We begin with breaking news. The first Public Comments from the newest member of the federal reserve. The dallas president Robert Kaplan revealing for the very first time some clues on where he stands on Interest Rates. Steve liesman following it all from d. C. Steve, what do you have . Scott, thanks very much. We are getting the first comments from the former harvard professor and Goldman Sachs banker turned dallas fed president , and the question we have going in is how much like the hawkish Richard Fisher is he who just left the dallas fetd presidency, and he is showing himself not to be too much like him. He says the fomc was prudent not to hike in the last two meetings. We went back and looked, and Richard Fisher several times last year had called for rate hikes, including when he had left office on the eve of the september meeting calling for rate hikes hen. Kaplan saying it was prudent for the fed not to hike. He goes on to say appropriate Monetary Policy will remain accommodative for some time, and the lower funds rate is needed to achieve any desired level of accommodation given the underlying economy. He does say that a return to normal Interest Rates will be gradual, but accommodation doesnt necessarily mean zero rates and does talk about the costs to maintaining zero rates, including distorting investments and business decision says. Let me give you his view on the economy. Spending more time with his first speech here. He says u. S. Consumer demand remains strong. He sees gdp growth between 2 and 2. 5 through the end of 2016. Growth, he says, will be sufficient to drive down the Unemployment Rate. Thats important. Unemployment is near the Unemployment Rate suggests the economy is near full employment. Just a couple more things. His inflation forecast sees the fed hitting that 2 target in 2017. Like other members of the fomc, including vice chair stan fisher, he sees the downward pressures on inflation running their course. In other words, running out and leveling off inflation in the next couple of months. The world will have to adjust, he says, to slower chinese growth over the longterm, and one curious thing that i dont quite understand. Well have to quiz him on this when we have a chance. He says the fed needs to consider labor slack in foreign economies as well as the u. S. Economy. That suggests a potentially dovish view on labor slack, but he doesnt really explain it, so certainly we have not a hawk in bob kaplan, but to the extent to which he is dovish, it doesnt seem all that dovish, but certainly not among the most dovish out there. Right. Prudent not to hike at the last two meetings. He says. The question is what does he think about the upcoming one in a few weeks . Whats your guess, steve . Do they go in december or not . What is the lease man indicator telling us today . I would have to check the liesman indicator. Okay. I just did. It suggests they will go in sdult wherebying thaudz my take right now, and i dont i have said this for a long time now, scott. I dont think the bar is very high. It has to deliver a 2 , 2. 5 growth rate. I think inflation has to be stable. We did see that in the last Consumer Price index report, and i think the Unemployment Rate has to be steady, and you dont have to have too many or too strong a jobs report in december for the fed to go. I think thats the default position, and my only astericks or cavat is some sort of widespread military action that would cause the fed to pause or a big disruption in the dollareuro exchange. Although you have lacquer saying we have overreacted to events. At the same time you have comments from deadly saying, look, if we hike, its not going to be a surprise. Were telegraph it pretty well. It is absolutely the case. Markets, business journalists, economists tend to overreact to these incidents. They have a pronounced affect on consumer confidence. They tend not to have a pronounced affect on macroeconomic growth indicators. We have relatively strong consumer demand. Weve been running at 3 the past couple of years. We have job growth and we have low oil prices. All of that should be favorable for consumer demand and favorable consumer demand should mean decent u. S. Growth. The question is how would the markets react to all of this . Nuri ranini yesterday telling us it doesnt matter. It doesnt matter that they go in december or march. Well talk about it on the other side. It looks more likely theyre going to move next month, but in some sense it doesnt matter whether they move in december or march. The fed funds rate is going to be reaching between one and 125 between the end of next year regardless of whether the fed moves in december or march. Thats not very important. So how is the market going to take it . Itsles difficult to consider how the market takes it immediately. You take a look at what happened with france, and i was with a bunch of guys on sunday. We all thought the market would be down about 1 globally. It wasnt. It was up, and it was up nicely. I have no idea. It doesnt matter, as he said, and rates around the world, theyre actually low. We have germany issuing their twoyear at the lowest theyve ever issued. Youve got low rates around the world. China will jump in eventually will real stimulus, so you can keep a lid on it, and i think the 25 bits is absolutely meaningless. What im