Transcripts For CNBC Closing Bell 20121025

Apples earnings that will be out after the close. Right now at 2986 on the nasdaq. The s p is up 2 3 4 points app 1411. So whats the market looking for . We had some good Economic News this morning. Earnings mostly positive, though we cant seem to get a rally going. In todays closing bell exchange, je ngentlemen, good have you on the program. Jim, let me kick this off with you. Talk to us about what youre seeing in terms of the backdrop earnings as well as Economic Data and how they fit into in terms of the valuation of this market here. What do you want to be doing . Were longterm investors, and were fairly optimistic that this things going unfold fairly well. Right now were kind of held in the cross currents of earnings reports and the anticipated election, the uncertainty that goes with that. We think once we get over the election hump that the markets going to look a lot better and then this is jim moffitt speaking, right . Yes. So youre optimistic long return. Jim bianco, any thoughts on that . The earnings numbers right now this quarter, theyre not good. About 60 of the companies are beating estimates. Thats the lowest number of Companies Beating estimates since the Great Recession ended. Only about 30 of companies are beating revenue. Thats a 15year low. Its worse than it was in the collapse of 2008. Guidance hasnt been good. We have more companies guiding downward than upward for the First Time Since the Great Recession ended. All that is probably the culmination of gdp. The economy is going down. Now its catching up with earnings and guidance. And, in fact, ryan, you think this market is facing the fundamentals that jim was just talking about versus the fed. Fundamentals versus fed, which is trying to prop this market up right now. Which way do you vote . Well, i think longer term you have to be bullish on the market, although theres a lot of shortterm uncertainty. The one positive is, of course, the fed continues to pump liquidity into the markets. That should put a floor under things. Its a good point. Rick santelli, what are you seeing in fixed income today . There was a debate about whether or not the euphoria over the fed has gone away, but ryan makes a great point. This is a continuous buying of mortgages every month. If the euphoria i see around me was a flower, the petals dropped a long time ago, maria. In terms of what im seeing here, you know, its interesting. Everybodys looking for the major steepening of the curve because short rates are nailed by the fed. Long rates are reflated or doing the reflation trade. Whats interesting today, fiveyear no yields are had a half a year high. I find that fascinating after the fed statement yesterday. So Interest Rates might not be percolating in aggressive fashion, but they certainly seem to have taken the selloff of late in the equity markets in stride without rallying price and pushing rates down very aggressively. Jim moffitt, as you do look out longer term, youre looking past some of the political wrangling, some of the economic difficulties. You feel the emerging markets will emerge once again as a good investment, yes . We think primarily that the drivers going to be the u. S. , that were doing better in terms of earnings and stuff now is a lagging indicator. When we look out further into next year, we think its going to be a better year. Thats going to help the rest of the world. The ones like mexico and latin america are tied more directly to the United States. So you must believe that theyre going to fix the fiscal cliff if you think things will be better next year. Well, we think theyll muddle through eventually. Our best guess is theyll kick the can down the road between now and the new congress and administration and the pressure will be on that at some point theyll work things out. Hopefully in a fairly reasonable manner. I mean, its another two years for the next election and four years until the next president ial election. So maybe theyve got a little incentive to sit down and talk now. Yeah, wouldnt that be nice . From your mouth to gods ears. Jim bianco, what are you looking at right now . What are you buying . Im really looking at the election. I think this market has been all about monetary stimulus for the last two years. The rally weve had since june has been about qe3. The concern weve had in the last few weeks other than earnings has been a romney presidency, means bernanke gets replaced. Thats whats driving markets. Unfortunately, the answer for investors is going to have to be the election and who replaces bernanke over the next six months or so. Once you get past that, i think you can get back into ma wha the policy differences would be. For now, i would stay neutral to long stocks because im not 100 sure that romney is going to win, but if i thought he was going to win, i think that would be a shortterm negative only because it changes the equation with with the fed and not necessarily