The Conference Board reporting confidence rose 81. 5 from 80. Consumers more upbeat about business, jobs and earnings progress. David syria for ministers said they would use all means available to defend itself in the event of a u. S. Strike, one day after u. S. Victory of state said there was no doubt this odd receiver thasad regime was usin. Cheryl sparking a rally in oil of 3. 09 settling in at 109. 01 per barrel. This is the first time that contract has closed above that level since february 2012. David u. S. Authorities are demanding jpmorgan pay more than 6 billion to settle allegations is missold securities. The bank is said to be resisting that demand. A whole lot more after th aftee bell starts right now. Lets get to todays action, schaeffers Investment Research in your technical strategist, last recommendation 31 since we told you, for new place for you, and in the pits of the cme. Good to see you both. I want to see where folks are parking their money right now. Taking out of stocks bigtime, where are they putting that money . Holding onto cash . Lets be serious, we are in an low attendance environment as it were right now in the s p 500 in the stock market causing people to draw everything out whether it be emerging market, the deficit, tapering. Syria is the culprit of todays action and it intensifies the act. It seems to be more of a buyer strike than massive sellers. Cheryl you believe the market is looking for a bottom pushing toward the bottom at the same time syria seems to be the cause. If we have more escalation, does the market continued to trend lower or is this a bottom for the market to find . The issue of syria. Speaker that is a great question. It spirals out of control hitting the market. We pulled back about 5 , less than that on the s p. If you look at the fear index, we have seen a huge spike in fear. Marking the short term bottom. A lot of the moves in fear. Above 35 . The s p up about 2 , average of 75 of the time. Up 6 straight times, never happened before. The security headlines, but we have seen this before. If we have good news we can get surprises. David when they panic, you are happy. It is interesting while everybody else is running for the hills, you have upped your yearend figure. That is a very bullish call for a moment like this where everybody is selling. That is right. We came in at a 15 target. When you look at this market, september, take a look at september for a second. Heading into the month of september it is only happened five times last 20 years, september has been higher, so the last 10 years septemberis up 7 times. I see a lot of similarities to what we had where the me has been positive, lots of fear coming in with weakness in september really getting a spi spike. That is how you can have a good bottom in my opinion. Cheryl september 18 we will get news from the fed. We will see tapering again on that day. Is it the biggest in our opinion . Everybody has become comfortable with what the fed is not going to do. Maybe it will be less than 10 per month and something bigger than that and it seems again from 85 down to 75 is not that big of a number. People are a lot more concerned with succession as opposed to the tapering since the equity market has become very comfortable knowing they are tapering for the right reasons and Interest Rates are starting to taper just a little bit. David what are they tapering . They hold treasuries and mortgagebacked securities it you say you saw something in the last fed notes that indicated they may hold onto the mortgagebacked securities until the end. Speak our vast majority of the treasuries. David what does that mean to the investor . Knowing the fed is interested in forming a security around the housing ray boom, how is that going to invest . Does that mean it will be a good investment right now . A good investment is the housing, financials and even materials. Where in the infancy of a housing boom, it will not be like we saw years ago, in a very infant stages of a fiveyear flight, just starting to climb out of that. Housing financials materials will win the day. Cheryl the russell had a really rough day, the worstperforming group looking at the major averages, you like small cap. Are you looking for deals . We do think it is an opportunity. We had a really nice july rally, now we are pulling back to about that area. That is a good sign. Significant short interest, what does that mean . That is potential buying pressure, better news to come in, that can push it higher. David that is down 4 today, i bet you are buying that, right . Exactly. Financials are still an area they roll off the highs, but so a lot of room. David down 4. 4 today so this is it. We will see you in a couple of minutes when the futures close. Cheryl one my manager says the next big economic train wreck is on the way. Investors are missing the warning signs. What is it and how can you be prepared . David a new test that could prove more important for students future getting set to launch and businesses may use it to judge a students real value. We will talk to the developer next. It brings us this question. Who is better at judging the value of a College Education . Colleges are businesses, and why . We will read your answers later this hour. [ male announcer] surprise youre having triplets. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] surprise your car needs a new transmission. [ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. Its just common sense. Help the gulf when we made recover and learn the gulf, bp from what happened so we could be a beer, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, whe experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produce energy more safely. Our commitment has never been stronger. Cheryl most of the market in the red today. Lets go back to Lauren Simonetti on the floor of the new york stock exchange. Lauren excited about this one because i can finally talk about it ending. Lets show you goodyear tire. The company said the new fouryear contract with the Steelworkers Union gave them the ability to freeze the benefit pension plan and move to contribution plan. The reason the market is rallying is because it gives flex ability to do a couple of things. To reduce staffing and also to reduce earnings paid out under the profit share plan. Being interpreted as a good thing. David s p futures are just about closing. Look at who is here, sandra smith on the left. What is the market telling you about tomorrow . Will people be buying into this dip . Sandra we are seeing investors in general pouring into the commodity market with oil prices spiking to multimonth highs. 