looking for after is the rate of increases Going Forward. I still which even nuriel said its going to be gradual if not very gradual. It shouldnt be in your investment equation at all, period. Lets note a couple of things which we should highlight. First of all, the market is just off the highest levels of the day. The dow is up more than 120 points, and oil is worth noting as well. Its now dipped below 40 a barrel for the First Time Since august. Some are suggesting maybe you have an attempt to divorce itself the moves between the stock market and what crude are doing because lately knee been in tan dem. Crude goes lower. The market goes lower. Crude goes higher and the like. Were not seeing that at least at this moment. Pete. Well, you are getting a nice move out of techno today, and obviously that didnt hurt that Goldman Sachs put apple on its conviction buy list. Then you look across to the financials as well. The reaction today, look at Something Like bank of america. Weve been talking about this, and obviously if the fed is going to move, we know its going to affect the banks probably in a very positive way. At least we all think that they would. In terms of citi and bank of america and the jp morgan as of the world. You take a look at those sectors. Theyre performing very well. Even the oih, even with the dip down, you take a look at the services names. Theyre reacting very nicely today as well. When you see this type of a market and you see the strength and the broad swath in which its bringing Different Levels up, i think were looking at a strong market. You look at the volatility index. Its pulled back off the 20 level, pulling back underneath that 50 day as well. Dowlinged youlling autos use that as your thesis on how you are going to develop your thesis as to where the market goes. Do you agree . I broadly agree. The last five years have taught us anything, then its that making portfolio decisions based on Interest Rate forecasts has been a really bad policy. I think that people should ignore them in the shortterm. The one broad theme, i would mention, is that in historical periods of rising rates, value stocks have tended to do well relative to the overall market. Living through a five tenyear period where growth has been dominating value. Thats contrary to what has the moment wrum in the market recently. Value has done well in periods of rising rates. You think that this is going to be the case this time, and thats the conversation weve been having for the last couple of weeks at minimum tooz whether values back in favor and whether its lasting. Were not talking about a shortterm deal where value comes back in favor and growth comes back and says, oh, im still here. These things are completely impossible to time. Who knows when the value will return to form . All we know is that the periods of growth outperforming value historically have typically been pretty shortlived. The last one we saw that was as extreme as the one were living through now was in the late 1990s, and we know that value did extremely well during the first part of the 2000s. I dont know when it will start, but it will probably be a secular change, not a wick trade. What i can tell you, what patrick is saying here, is if you look at a chart and the fed funds target rate over the longterm, and you look at relative performance of Large Cap Value stocks they map each other pretty well. This is a long game. Thats a good thing. Im still in that camp that says these guys are market dependent. Theyre afraid that theyre going to upset the apple cart. I know ranini said 1. 25. The end of 1026. That means five jumps up. I dont he thinks they go through times next year sfwloosh i this that i i dont think they go next year from where im sitting right now. I think everyone is still getting the lay of the land. You are telling me you dont think they go at all in 2016 . No. I think inflation is worse you are way out like on gilligans island. Okay, well, a year ago i was saying everyone was saying theyre going to raise in march, and i was saying theyre not going to raise this year, so im in that camp now, and im happy to stay in that camp. Call it gilligans island. Ill hang out with ginger and mary ann. Thats fine. Ill take my wife. Analogies aside. In the longterm value will do well. Give me sectors you would buy today. I think people will ibm is the quintessential value stock, and all is a nice way of saying crappy recent results and a pessimistic outlook from the overall market. The key with values is that markets tend to overreact at extremes. For a stock like ibm, its had how many ever in declining revenue growth. Had he tend to leave it overly cheap. Should it be cheaper than amazon in the markets tend to overdo it at extremes. I dont know why you would think the market is overdoing it . Every business is under massive seeming. I think its actually been inefficient in not reacting to it sooner. Yeah. What should a commodity so i use ibm as a representative example of the type of attitude investors have towards value stocks. Will ibm do well . Who knows if that individual one would will do well. Im recommending a basket of value stocks. The point is its extremely ease where i to build a narrative against ibm. Right . Just as you build the positive. Buffett owns it. It has a yield. Its ten times earnings. Its easier to built a positive narrative over a stock thats come down 50 . Than a negative. Really . I think so. I think you could say this is the ultimate falling knife. We could have heard that three months ago, six months ago, nine months ago, two years ago. Patrick, its good to see you. Doc, well get to you in a moment. No problem. To the latest in paris where police were involved in a raid and shootout early this morning. That left two dead and seven under arrest. Michelle car Russo Cabrera live as well from there. Michelle. Scott, that raid happened on this street overnight right behind me about a block and a half away. This location is 1. 