with policy. So short term negative for stocks . No, shortterm because theres a real debate there. The equity guys say romney would be a shortterm positive for equities. If romneys elected and bernanke leaves, that changes the equation. Thats, i think, a concern thats been in the market for the last week or so. I understand what theyre saying about the shortterm positive. But i think this markets about monetary stimulus. Its about the fed. Thats whats been driving it. If romney wins and bernanke leave, the feds gone. Thats what the market is worried about. All right, gentlemen. Thank you for your thoughts today. Appreciate it. Well see you soon, guys. Thanks. All right. Heading toward the close here with about 53 minutes left in the trading session. Here we go again. Hugging the unchange level, wondering whether were going to have an up day or down day. There are a number of companies actually hitting new highs. Were going to get to that after this short break. Even with the lackluster performance, weve got some good winners here. Dont go anywhere. Were just Getting Started on this jampacked edition of the closing bell. Coming up, simple arrhythmia tick. Ceos Tell Congress and the president to get their act together and end our fiscal crisis. It just so happens we have one of the most outspoken. E it tna chief breaks down the formula to fix our deficit next. Plus, a is for apple and amazon. A comprehensive look at earnings from top analysts is all still ahead on the closing bell. Mike rowe here at a ford 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. Buy four select tires, get a 60 rebate. Use the Ford Service Credit credit card, get 60 more. Thats up to 120. Where did you get that sweater vest . Your ford dealer. Welcome back. Ceos coming together today to pressure washington to get the fiscal house of the United States in order. 80 ceos from some of the nations Top Companies signed a letter that they will accept tax increases that come with sensible spending cuts. Basically what simpsonbowles is. Some of these very ceos came to wall street this morning to ring the opening bell. Take a look. One of the more outspoken ceos on this issue, hes been a spokesman for the group, is etnas ceo, who joins us in a cnbc exclusive to talk about this mornings Third Quarter Earnings Results and about the move to try and get washington to get its act together. Mark, good to see you again. Welcome back. Thank you, bill. Good to see you. Well get to your companys numbers in a moment. Lets talk about this effort by you and, what, 79 i think there are more than 80 of you now, who have signed this letter asking washington to get their act together on the fiscal cliff. What are your expectations . I think most people dont understand how business works and the economy works. This is an important point. We are all now putting together our operating plans for 2013. The less certain the check environment, the more contingency and less investment we make as organizations. What specifically are you concerned about thats keeping you from putting your Business Plan together . If we go over the fiscal cliff, were probably looking at a negative 1. 7 gdp for the first quarter. That means jobs and that means that Companies Like ours are going to have to pull back on their Capital Investment. So we need to protect against that as we put our plans together. The better certainty, the more willing we are going to be able to put Capital Investment and jobs back into the marketplace. Do you have any clarity right now now . Right now is the time when everybody is putting their 2013 budgets in place. Is it fair to say its shot any way at this point given the fact we are not going to have a decision on this at least until after the election . Our view, maria s that what were doing is gating our investmentin ins investments. The sooner we get clarity, the sooner we can invest in the economy. I would suggest that after the election, november 7th, we get together, whoever is in office, and put together at least a memorandum of understanding about what both parties commit to, both bipartisan support, and when it will be done and what the consequences are if it doesnt happen. I know you have already said that Something Like the simpsonbowles framework would be acceptable. 