18 month highs. There is the safe haven play going on here, but everybody is focused on the oil market. David, everybody says why should i care . It would affect the surrounding countries, so these markets in chicago are very focused on all the happenings on syria and what the u. S. Will end up doing. Word is something will happen by thursday. Investors are pouring in. Cheryl that is a really good point, sandra. There is really some problems in europe, getting some statements from the ecb. Your eyes are on italy right now. Back and throw a Monkey Wrench into things. Growing their way out of a recession, taking so long not even in baby steps yet. When it comes to the elections or italy it could derail everything people are pinning their hopes on. The rotation out of europe, things on the up and up outside of italy right now. David the bottom line talking to the traders when i look at the overall equity market do they think we are forming a botto bottom, or is this a Bottomless Pit we are falling into . You are not seeing a mass exodus many might think if we see the fed pull out of the seamless program come this fall. Large expectation on the Trading Floor that we will not see the fed pull out altogether. They will ease off and not get out entirely. We are not seeing a massive selloff. We are not seeing an exit from the equity market, that is for sure. The little bit of volatility as well. David they just dont believe the fed is serious about tapering. The price of gold would not pop the way it did. That is like mcdonalds money. David the fed is losing a little credibility. Good to see you both. Cheryl it has been one train wreck after another in europe after the last few years. Wmuch of the region is still stuck in a big economic mess. Even the french. David particularly the french. Investors have to have on their radar. Millennium wave advisors. For all the talk there has been a lot through the past couple of years, but we thought we were kind of moving into a bottom now, some of the countries had seen the worst of it but you say france in particular is about to explode, in what way and why . Lets go back to four years ago everybody was telling us greece was not a problem, they will work it out beginning to turn the corner, getting all the happy talk from everybody. We are getting the same thing from france today. The french are not dealing with their deficit, they are not dealing with a massive debt buildup, their economy is going down rather than up, they have not done any kind of a recovery, tax increases are beginning to take hold, collec click less m the rich when they raise the rate. Cheryl you are talking about the 75 tax on the wealthy in france, not just celebrities, but a lot of americans working over there in banks and france. That was a pretty aggressive move to deal with the deficit. You say that didnt work . No, it isnt going to work. What happened when they raise their rates to 50 . They collected less money because they left. That is happening in droves in france. Business investors are going this is enough. We are out of here. France is a contra does not collect taxes if your if you ag in another country. So their income is going to go down. In addition their country is in a slump, in a recession, it will continue to get worse, collect less revenues, the deficit will be much higher than what they are projecting. He did not see italy rate spike up. We are in the precrisis phase. Four years ago you could buy great rates at 2 . Today you can buy french bonds and you get less interest than a u. S. Bond. Cheryl hard to see it. The french riot much worse it may burn tires in the middle of the road some of the terror up straight, they shut down presentation systems. The problem i have is that the government has made a commitment to their union, labor market and they dont have much of a way to pull back. The trigger point we can watch later this year, europe is going to have to deal with portugal. Portugal is a problem, there is no other way to get portugal out of its problem than some kind of default. We wont call it a default, we will call it restructuring, but that debt is going to have to be restructured focusing the mind on italy, spain, especially if there is any impairment to the bond because of there is any impairment at all, portuguese banks will be bankrupt. The country as opposed to bail is banks out. It does not have the money to. You cannot turn around and bail your banks out. That is going to make investors in italy and spain look and go oh, my god. We have just seen what they did with cyprus, i was just over there a few months ago, i he tok a 60 haircut over 100,000 euro. We are going to see haircuts is what they are talking about. David are you shorten the country . Use the future too short the 10year bond. David imagine a new test for College Seniors that could be a benchmark for potential employers. It is about to become a reality but will it do anything to prepare College Grads for the Global Economy . Cheryl some of wall streets biggest players are set to cut designs of a key business that has been one of the biggest profit drivers. Everything u. S. Investor needs to know. Cheryl time for a quick speed read of the other headlines. Five stories, one minute. Jpmorgan former london wells advisor was arrested in spain after being charged with wire fraud and conspiracy to falsify books and records. Beta release on condition he checks and regularly with a court. Starbucks taking evolution harvest to whole foods. It will begin its aggressive plans for growth in colombia by opening up the first store next year. Bookshops growing. Sales and independent bookshops rose 8. 