2 kilometers away from the stadium of france where three suicide bombers detonated vests on friday night in the wave of attacks that killed 129 people here in paris. The raid began 4 20, 4 30 in the morning with volley of gunfire that local residents said went on for at least 15 or 20 minutes. They heard explosions. When alwas said ask done, as you said, seven people arrested. At least two dead. The video from overnight was dramatic. We can see people in the street with guns. Many members of the police through the streets as they raided the apartment. We are waiting to find out whether abdel hamid was in that apartment. He was in the alleged target of fridays attacks here in pair sxishgs were also waiting to find out about anything we know about salah al islam. We think we may hear something at 1 00 p. M. Eastern time. Thats when the prosecutor will hold a News Conference where perhaps well get more details on who was in the apartment, who is dead, who is alive, who is under arrest . One of the key events of the raid, a woman wearing a suicide vest detonated the bomb on her and killed both herself and the man who was in there. In the meantime, theres a new statement from isis in their magazine they put out, and listen to what they have said. The Islamic State dispatched its brave knights to wage war in the homelands of the wicked crusaders, leaving pafr is and its residents shocked and awed. The eight knights brought paris down on its knees after years of french conceit in the face of islam. A nationwide state of emergency was declared as a result of the actions of eight men armed only with assault rifles and explosive belts. They are declare heing victory of what we have seen in paris over the last several days. Scott, back to you. All right. Thank you so much. Michelle Caruso Cabrera from france. Ahead on the half the pulse of retail. Target Ceo Brian Cornell joining us in an exclusive interview to make sense of the consumer and what to expect for the holiday season. Plus, our calls of the day affect nearly 1 trillion worth of stock. Is it time to buy apple and sell exxon . We have a mega cap debate brewing on this desk. Youre watching cnbc first in business worldwide. When you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. At t has the tools and the network you need, to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. Some neighbors are Energy Saving superstars. How do you become a superstar . With pg es free Online Home Energy checkup. In just under 5 minutes you can see how you use energy and get quick and easy tips on how to keep your monthly bill down and your Energy Savings up. Dont let your neighbor enjoy all the savings. Take the Free Home Energy checkup. Honey, we need a new refrigerator. Visit pge. Com checkup and get started today. Announcer if youd give thanks for a bette[barks]s sleep. Sleep train has just the ticket. [train horn blares] during sleep trains thanksgifting sale save up to 300 on beautyrest, posturepedic, serta, even tempurpedic get up to three years interestfree financing plus, choose a free gift with selected mattress sets but hurry, sleep trains thanksgifting sale wont last sleep train [train horn] your ticket to a better nights sleep we are back. Shares of target are slumping today after Quarterly Results came out earlier. The retailer just the latest in a string of disappointing earnings that hit the sector pretty hard. Cnbcs Courtney Reagan live in minneapolis with targets Ceo Brian Cornell as a cnbc exclusive interview. Courtney, take it away. Thank you very much, scott. I am joined by Brian Cornell here in a target store not far from your headquarters in minneapolis. You reported earnings this morning. Not goof numbers. Now we want to look ahead to the holiday season. You know, very strong Fourth Quarter last year. Can you top it this year . We feel really good about our plans for the holidays. Now, i think it builds off the momentum weve seen throughout the year. We had great traffic growth again in the Third Quarter. We expect that to continue in the Fourth Quarter. Weve spent a lot of time making sure weve had great plans in place where are i think we have a sensational marketing program. Were scleerl elevating the in store experience. You walk aron the store here today and you notice that, and we feel very good about our black friday deals, our ten days of deals, and the combination of what were going to offer in store and online. We feel really good about our plans for the holidays. And youre starting some of these deals before black friday, your ten days of deals. Is there any early traction a couple of things im really excited about. If you walk to the front of our store, we made a significant