3 of spending cuts for every 1 tax increase. Is that what youre espousing right now . That, plus probably some more focus on programs like medicare and medicaid and social security. So were going to have to have some entitlement reform, a little more significant than bowlessimpson had, and probably revenue thats more significant than bowlessimpson had. Times have moved on, and we need to act quicker and have more impact. Its around that same framework with more juice to it. I guess you also have to consider the Health Care Legislation and the expense that that brings with it. Of course, if romney win, he wants to repeal that. So that is also clarity there. What about the tax code . What do you think the most sensible way is to change the current tax code . I think we need to have a tax code that allows for Global Competitiveness of companies, a tax code that has fewer deductions and fewer exceptions. So we need to broaden the base, as we say. More taxpayers. We need to have a lower rate, and i think in the end, i mean, quite frankly, we keep saying its going to increase revenue. Increasing revenue ultimately says that somebodys going pay more taxes. Do you agree with governor romneys plans regarding Tax Deductions and exemptions and leading you to choose what deductions are going to be out there . The devils in the details on that. So we need to get that on paper. Thats the kind of certainty we need. Thats the kind of things were going to look at. I think weve been too short on details in anybodys plan to date. Its getting those details on paper that matter. Well, what about your own business right now . Lets go into earnings for a moment. You raised the 2012 outlook and expect 2013 earnings to improve. Whats driving the performance . Can you characterize business for us . Sure. First and foremost, its a diversified portfolio. We are in all lines of products. That matters in a market where various sectors like medicare and medicaid come at risk or do better at certain times. Our portfolio balances our performance against our whole line of business. Secondly, weve been able to price into the market responsibly along with utilization, which the economy has allowed us to have stronger earnings than we anticipated. I know youll take this question in the spirit in which it is sent there. Mark, how do you reconcile what youre saying about your company with your concerns about the uncertainty regarding the fiscal cliff . Doesnt sound like your business is hurting. Thats a very important point, bill. I think what we have in American Business today is the equivalent of closing the castle gates during the plague. Each business is preparing to protect itself. That does nothing to prepare the economy. Ultimately, if we dont get the economy going, we all fail. So longer term, this is very important to get the economy back on its feet because we can, in the short term, as businesses, pull back on our capital budgets, pull back on employment and prkt our earnings. Thats in the end doesnt promote the american economy. More importantly, it puts people out of work. How does your business change or need to be resized if, in fact, the president wins reelection and the health care expense stays in place as a result of that Health Care Reform . We will have a consumer marketplace and consumers are going to want something thats very simple and affordable. Quite frankly, given the current legislation and little impact on Underlying Health care costs, premiums are going to go up in 2014. Its what were calling the rate shock. People are going to find it difficult to afford health care. So were going to have to do our part as a company to reduce those costs and make our product more affordable. Mark, always good to see you. Thanks for your time. Thank you, bill. Thank you, maria. Thank you so much. 40 minutes before the closing bell sounds for the day. We have a margin thats fractionally up and down. Up five points on the industrial average. Meanwhile, microsoft ceo making a bill sales pitch for windows 8 here on cnbc. Windows 8 gives you tablet. It gives you pcs. You can have both, no compromises. Windows 8 is for work and play. Win dodows 8 is all about you. Is there any better salesman . Will this finally provide a window of opportunity for microsoft investors to make money . Then, these two companies could determine what happens to your money tomorrow. Apple and amazon with earnings after the bell. Well have complete coverage of the results and what they mean to you. Stay with us on closing bell. Im a conservative investor. I invest in what i know. I turned 65 last week. Im getting married. Planning a life. There are risks, sure. But, theres no reward without it. I want to be prepared for the long haul. I see a world bursting with opportunities. India, china, brazil, ishares, smallcaps, largecaps, ishares. Industrials. Low cost. Every dollar counts. Ishares. Income. Dividends. Bonds. I like bonds. Ishares. Commodities. Diversification. Choices. My own ideas. Ishares. I want to use the same stuff the big guys use. Ishares. 8 out of 10 large, professional investors choose ishares for their etfs. Introducing the ishares core, etfs for the heart of your portfolio. Tax efficient and low cost Building Blocks to help you keep more of what you earn. Call your advisor. Visit ishares. Com. Ishares. Ishares. Yeah, ishares. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Welcome back. Another squeaker today on whether we finish positive or negative. Some positive earnings this morning. Some mixed data on the economy not helping right now. The dow down three points. The nasdaq is up a point. So is the s p as we head toward the close with about 40 minutes left. Meanwhile, microsoft set to launch both its windows 8 operating System Software and surface tablet tomorrow. The ceo made the sales pitch right here on cnbc today. Hes also keeping an eye on the head winds in the economy that could hurt both of those products. Our john ford sat down with him to get us details. Yeah, obabalmer talked aboute economy. He said there doesnt think there are many barriers now between domestic economies and global because were all connected. So this fiscal cliff is a big deal for everyone. The question is, overall, do we have a little bit of a fiscal cliff facing the world at large . I think the answer is, yeah, we havent work eed our way fully through the bubble that got built up. I think the powers that be have been trying to decompress, but i think theres probably more to come. I also asked him if theres one issue that he could fix related to the u. S. Economy, what would it be . He said if we could fix intellectual property theft, piracy, microsoft would be able to add tens of thousands of job in the United States alone. He said he would rather hire in the United States than anywhere else, guys. John, thank you so much. So will windows 8 be a real game changer for microsofts stock . Thats what we want to look at in talking numbers. We have richard ross and brent phil. Gentlemen, good to see you. Thank you so much for join pg us. Rich, take us through the charts on microsoft. Is it a buy or sell in your view . Well, mooi kro soicrosoft is a relative and absolute basis. Lets look at a relative substantiate point first. Weve charted it against the xlk. You can see clearly this dramatic underperformance that began back in 2010. Here we have the benchmark etf pushing out to fresh highs. Microsoft virtually unchanged over the last three years. Thats your first red flag. When we look at it on a stand alone basis, the picture doesnt get any better for microsoft. This is a year to date chart. Your first warning sign. Microsoft takes out the 200day in decisive fashion. Thats your second warning sign. Finally, we break below key support back here at the lows we set earlier this year. Its also a 50 retracement of the entire advance from the december low into the high we made earlier this year. Another red flag. We think that set the stage for a retest of those lows down around 24. Microsoft is a stock you want to be underweight as a part of a part fo portfolio on a stand alone basis. Thank you for that. Brent, you rate microsoft a buy. Whats your bottom line thesis . Stocks going higher. We think you simply put a ten multiple on next years earnings. Youre going to get to 32 on the stock. We have a higher target because we think that they can continue to drive good earnings and revenue upside into this product launch. I think investors are too focused on windows 8. Theres a broad family of products that microsoft has available thats going to touch all of our lives, whether youre a consumer or enterprise. I think its been holding up. You see that in the recurring revenue. You see that on cio surveys. We think theres a lot more behind the scenes than just windows 8. So how much higher can it go in your view . We think the stock can go to the low 30s as a pit stop. I certainly think to the mid30s. The sent inspeiment in microsof terrible right now. We certainly believe for Software Investors that we have higher beta growth stories like a salesforce. Com. But as it relates to a value story, the stock has a 3 dividend yield and trades at a frit low multiple into a product cycle. Street numbers have come down. Theyve been reset ahead of this launch. You make a great point. Rich, sometimes Great Companies are not great stocks. Look, theyve fallen behind in search, mobile, tablets, social networking. Those are four Big Technologies over the past few years. All right. Gentlemen, thank you so much. We appreciate it. Bill, back to you. We got a market on our hands right now with about 35 minutes left in the trading session. The dow down a point and change. Still close whether well be finishing positive or negative. Jetblues profit took off despite sky high fuel prices. The ceo will join us exclusively straight ahead. People say you have to trade the airlines, you cant own them. Why barcher says thats not the case with his Airline Coming up. P. Also ahead, hurricane sandussandy is slamming the caribbean right now. 