8 last year while many chains saw a drop in revenue. Yahoo being to redistribute email addresses and names. Handing out abandoned ids to new users charging 1. 99 request a name. Facebook rolling out shared albums on the site allowing users to share access to an album up to 50 contributors would each contributor adding up to 200 photos. That is todays speed read. David good work. You did it. The most popular article in yesterdays wall street journal include an new test many College Seniors are going to be taking next spring. Not a test put together by their schools on behalf of the businesses that actually ma maye hiring the graduating seniors. Is this an indictment of the standards they are paying tens of thousands of dollars for . Joining us now counsel for aid Education Board members. This is a new yorkbased nonprofit that has developed. Congratulations. Im surprised colleges are accepting of this because in a way it is an indictment of their own standards, is it not . We have been doing it now with colleges exclusively for several years, it gives them a different way to measure their performance. We have been testing a random group of students as they come in as freshmen and again at the end of their senior year to see how much they have learned. David you are a businessman yourself, you still dabble in business. One in four Business Leaders by a survey done in 2010 believed colleges are not even doing a good job, not even a good job so one in four business only one in four think it is doing a good job. Business leaders dont trust colleges to write the performance of their students. Last years graduating class had an average gpa of 3. 3, somewhere between an a and a b . It does not tell me as employer much about the students if theyre all basically in the same range. David employers do not trust college standards. The point i was trying to make on the open was we have been working with universities and colleges for a number of years to improve what they are doing. David do you believe a grade point average is a lot of graduates put on the resume is a poor correlation to Job Performance . I can think of the smartest kids in my class and i graduated some 50 years ago from college the smartest kids went into academics, they did not go into business. The most successful were see students. Our test fundamentally test complex problemsolving and written communications skills. These are things businesses really value. It is not how much history you have learned or how much content you have managed to memorize, it is can you solve the business problems . David why cant colleges get that . They are. David having to hire outside of their facilities doing their work for them. Colleges and universities have always hired thir thirdpao measure performance. It is much more credible if in fact you have outside people keeping track whether it is your auditor or administering the test. David i have a daughter in college, i spent 60,000 per year, it is a great school, and nice, safe place for her to go, but i am not happy about the fact the standards are irrelevant in the workplace. I feel the same way. I have a student in graduate school. Either an a or b. David doesnt that mean we should ask for a refund . I believe it is that kind of instrument. David we appreciate the work you are doing, we need something else. I would like to have report within the industry as well. Thanks a lot, appreciate it. Cheryl lost the gorgeous daughter of yours up, by the way. She should not be in any college. Im kidding. Financials the big performers, but rising Interest Rates are forcing banks to cut back on the most profitable business. Which are setting us up for the most . The top analyst will tell us. David will outsourcing and global, edition kill what is left of the traditional backbone of america . An inside look into the strength of the u. S. Manufacturing industry. Yes, there is a come back we are here to tell you about. Straight ahead. Cheryl the most lucrative seg amendment for banks is the revenue from Interest Rates from businesses plummet. David what is the rate businesss Biggest Issue . Which banks are suffering the most . Joining us top financial analyst brad hintz from sanford bernstein. Bottom line, fixed income isnt dead. You have a millions and millions of baby boomers coming into retirrment. They have seen two debacles in the equity market, the dotcom bust and the financial crisis of 20078. Theyre not ready to go full speed into equities. There has to be some hybrid which allows them to be satisfied with some fixed income . Because people are saying fixed income is dead. It is not dead, is it . Fixed income is not dead. If you look at Financial Management firms they are rolling out hybrid products. David what does that mean . One of those wall street acronyms. You have a sleeve, fixed income product, bonds and you have equity products. The idea in a uncertain environment the Portfolio Manager at the top can move your money back and forth between the two. Its a great idea. That says i get a little equity return and i have my downside is limited by fixed income. This is where we touch wood and weve seen a lot of wall street products that havent worked. This is a new version. I hope it works. Tell you the truth my merrill broker put me into some of those. So you know, im a bibby boomer, youre absolutely right. My Risk Appetite isnt what it was say in 2006. Cheryl you know, that is almost a hedging strategy if you will. Actually i have a similar strategy in my portfolio. I think im on the same page here. At the same time the big banks such as Morgan Stanley figured out the Fee Structure associated with these products is a great profit driver. Thats right. Cheryl thats fi