change from last year. Weve created something that we call bullseyes playground, and the reaction from the guests have been sensational. High double digit growth rates in that section. It really tells us the guest is interested in what we offer. Theyre attracted our experience, and weve got a couple of other unique offers. We partnered with adel. Were featuring three exclusive tracks that well offer later this week, and we think thats going to drive enormous traffic into our stores before the holidays. Weve got our game in place, and i also think the big difference this year versus last year were in a much better position with thanksgiving. As we continue it to think about reinventing food, i think were going to see a much stronger turnout in our target stores as our guests get ready for the holiday. Another strategy has been online. Your Digital Sales were up 20 . Last quarter, though, they were up 30 , and your growth target is 40 for the year. Is that growth target off the table now . Well, our focus is on really making sure were delivering a great experience. Any time any way the guest wants to shop, and i know that most of our guests start with a digital device in their hand. Making sure weve got the right Digital Offering and whether that brings them to the site or encourages them to come to the store. Either way we win. We saw traffic growth in store and online last water. I feel good about our overall strategy with digital. I dont feel we significantly wrout perform the industry. I just saw the october ecommerce numbers for the u. S. Last night up 8. 6 . With that as a back drop, our 20 looks really strong. Weve got to make sure were growing share in that space. Were continuing to outpace the industry, which we are. We expect that to continue in the Fourth Quarter. Speaking of growing in that space, you committed a billion dollars to your Digital Strategy this year. Amazon is just a bohemath, and its kind of a bad word in retail because everyone is trying to win that share that theyve really been able to capture. Is 1 billion enough for you to do it . Well, were putting 1 billion behind both technology and supply chain. Its to hashgs that, again, no matter how the guest wants to shop, we deliver a great experience. One of our big advantages versus amazon is we run 1,800 fantastic stores. With team members that take care of the guests. We recognize that as we think about the holiday season, while digital is really important, it looks like 90 or more of Retail Shopping will still take place in a physical store. We cant lose sight of that. Weve got to make sure we play our game, and our strategy is about offering this on demand choice. Anywhere you want to shop, if its in store, we want to make sure its a great experience. If its online, we want to make it really easy. The combination is what really allows us to succeed Going Forward. And a big part of your strategy is your signature categories in which style is one of those, and apparel has been a big talker in the industry. Both data is showing weak innocence apparel. What does that mean Going Forward . Do you have to figure out a new strategy . I dont think we do. As i look at our competitors, and the apparel reports, i felt better and better about our Third Quarter apparel numbers. We grew almost 3 . It wasnt the 5 growth we had in the second quarter, but versus the industry, its fair to say it was industry leading in many cases. When the guest was shopping for apparel, they were coming to target. It has been a unique weather pattern, and were sitting here today in minneapolis. Its 60 degrees outside. When things cool down, we expect the guest is going to come and come to target for apparel this year, and weve continued to enhance that offering. Weve had 1,400 stores with mannequins. We know our guests really like what weve done. Weve invested to make sure were improving the quality of our apparel offering, making sure were on trend with great new items, and while 3 wasnt the number we were expecting, it was one of the best numbers in the industry. When they shop for apparel, theyre clearly coming to us, and were in a great position for the Fourth Quarter. Scott has a question. Scott, go ahead. Im going to make sure mr. Cornell hears what you have to ask. This is the First Quarter since mr. Cornell took over that target has not beaten on eps. Not beaten on earnings. Some are suggesting today that the honeymoon is over, and thats why the stock may be reacting as negatively as it is and im wonder if anything he thinks that investors are now going to be skrit nizing him and the company closer than they have in the past. So scotts question actually has to do with the eps and how this is the First Quarter we believe since you have taken over that you havent beaten on eps. Some are wonder if anything the honeymoon is over and if investors are going to be very critical of that eps number Going Forward as it pertains to growth in the stock price. We laid out very clear plans, and were delivering against those. Weve hit our sales numbers, our profit numbers. Were growing traffic. In our eps, it was at the high end of our range for the quarter. We feel really good about it, and it was up 8. 