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You know ronny folks who save hundreds of dollars switching to geico sure are happy. How happy are they jimmy . Happier than a witch in a broom factory. Get happy. Get geico. Fifteen minutes could save you fifteen percent or more. Welcome back. Oil up a bit today after taking a big hit the last few trading sessions. Bertha coombs doing duty today for us. She has details. A little bit of an oversold rally. We have crude breaking a fivesession bruilosing streak. The big winner on the day was really the rbob contract, the reformulated gasoline contract. A number of traders moving into that trade late in the session ahead of hurricane sandy. Expecting a will the of folks will want to fill up their tanks before that storm makes its way up the east coast. That will likely boost demand. Now, gas today, though, sitting out the energy rally as the weekly injection was right in line and the feeling is were not going to see too much more demand. Bertha, thanks so much. Coming up in the program, Lowes Corporation ceo is here exclusi exclusively. Hell explain why our nations abundant Natural Gas Resources are critical to creating a booming economy. Join us in the next hour for that. Meantime, shares of jetblue not getting the boost many might have hoped for after reporting a 29 increase in quarterly profit. It beat the streets expectations by a penny a share. Its up a penny itself right now at 5. 21. Joining us now is dave barger, jetblues ceo and president. Always great to be here. Before we get into the fare business and your business, what are you expecting out of this hurricane . Does that change or dictate your plans . Well, sure, it could. Sandy is maybe its not irene, but its also wreaking havoc. Florida looks to be out of harms way for the most part. Well see. You already had to cancel flights because of whats going on in the caribbean. Weve done the same. Obviously, let people know ahead of time. Get people out of harms way. Were prepared for next week. You assume the worst and see what happens. You know, between that as we watch the possible track of sandy, what happens with fuel prices, the state of the economy, the fiscal cliff, what a crazy business youre in. Ill tell you, bill, i think its why i love the business so much. I mean that sincerely. There are so many variables when you look at running an airline. So not the least of which is you talk about just market caps of airlines. When you aggregate market caps, there are many individual Companies Worth much more than the Airline Industry in the United States. But these variables, mother nature, technology, cultural differences, capital. I mean, hey, listen, you better love it, otherwise get out of the business. So what are you expecting in internshi terms of oil right now . Do you think well see prices moving higher . You cant really plan your business because nobody knows. You really cant. Most importantly, i think a young fleet which we have the youngest fleet of any carrier. Technique really makes a difference. In terms of pilots and technicians, our grand staff, what they do day in and day out, you cant predict where oil is going. We have a hedging policy in place. We have fixed forward purchases. After that, just run a really good operation. The number one way to really reduce fuel burn, run on time. Pretty amazing stuff. Pretty simple. That is pretty simple. Thampblts al that also makes the customer happy. How do you assess the state of the economy right now . We all remember how bad the airlines were hit in the prices of 08. All the bankruptcies that were filed that the time. How is the traffic load right now, and whats your outlook for the beginning of the next year . Bill, as were sitting here now, traffic is actually quite good. We saw a little bit of a slowdown in september after a really robust july and august. Mainly the leisure customer. Were seeing strength there. The holidays are very strong. This is really good very time of year for jetblue. Were looking at a gdp number that looks like 2 over the course of 2013. For curve of oil, your guess is as good as mine as we track brent. As we look at cpi index of probably 2 as well over the course of 2013. You were not among those ceos that signed this letter urging congress to get their act together on the fiscal cliff. We just had mark on from etna. He did sign that. How does that impact you guys . If asked to sign that, i certainly would participate in that. When you start to look at the debt levels of our nation, i mean, this is really, really serious business. When you talk about creating jobs, small businesses, mediumsized businesses, i absolutely would have signed on to that letter. We have to knock that debt level down. How do bookings look for the holidays . Really, really strong. We have new marketing were opening up as well. More down in the caribbean and latin america. Some in colombia. Our company is growing. Were growing because were seeing some really, really solid traffic. I love what youre doing around the election. Youve got a promotion to fly voters out of the country if their candidate loses. Whats the reception youre getting . Its really solid. Its election protection. So this is really weve always been irreverent. So having fun. 2012 tickets, right. So its 1,006 round trip tickets. Go online, jetblue. Com. If your candidate wins, great. If he doesnt, you might be looking to fly out of the country. Youre going to have to come back though. Its something i would expect herb keller