla, hey, consumer reports, hey, apple would be at 700. But, no, its a tortured the analysts tesla doesnt have a samsung trying to do exactly what theyre doing, right . Bmw might but i agree with that. Teslas a lot of fun. But i think there is a lot more satisfaction with apple than the analysts. The analysts were blindsided by samsung coming from nowhere. It was blindsided, left tackle, Richard Sherman came right through, didnt show that last night. So im looking that the quarter and im saying, wait a second. These were missing the point here. Samsung right now is awol. This was a really good quarter. I know ive been critical of apple when they didnt deliver. This was a total deliver. Im putting this as a lester performance, if you want to use the baseball analysis, this was good. Pitch 7 3 4 innings, pretty good. Carl icahn has done that, hes not hearing anything perhaps. He got to hear that they enjoyed didnt you get that . They said tim cook said that he greatly appreciates their suggestions. The input of shareholders. And he didnt mention the dinner. Where was the dinner . I think it was at carls house. It should Eric Lapierre could have made it so ill eat breakfast, lunch or dinner if youre coming from out of town, may i suggest danielle or jims recommendation. Yeah, use my name. Well continue to talk to our shareholders. Dont expect to hear anything from us until early next year. Maybe it doesnt mean april, maybe earlier than april, maybe its april. They bought back, what, 5 million shares on the open market, right . Spent a lot of money. 4 million. 36 billion, how Many Companies are bigger than 36 billion . They bought back most of the midcap, change. We know in the end theyve got the product line up for christmas. They say they can make it. Worldwide people still like it. The stores are doing very, very well. I did not see a lot to dislike on the call. Once they explained away the deferred revenue issue, eyes glaze over when you hear deferred revenue. You have to give away stuff and cant capture the gross margin from it. When explained on the call, mid way through, made sense to me. Got a reverse. Something that may not make sense to you is sear holding. What a segue. Its announcing its considering a consolidation of its lands end and Sears Auto Center businesses. This is part of the companys turn around plan. They reported comp sales for the week ending october 26th. This was not an earnings report, it was an update on actions to transform the business and give us a sense of Third Quarter performance. By the way, adjusted ebidta is also expected to be in an approximate range of negative 250 million to 300 million versus the prior years quarters adjusted ebidta, negative 156 million dollars. Yeah. You know, sears, they give you this press release, theres not a lot that accompanies it. They believe separating the management of lands end and auto businesses from sears will allow them to pursue their own strategic opportunities but they dont give us a great deal of detail with what theyre thinking. With lands end, they say we wont do it as a sale but a spin perhaps. And Sears Auto Centers, they tell us theyre thinking about all sorts of different ways to potentially reposition the business and separate it, including a sale. The one thing that Eddie Lampert knows auto zone. And lands end i think it was a great brand. I remember when they did the deal, many wondered why they were buying lands end. And j. Crew is no longer public, l. L. Bean is not public. How much of sears is being hurt by amazon prime, by the warehouses, the ability to deliver . You know, i have to embrace the day. Pioneer is a very good web site. I want to read that new book about bezos. It was reviewed in the times today. And i think that youre going up you know, youre painting by number and youre going up against like da vinci. Da vinci is putting up the big numbers. The comp at minus 37 is worse than the Second Quarter, they spun off stakes in canada, spun out stakes in hometown and outlets. Theres a blog post this morning titled five disturbing signs that sears is getting closer to death. Really . Death spot had an unbelievable quarter. I call it the death spot because kmart down 2. 6 with those comp store i shop everywhere, i did not shop at those places. I did buy a grill at sears. Terrific. It always comes back to where i havent shopped. I go right to the stores. Do you. And you are a source for almost all things. On sears, remember, not a great float there. Most of it is held by lampert, and the stock has been moving up. Well see how it performs today. But it is i mean, could someone buy it . Could someone buy sears . Why . Well, i know they well, real estate jcpenney is going to be selling real estate. Thats what made me think about it. This is not the home depot, where they pantsed home depot. The operating business is not so hot. This is the time of a genuine renaissance of these home companies. I had ppg on the other day, sherwinwilliams. You got kitchen, you got bath, you got paint. I mean, everybodys allsystems go but theyre not all systems go at sears. No. Theyre not all no, theyre not. Heres like radio shack. Kind of the shack. Shack attack. Thats sort of a different story. I see Something Like that. Interesting study out this morning. Market Research Group forester has published an eye opening report on facebook based on a survey of nearly 400 marketing executives and concludes that facebook creates less Business Value than any other Digital Marketing opportunity. Facebook averaged the lowest score on a scale of 1 to 5 among other social media outlets. Forester is telling people not to dedicate a page outlook its my charitable trust. I dont know. I speak to a lot of ceos who advertise on facebook. I speak to them off the record, on the record. They all love it. They all love the exposure. They have 400 ceos in this that say its no good. The amount of money thats being devoted as part of the mosaic of online spent is rather remarkable. So i found this i mean, this is a billion people, you can reach young people. I dont know who theyre speaking to but the ceos i speak to just swear by the product. It does take you back to the early days after the ipos where, for instance, gm had their doubts. And they come back. You take a guy like pat doyle, he took over when the stock was 10, its in the 60s. He says the facebook app for dominos really just accelerated the rollout because if you use dominos i dont know if you use dominos, you dont have to speak to anybody, which is really sensational. Hey, if you screw up, the orders on you. If you order no cheese, it