6 versus last year. We gave very clear guidance. Were delivering against that outlook. Were right on plan with the goals that weve set earlier this year that we talk about our financial conference in har. Were a slight bit ahead on a sales standpoint on a profit standpoint and on a traffic standpoint. We feel like were delivering a story thats very consistent and our goal is to make sure were very consistent, steady growth. Were still in the early stages of modernizing, transforming the company. I talked about this a lot. If its a baseball game, you know, were in the second inning. If its a Football Game right now, were in the First Quarter. Weve got a lot more work in front of us, but were delivering very consistent steady performance. Both from the sales standpoint, a profit standpoint, and a traffic standpoint, and we feel very good about where we sit today as we enter the Fourth Quarter. We wish you luck on that. Thank you so much for doing this with us today. Thanks for joining us. Im going to toss it back to you. Scott at headquarters. Thank you so much, mr. Cornell. Thank you to you as well. Lets kick this around. The street is largely coming out in defense of the stock today. Beating rays, momentum builds as the top broad lines pick. Thats cowan and oliver chen, frequent guests. The notes are fairly reflective of that kind of sentiment. Is that the same sentiment you have, pete. I tell you what, i look at target now, and i think its an oversold situation now today. Will i buy it today . No. I like where the stock is trading right now. Mr. Cornell is he has laid out his plan, and you look at what their plan is. Theyre moving towards the digital, and thats what everybody is all talking about throughout the retail earnings season is digital doing well . We know theyve got about 20 exposure to the apparel world. Thats a bit of a headache because that is one of the slower areas. Their slowdown in their online sales to 20 from 30. Another reflek flexion of the amazon impact that Companies Like this cannot overcome. It probably has something to do with that and just the general competition i think throughout, scott, as everybody else all of a sudden tries to get into this online world as well. They initially had a 40 target. Thats not going to get reached, and the cfo talked abouting that on the call today. There are a number of new ones that have sprung up jet, for instance. There are so many new online retailers in addition to the am sdmrons and other ones that have been taking volume from these guys. Lets not dismiss what walmart just reported despite the fact that they warned us just over two weeks ago. They came out with a pretty robust report just a day ago. All right. Coming up, a buy for apple. A sell for exxon. They are our calls of the day. They are next. vo what does the world run on . It runs on optimism. Its what sparks ideas. Moves the world forward. Invest with those who see the world as unstoppable. Who have the curiosity to look beyond the expected and the conviction to be in it for the long term. Oppenheimerfunds believes thats the right way to invest. In this big, bold, beautiful world. Another Big Corporation hack. Cyber attack a message Security Breach reported. 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. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. 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They raided a building thought to include master minds of the attack. No word on his fate, but two people were killed and seven were arrested in that raid. The u. N. Nuclear agency says iran has started cutting back on nuclear programs, which could have been engineered into making weapons. Its report shows that iran has reduced the number of centrifuges it uses to enrich uranium. And the fbi says there is no evidence that threats made against a pair of air france flights late last night are credible. An air france plane en route had to make an Emergency Landing in las vegas while another en route from washington had to make an Emergency Landing in halifax, nova scotia. You are uptodate. Thats the news update this hour. Scott, back to you. Sue, thanks. Two calls on two of the worlds biggest market Cap Companies today. First up Goldman Sachs adding apple to its conviction buy list. Lets kick this one around. They say the market used apple as a hardware stock. Transactional model with limited recurring revenues. They say that its going to switch. That you are going to get an installed base monotization, that have you to view apple as a service. I agree with them. I dont know who didnt feel that way. Some people that come on want to focus on the hardware that they do sell, which is the stock performing i think theyre not being properly priced, and carl comes on and says its a no brainer. The no brainer part of this is the recurring revenue. Its going to be apple pay as that grows, but its right now its itunes, its going to be movies and Television Shows delivered all the rest of that that is the recurring revenue side of this. They had a buy rating on the stock. Everyone loves the stock. Are they about to do a bond deal . You know, someone wants to be in the good favors. Did i say it out loud . Sorry. Of course theyre selling services here. The interesting thing is the stock has bought up crazy on a call like this, but if you read the note carefully, which apparently no one did, you look at it, and the analyst to his credit actually says, hey, look, you know, if you what you should do is theres