to do at southwest. Dave barger is outdoing herb keller. Its hard to outdo the team at southwest, but well always take a shot. I appreciate that. A lot of fun with this promotion. Who are your competitors now . In the new york marketplace, i mean, really you have to look at what delta is doing. Along the east coast as well. Really, across the country. I mean, were side by side with southwest. Were side by side with delta. The list could go on as well. Really, here, where were concentrated, 70 of our flying is new york and boston. For the most part, that really talks about delta. Theres some u. S. Airways in there. Theres some american in there as well. Lots of southwest. Its a very competitive landscape. Sure. You guys youre almost like banks now because you have found a way, a business model, where you can let the customer dictate how much theyre going to pay for the service theyre going to receive, the size of the seat, the amount of leg room, whether i get a pillow, how many bags im going to put on. What else am i going pay for down the road . Where else are you going to written out more revenue in this business . Ill tell you, bill, it depends on your point of view. First of all, from our perspecti perspective, we dont nickel and dime the consumer. Heres the core product. If you want to purchase up to more leg room, hey, have at it. Thats a 150 million ancillary fee stream to jetblue. You still have Award Winning product. The rest of the industry, when you look at the ancillaries, interesting. Whens the last time you really the question took place with a Hotel Operator who will be on the show regarding ancillary fees when you logn to wifi or Something Else that takes place. Our industry is just saying treat us the same way. In fact, when you go back over the last 21 years, 1990, fares, which then were just under 500. When you adjust them from a cpi perspective to 2011, that fare is now 365, including the ancillary revenue stream. One last comment for you, 2011, the profit, 77 cents per customer. Were doing this because its really, really important to mainly offset the cost of energy and aircraft. Is there still too much capacity in the air . Will we see further consolidation after the deals weve already seen . I absolutely there will be further consolidation. I think its good for the industry. We dont plan to participate. Independents, organic growth is h our plan to go forward. Some of the markets have level set now in terms of capacity. Theres still more activity i think is going to take place. Thats going to be good for the industry. I really believe. At the end of the day, this is the industry that we have never even talked about covering the cost of capital. This is really serious business. I know were focused on it as is the rest of the u. S. Based airlines. We need a healthy u. S. Airline industry in this country to drive that economy, to knock down that debt. For sure. Good to have you on the program. I dont know if you have a flight to catch, but were going to let you go. Not tonight. I appreciate it. Were in the final stretch. 20 minutes before the closing bell sounds for the day. Market flat that the hour just a fraction. Dont fight the fed. Our next guest says investors moving out of stocks are making a huge mistake. After the bell, full coverage of earnings from apple and amazon. Well get instant analysis from investo investors. The numbers may well drive the numbers tomorrow. First, before we go to break, the dividend. Which companys stock with earnings out tomorrow morning is this years outperformer . Good year tire, merck, or Newell Rubbermaid. Bob. Oh, hey alex. Just picking up some, brochures, posters copies of my acceptance speech. Great its always good to have a backup plan, in case i get hit by a meteor. Wow, your hair looks great. Didnt realize they did photoshop here. Hey, good call on those mugs. Cant let em see what youre drinking. You know, im glad were both running a nice, clean race. No need to get nasty. Heres your honk if you had an affair with taylor yard sign. Looks good. [ male announcer ] fedex office. Now save 50 on banners. Just before the break, we asked, which Company Stock with earnings out tomorrow morning is this years outperformer . Goodyear tire, merck, or Newell Rubbermaid . Now the payoff. Newell rubbermaid, which has risen about 25 year to date. A flurry of activity right behind us here at the trading post where they trade shares of p pandora. Theyve halted it at the moment. We have seema mody here. Shares were halted twice in todays trading session. They have continued now. Apple may be launching an Internet Radio service. Back in early september, the wall street journal did a story on this. Folks at bloomberg are saying it may launch early next year. Back over to you. All right. So they have roesumed trading. A lot of activity going on. David steinberg from dls Capital Management says investors are making a mistake if theyre part of this recent selloff. He joins