does come back and say are you sure you want know cheese . No person would ever ask that. I think the app has been terrific and pat doyle thinks its terrific. These are youthful companies trying to reach youthful people. Twitter is starting to hear about a little higher valuation. Certainly compared to facebook. The traditional price on twitter was somewhat modest. Perhaps a smart way to go about it. Well see where they end up. I think its going to be 20 billion to 25 billion and people are going to go crazy. Thats one of your big worries over the next couple of weeks. I know the New York Stock Exchange is trying to make the deal function. Despite what the white house is saying, nbc news reports the administration knew that millions of americans would not be able to keep their Current Health care plans under obama care. Well get the latest on that after the break. Also ahead, eugene fama was awarded the Nobel Peace Prize in economics. And storm sandy, the second costliest storm in history. More squawk on the street in a minute. After your companys gone public . And the capitals been invested . Or when your companys bought another . Is it over after youve given back . You never stop achieving. Thats why, at barclays, our ambition is to always realize yours. 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. If you like your current plan, you will be able to keep it. Let me repeat that. If you like your plan, youll be able to keep it. Thats the message from the president. You heard it many times as he made his case for health care reform. In the meantime, one stock to watch is going to be coors, being added to the s p as of this friday. Doesnt stop wells fargo to cutting it to market perform today saying they like the story long term but concerns on valuation . It is probably not tesla valva valuate valuated. Tesla, solar city, those are anointed. But wells is being very disciplined. They look the stock, had a price target. Once somebody doesnt bumps price target we had a lot of apple target. I hate that. You got a price target, you get there, you nailed it, well done. Amazing. Feels like its getting added to the s p relatively quickly after coming to market. He did sell a lot of stocks. Maybe its floaty enough. In the meantime, that Health Care Story we mentioned, lisa myers broke the story last night and has more. Lisa, good morning to you. Reporter good morning, carl. Tell us about the reporting you did and what the administration told us for many months. Reporter when we began hearing about all these cancellation letters or letters saying your health plan doesnt meet aca standards and therefore were going to have to terminate it, we decided to get a feel for how many that was going to be happening. We are looking strictly at the 14 Million People in the individual Health Insurance market. What we found was we dug back to old aca regulations from december of 2010 and found that by their own estimates, 40 to 67 of the folks in that market would not be able to meet the standard to be grandfathered, which means they could not keep the policy they had. So what the bottom line is here is that the administration knew at least three years ago that many, if not most of the people in the individual market would not qualify to keep the policies they have if they want to, which of course is one of the president s fundamental promises. And of course now we have potentially, lisa, some litigation led by ron johnson of wisconsin to potentially grandfather some folks and be able to keep some of those substandard plans. Does that seem like something the administration would be behind . I dont think so. When you look at the regulations, beyond the fact that they thought the churn of the market would keep most folks from being grandfathered, they also wrote the grandfathering rules in such a way that even if you have the same policy you had as of march 23rd, 2010, if you had a significant change in your deductible, your copay, benefits, anything like that, then you lose the right to be grandfathered. And because in this market those kind of things tend to change a lot. So they basically wrote the grandfathering rules in what experts tell me was like the narrowest possible way. Lisa, congratulations on just a fabulous story. Great to see you on our network. Reporter thanks. Im hearing a lot of people are willing to say well take the penalty, pay the 2,000 and get rid of the health care because its so much cheaper to do that. Are you hearing anybody putting that through . Reporter i hear frustration of people saying like that but when it gets down to it, thats awfully risky. Youre risking personal bankruptcy if you get sick and have no insurance at all. Ive heard of youngers people doing that but ive heard people in their late 50s who were shocked by the size of premiums when they were offered and didnt want to pay for Maternity Care and what not when they werent going to have any more children. Lisa, thanks again for your reporting on that. Lisa myers joining us from washington. She is good. Bringing home the profits, thats what cramer is all about. Well hear what he has to say next in his mad dash. Futures look okay here on a tuesday morning. Well get to it with the opening bell in just about seven minutes. Its as simple as this. At bny mellon, our business is investments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Roller coaster of love, roller coaster five minutes to opening bell. Time for mad dash on this tuesday. One of my favorite companies, david, the press release was so negative. I wanted to call the guys and say let me talk you off the ledge. It aint that bad. Truck sales theyre saying are really terrible. You see it down 10. A lot of analysts going to downgrade it. I think its troughing. Any reflection on the industrial economy . You know kleinfeld. Alcoa is up 1 since that call. 1. 25. Told you that trucks were a little bit hurting. Eaton, sandy cutler said trucks are troughing. You knee what this makes me feel . Makes me feel a little better about caterpillar. A lot of people where the gang couldnt shoot straight, i myself was kit call about it. Cummings is a great company. It has a lot to do with mining trucks. Mining trucks. But im not walking away from cummins, even if they tell me to its too great an american company. And get a chance to buy it cleaner today. All right. Were going to keep an eye on stocks, including whats coming up at the opening bell. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the American People. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. 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