going to be choppiness in the data because not everyone is going to listen to me, and you will have better opportunities to buy the stock. Theres a bunch of seals using tir nose to buy the buy button because they cant read. Thats the only explanation i cant think of. How do you follow that . First of all, recurring revenue stream has been part of apple. Maybe not in terms of the soft sales like apple tv, but definitely in terms of the Apple Ecosystem having to have all the devices connected. Secondly, im not willing to pay in advance for the recurring revenue for apple tv. Apple radio hasnt worked that great. Itunes was the first time they did that. I think the stock is inexpensive here. I still think believe it needs catalyst. Im ready. It call is interesting. Now, remember, a very esteemed powerhouse upgraded this stock several dollars higher. Like a week and a half, two weeks ago. That was an interesting call after the stock had run. I wonder what the communications were like on that. Anyway this is a downgrade to the format Raymond James. Yes. What were looking at here is Raymond James downgraded the stock. Theyve been neutral on the stock. Heres the way i look. Oil is up 40. If you look to take a shot at oil here, are you going to buy exxon . Are you probably going to buy something thats higher beta, the kind of stocks that joe has loved historically. Joe is not here, obviously, right now. You are going to buy the higher beta names. Meanwhile, while stocks are in turmoil, this is an atm machine. Everyone owns this. When i talk to buy side traders that trade this sector, they say this is like eating cardboard. Talking about the stock. Its not interesting. Not enough beta. They make the point that they have limited leverage. Limited leverage to oil prices, acts as a hinderance during recoveries. Even if oil recovers we said its below 40 for the tifrt since august. Even if it recovers and goes higher, they get less leverage out of that. You buy the stock today or no . No. I dont. In our portfolios for clients, we still hold the stock, but we have calls written from here until three months from now against this one. We were buying it, judge, at the end of august, and we said so, pounded the table here on the air that if are you getting in where Rex Tillerson got in, down at 6 a share, makes a heck of a lot of sense. Up at 80, we said no, it doesnt. This is where you are overwriting. Thats what you did and continue to do until it pulls back from here. Great Balance Sheet. Incredible liquidity. If are you playing beta, part of the note that really stood out to me, scott, was oil recovery. I think there are other names that would perform better than exxon. You are not argue with your brother, or are you . My argument, i like it here. I do like it here. I like it here, but we liked it obviously at 68 as well. We like it here i like it here at 80 as well because of the fortress Balance Sheet and the potential of what they could do with that money thats sitting on the sheets right now. Gold just cant get a bid here. Down nearly 10 in the last month, and also in the last 15 sessions. Its been negative for 12 of them. If goitd cant get a bid on everything that happened after paris and the ongoing situation that were monitoring, when will it . The only thing that matters is the impending fed rate hike, and gold is going to see pressure until that occurs. However, once the fed rate hike does occur, i do see that a commodity Dollar Strength against commodity begins to ease. It can go higher from there. 10 35, 10 45 in gold its aa longterm down side target ive been looking at, and i think that has to get achieved first. Jim, how low can it go . I think the chart looks like that, and my lows are lower than bills. I say 10. 15 to 10 even. As we said last week, and i agree with bill, its mostly a dollar story. When the euro we want below 107, thats another heap of pressure on the entire commodity complex and gold is feeling the brunt of it. I dont like it here at all. Do we eliminate stop orders . Plus, making money on how people spend money . The best ways to play the move to digital dollars. Its our motif of the month. Youre watching cnbc first in business worldwide. 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. Prge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. 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If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. And this year, look at whate he put in our driveway. The lexus december to remember sales event is here. Lease the 2016 es350 for 349 a month for 36 months and well make your first months payment. See your lexus dealer. Coming up at the top of the hour, stocks rallying for Third Straight sessions. The one etf to be long on right now. The one atf to be short on. Home construction plunging to sevenmonth lows. A blip or a red flag . The real read on the American Housing market and inside the feds head. Minutes of the last fed meeting sent across on power. It could be a real market mover. Were all over it with instant reaction and expert analysis. Those things and more coming up at the top of the hour. Scottie, back to you. All right, mandy, thanks. See you in just a bit. Well, changes are happening at the new york stock exchange. Trying to reduce volatility. Bob pasani has more from the floor. What are we learning here . Last night, scott, the nyse became the latest exchange to announce that they would no longer accepting stop orders beginning february 26, 2016. The nyse joins nasdaq and bats which also no longer accepts stop orders. Its an order to buy or sell a stock when it pass az certain point. Say a stock is trading at 60, put in a stock order at 55. If the stock hits 55, that will become a market order and will sell at the market price hopefully close to 55. Now, why is the nyse doing this had . This is the statement they issue. We expect our elimination to stop orders help raise awareness during volatile trading. Heres the problem. When you get very rare events like wlapd on august 24th, thats the day the dow dropped 1,000 points in a few minutes and then it bounced back a few minutes later. It creates all sorts of stresses on the market system. Stocks trade down big, and then they recover, and people arent happy. Lets take a look at an investor who had a stop order on that day. This is an example. Take a stock that closed the day before at 60. Our investor has a stop order at 55. If it hits 55, you sell. It opens at 54, so the stop order gets executed at 54. It works. Nooif minutes later, though, the stock is trading at 58. This investor is not very happy. They had a stop order in to protect against the stock dropping, but they didnt expect it to bounce back a couple of minutes later. The problem is theres no orders that you could put in to protect against this type of very sudden market volatility. The only solution is foe trial investors to not put in stop orders and to pay more attention to what they have and when they might want to sell what they have or buy more if thats what they want. Thats what the nyse is essentially trying to say here, scott. By the way, you can still put in stop orders with brokers. Theyll still take them. They just wont execute on the exchanges. They might execute internally with that particular broker. I thinkest not surprising theyre doing this, and treer toying to just address those days when the markets are really volatile, and you get people who are unhappy with orders that executed where they didnt really want them to execute. Bob, thank you so much. Bob pasani on the floor of the new york stock exchange. You say this thing all the time. I got stopped out. Whats your reaction . Ultimately the people that are stopping this stop Order Execution on the exchanges are saving the companys money. When you give a stop order out there, folks, you are wafkly opening up your wallet and encouraging someone to lift all the money thats left in that wallet out of it. I think its a positive to address that this increases volatility and risk for the investor. You wont see any pros using a stop order of the sort that bob pasani just described. Isnt that different than limited orders . Yes. The difference is stop loss order turns to a market order, and they can execute anywhere. If you put in a stop limit order, it only ebbing cutes at that price. Of course is that what you do . You just use your limit order now . Never use stop loss because particularly in this environment where liquidity is at such a premium, and black box traders, theyll just come in and take it down and buy a lot of it from you and then sell it right back to you. That is the biggest issue. You just described it. The one thing we talk about on the show all the time and its why i think its so important to have knowledge of the opings woshld, quite frankly, is if you had a put order in place or a put in place, not an order, we talk about protection all the time, we talk about volatility and these swings in the volatility index. Up to 20. Back down to 14. Those kind of moves that were seeing. When are you in the 14s and you are low, go out and buy puts against your positions. You know where you are covered, and you have then have a comfort level. The latest motif of the month. The digital dollars trade and why you might want to ditch that paper money. As we head to break, take a look at the s p sectors right now. Decent day on the street. S p up 14 points. Twothirds of a percent. Led by health care and the financials. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Its gotten squarer. Over the years. Brighter. Bigger. Thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Were back with a guest who has a strategy to take your money global. What motif are we looking at today. The digital dollars motif. Thats are companies that provide technology and services to the electronic payment industry. So think of the car networks. These are mastercard, am ex, the processors, total System Services are in there. The Payment Solutions companies, Companies Like pay pal, wex, and even infrastructure Companies Like ncrn and verifone. Theyve done really well. The basket has turned 17 over a year compared to 2. 5 . I feel like youre missing a name in here though. You know which one im going to say. What name am i talking about . Im guessing square. No, apple. Okay. When we weight our motifs, we thematically weight them. We look at their exposure to Digital Payments so apple is relatively small. It didnt make the cull rigt ri now. Its funny, we were talking about an upgrade to conviction buy at goldman saks and apple pay factors into everything apple will do in the future. Theres some interesting points. The tailwinds behind this motif are a couple things, one is the Technology Disruption hasnt happened. What they have done is reinforced the incumbents. Everyone expected there to be a disruption in this market. Secondly whats happening, were seeing a lot of people rotate out of cyclicals into more of a defensive play and the third big thing thats driving this motif is china. Theyre opening up their markets in 2016 and thats what weve seen as driving. This is a 1. 