us along with dave mccuen. Good to see you guys. Thank you so much for joining us. David steinberg, youre still bullish on this market. Been bullish since last year. A couple years, actually. Ive been rewarded. Equities are selling at a mean evaluation over history. You have extraordinarily low yields. Relative to bonds which are a minimum rate of return, you have companies at s p that can adapt to changing Global Economics and so forth and theyre well priced. Earnings havent been that stellar for this quarter. Were starting to sense a slowdown. You get the worries about the fiscal cliff. Europe is still getting its act together. China is slowing. Im reading the wall of worry right now. That doesnt concern you . Well, listen, when markets climb, walls of worry. There are worries, no question about it. But you have an abundant amount of capital. Thats not going to stay that way with yields so low. People are looking beyond the shortterm earnings. I think youre going to be in a good spot if you hang on. We want to look at allocation equiti equities. Let me get to bob. Are you at the pandora post . Yes. The stock was halted once because the Circuit Breakers kicked in. They kick in if you drop more than 10 five minutes before. Now its trading still, down 18. 4 . I think the point here, maria, s is weve known for a while they were considering starting an Internet Radio service. So heres the crowd thats still out here. You can see these are players with very big orders. This is not something you see that much anymore. So theres obviously a lot of stock moving around. Pandora halted twice already, but trading once again. Its like deja vu when you see a big crowd around a post. Dave, lets talk about fixed income versus equities. What should a portfolio look like in terms of exposure to fixed income right now . Well t really depends on the individual investors risk tolerance. For retiring baby boomers, getting close to half their portfolio in a nice diversified core bond portfolio would make sense. That gives them the ability to ride out the volatility in the market, have a little ability to have some risk in their portfolio to have excess return. But high yield has definitely done well also. High yield is great. High yield is up almost 15 this year. It acts a lot like equities, particularly in times of crisis. Its nice to have. Its a good part of your portfolio. Just dont put too much there. The big debate down here is what happens if governor romney wins the election . A lot of traders feel the bond bubble might burst. Can you guys weigh in on that . That may affect the stock market as well. What do you think it, dave . That would mean that growth is strong. Strong growth, i think, is good for everybody. A stronger economy. If Interest Rates do move up, thats probably a very positive sign. But what about bonds if that happens . Bonds mature. Unless youre invested way out into longterm bonds, most of the money in this market is invested in intermediate and short term. We can ride out any kind of increase in Interest Rates. Actually, over at the time, higher Interest Rates might be better. What about that, David Steinberg . In terms of the election, romney win versus obama win, what happens to the stock market . Romney wins, mark goes higher because its going to be more favorable to regulation, possibly getting rid of obamacare. In terms of fixed income markets, right now theres almost price fixing beginning on. The largest buyer in the bond market is the United States government. Thats not an investor. They have a different agenda. If romney were to come in and ask the fed to pull back on those monetary policies, youre going to have the largest buyer in the market no longer there. The question would be, where would be the fair level for buys . I dont know. But i would suspect it would probably be a bit higher and certainly where its trading now. All right. Gentlemen, thank you all. Keeping an eye on this market and pandora behind us. Good to have you, thank you. We heard the bias at the close was to the upside. In fact, thats whats happening. The dow up nine points. Well take a short break. Then see this storm . It could be headed your way if you live on the east coast and even hit wall street. The latest on hurricane sandys potential path of destruction. Thats next. Oh, sandy. Welcome back. Are you ready for sandy . Millions of northeasterners who remember last years freak storm event in october that left so many without power are saying a collective not again. Weather channel meteorologist Reynolds Wolf in atlanta with the latest on the upcoming storm. Lets get you and the rest of america up to speed with what we can expect with sandy. To give you a full picture, lets look at what its doing right now. You see the winds at 105 Miles Per Hour sustained. The pressure at 963. Its moving to the north and doing so at a fairly decent rate. The center is about 130 miles south of the central ffecting p the u. S. In fact, south florida, heavy rainfall. Some very heavy cells bringing that intense rainfall along parts of south florida and into the keys. The problem is the storm it going to continue to move. This hurricane, at least according to the latest path we have, its going to do two things. Its going to continue its march to the north, northwest. By the time we get to this evening, winds of 105 Miles Per Hour. Then its expected to weaken. The hurricane continues its march, pulls out to sea a little bit. This is where it gets interesting. As we get into sunday morning, winds of 75, a minimal hurricane. Still, very dangerous. T al its also going to bring a line of heavy surf. As we jump ahead from sunday into monday into tuesday, there is the potential it could make landfall anywhere from the outer banks of North Carolina all the way up to cape cod, perhaps even farther north into maine. Thats how it looks. Now, what would this mean to parts of the northeast and the midatlantic . Well, to answer that question, weve got it laid out. Theres a chance we could be dealing with a couple items. Heavy rain and wind impacts, certainly. Thats going to happen. Youre going to have wind gusts. Possibly in excess of 70 to 80 Miles Per Hour pap lot of trees there are weak wnd stoened with in the past. Widespread wind damage, roof damage. Thats certainly in play. And coastal and inland flooding is also going to be a big issue. Any place you happen to know in parts of the northeast and mid tlantic where you have lowlying spots, places with poor drainage, you can expect to see the water pile up quite a bit. The time frame from sunday into tuesday p. M. Keep in mind, this is merely a snapshot of how it looks right now. We may get some forecasts in the coming days that may show fluctuations of the track, fluctuations in intensity. Certainly right now we have millions of americans that need to be vigilant, especially over the weekend and into early next week. Any snow in that forecast there, reynolds . Oh, god, snow. No, thats a great thing youre bringing up. Now were talking about something altogether different. We could have another storm system developing farther back out to the west that could come together with this. The top half of that dealing with heavy snowfall. So were looking at a lot of thing. Lets just focus first on this and the snow well deal with that too. Okay. Reynolds wolf. You bet. He must love his job. He gets to bring the good news all the time like that. What this does economically, what it typically does, is it means a rush of Economic Activity leading up to it. A lot of stores stocking up. Exactly. Then you wait to see what happens afterwards. Hibernate. But the impact it has on infrastructure, the transportation goes down. Then people are not out and about spending money. Exactly. They dont go to work. Its tough. Particularly something of this magnitude. Looks like we could be in for another round of harsh weather like this time last year. Those are the pictures from last year. So beautiful though. But it was heavy, wet snow that was still on trees that had leaves, and it was highly destructive. So what are you going to do as the number one sort of most important thing that youre going to do to prepare for sandy . Stock up. Stock up. Why . What are you going to do . The same thing. Im going to get ready to watch movies at home. There you are. Good. Well show you marias movie list coming up. You dont want to know my my movie list. My favorite of all time . Ill tell you later. Were minutes away from apple and amazons earnings. Plus, analysis from top investors. Youre watching closing bell on cnbc, first in business worldwide. [ male announcer ] this is joe woods first day of work. And his new boss told him two things cook what you love, and save your money. Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. Welcome back. Only 90 seconds before the close here. We have the dow up 21 points. We are seeing a little bias at close here. Ben willis, what does that mean right now . Lately we have seen kind of a late push on those up days. You start to see where the etfs need to square their positions. So youre seeing buying pressure late in the day. Nothing significant in my opinion. Pandora still trading lower. They halted it a couple times on word that apple is going to start its music business earlier than anticipated. Maybe as early as january of next year. So it would be its main competitor. Its suffering at this hour, down sharply. Dave mccuen of american century, why are Interest Rates going up right now if were talking about a slowing economy . The yield on that tenyear has gone up appreciably in the last month or so. It has gone up a little bit, but its still fairly low. A 1. 8 tenyear yield, thats low his korically. This is a risk on, risk off trade right now. Even though earnings are slow, you see the Housing Market pick up a little bit. You see the jobs market picking up. Some parts of the economy are doing better. Thank