1 trillion business where the relative penetration rates are small. B to b is only 50 penetration. B to c is 70 . And peer to peer is only 30 penetration. Big market, lots of room to grow. You said square. Obviously thats a great one. I wasnt thinking of that because its private. But when it goes public, do you add it in . We do. Right away, the next rebalance and typically we wait six weeks before we bring it in. Right, right. Another recent ipo. Go ahead, steven. Youre talking about penetration, but thats really different than acceptance and usage, right . So those are in the vendors, et cetera. Has as that adoption picks up thats going to ex plo he had this particular motif, right . We see a lot of motif driven by the underlying structural shifts as people move more and more to Digital Payments. Its remarkable the b to b space is 50 checks. Apple pay, one of the things its doing is making it more convenient, more accessible, these are the trends that will help but were not seeing the disruption Silicon Valley likes to see in the underlying economics in the companies. Interesting stuff. Thanks. Well tell you why go pro shares are falling today. Set you up for the second half as well when we come back. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. So go pro shares, i want to show them to you right now. Piper jaffray takes the price target down to 15 bucks. They say theyve seen further price pressure on amazon, products popping up, zulily, groupon, rue la la, discounts where you otherwise wouldnt see them in the past. Well, what were see something a commodity product, were seeing just Consumer Product that is ubiquitous. Im not so sure anybody really needs it thats not very, very active because youve got your iphone so why carry another piece of equipment . Thats the issue. Plus the competition which we havent seen come in yet will be coming in, and they havent hit their targets and thats the most important thing. Doc, you told it out of your halftime portfolio yesterday. Yeah. I sold that. I sold best buy also yesterday out of the porltfolio. Today i went in with jarden. Luckily, looking at the disaster that is go pro today, im not going to be sending anything but coal to mr. Woodman. How about lowes . We shouldnt be surprised after what home depot did, right . No. If you look at the growth they put up, thats impressive. They beat on the earnings and the revenue. The interesting part is the fact that the way the stock popped initially, i thought wed hold onto some of the gains. Then it started to ease back. I thought that was a little surprising but what we heard from tjx, what really drove that, home goods, then home dep depot. Not surprised to see the lowes number as low as they were today. Housing stayed strong. I keep looking for a hiccup in housing. You dont really get it. The trend is strong. The problem is everyone knows that already so you see the stocks like lowes and depot, where to from here. Thats why you get some of the performance like today. Im certainly not looking to buy the sector here. The rails are interesting, too. You get more details on cps offer for norfolk southern. Pete, i know you have owned some of the rails in the past. Only one im in right now is csx and that name was even thrown around for a little while. What you really wonder about is two things. One, how long would this process take . I heard on cnbc earlier today they talked about one to two years for this process, and the regulators. Are the regulators actually going to let this go through, especially from what we heard earlier in the year about the airlines. Is this something where they want to see consolidation . My guess would be no. Weiss . Id agree with that. I would think consolidation would be very, very tricky. Wed have to see what the breakup fees are in kcase they dont get antitrust profapprova. 30 seconds left. In one hour fed minutes. Thats the most Important News item today. What are you looking for . Im looking for more i wouldnt say very hawkish but more language that will lead us to believe theyre going to tighten when they meet on the 16th. I want to see if they telegraph anything specifically about december in these minutes. I think its going to be one of those things that causes the markets to gyrate massively if its against what we think right now were thinking consensus is moving in december. Good stuff. See you tomorrow. All of you as well. Power begins right now. Gentlemen, thank you very much. Welcome to power lunch. Along with mandy drury, im tyler mathisen. Stocks rallying yet again, the dow and nas tadaq up for a thir session. The dowmanaged a threeday win streak in a month. Will that change . A terror raid rocking paris. Two dead, several arrests. So how do you stop young people turning to terrorism . We speak with one serial entrepreneur who is using the power of the private sector to address the root economic causes