Good day, everybody. Welcome to power lunch. Im tyler mathisen. Glad you could join us another daily and more records for the equity markets. The dow, s p, russell, nasdaq, you name it theyre reaching historic highs. The emerging markets rallying two, the etf that tracks them, on pace for its best day since september 11th. The airline pushing the dow transports to new highs as well jet blew, delta, united leading the way there. Lennar up about 3 . The home builder beating earn ares estimates. Now making a bit of a come back as you see theyre up 1. 2 . The electric car maker missing those model three goals more on this ahead. Im melissa lee. The National Retail federation expecting holiday sales to increase between 3. 5 and 4 this year. The u. S. Ordering 15 Cuban Embassy officials to leave. This comes after sonic attacks against american diplomats in cuba. Three nobel prices for scientists after breaking gravitational waves. We begin this hour in puerto rico. The president touching down in the u. S. Territory a short while ago. We expect to see him touring some of the devastation left by Hurricane Maria. Hes already had meetings on the ground there. We will bring that to you live to the extent we get footage out when it happens. Our Contessa Brewer is live in san juan with the very latest. Contessa. Reporter so, tyler, hes in these neighborhoods now where there are low semidetached houses, hes meeting with some of the people who survived Hurricane Maria and now many of them are surviving without running water. Less than half of the island now has running water. Much less electricity. Were still only looking at the most crucial areas on this island connected to the power grid even as utility crews are out and about and now the president getting a chance to hear from some of those people about how dire the circumstances are. Before he got into marine one this morning to leave to come to puerto rico, he said, oh, it was a good thing that Puerto Ricans didnt have more people die, quote like in a real catastrophe like katrina. General henry who was in charge of the military response to katrina is on the ground and has been here on puerto rico and said that what he was seeing was far worse than katrina, 3. 5 Million People on this island and nearly every single one of them feeling the effects of Hurricane Maria. The other thing that is likely to be talked about as the president is visiting the island was this back and forth with the mayor of san juan, the president criticizing her effective leadership in response to the disaster. She met with him today. Got a chance to shake his hand. She said she thought keeping the lines of communication were more important than politics but heres how the president responded in front of the mayor when he was talking about the governor of puerto rico. Right from the beginning this governor did not play politics. He didnt play it at all. He was saying it like it was and he was giving this the highest grades and on behalf of our country, i want to thank you. Reporter the president is also meeting with the governor of puerto rico while hes here, the governor of the Virgin Islands which is struggling to recover power there following irma as well. Hell be talking with some of the armed forces with the marines doing that on a navy ship that has responded to the disaster here. Fema says its already handed out 35 million, 7 million of it to individuals and the other part for the Disaster Relief efforts here and more to come as well. Guys. So is he planning still to go to the Virgin Islands or is just meeting with the governor of the Virgin Islands in puerto rico or is he going to tour the area by air or what or do you know reporter there is nothing on his schedule to indicates a trip to the Virgin Islands. When they released his schedule, they specifically said the reason why the governor of the Virgin Islands was coming here was because logistically it was too difficult to get the president to st. Thomas and especially st. John or st. Croix. Thank you very much. Well be following what is going on there, brian. Tyler, thank you. Now to las vegas. A city still in shock and mourning and still searching for answers and a motive. Jane wells is there and she joins us now with the latest on the ground in vegas . Reporter hi, brian. Its 36 hours since the shooting. This is the venue behind me where it happened. People still havent been able to get in there and collect their belongings. You can see mandalay bay, that is where steven padlock dock paddock, had the perfect view. Nbc news reports Law Enforcement sources say that paddock checked into two rooms on september 28th, thats last thursday, days earlier, he had transferred 100,000 to an account in the philippines where its believed his girlfriend might have family. She had left the country. Supposed to be coming back and he liked to gamble large sums. Paddock reportedly had the highest status as a patron at caesars. Now we checked into mandalay bay yesterday. Heres the photo i snapped but the mood was subdued. Security was increasingly tighter. When my reservation didnt quite match my name i had to produce four pieces of i. D. , get a managers okay. Thats never happened before. And up the street at the wynn a short time ago, our producer went in, they were wanding people with metal detectors and checking bag. Everybody understandably is a little on edge. This was an attack on united states, on las vegas by a seemingly lone deranged individual. Im proud of the people that work for my company and metro. As you might have heard earlier and from others that we are absolutely confident that we saved lives by bringing this to a more swift conclusion than would likely have been the case other places. So i love my town. I know my town. I feel responsible for everything that happens in this town and but i do know that we did everything that we could and we will continue to do everything we can. Reporter every digital sign in the city is expressing condolences. Many are offering free rooms to families and victims. Ufc donating 1 million toward helping victims and families. Same with station casino. Zap poe will match donations. Its now topped 3 million. Its not quite clear who or how that fund is going to be administered. Its just a showing guys of the incredible outpouring here whether its money, food and water to First Responders, theyre lining up again to doe naft blood. It is just amazing. I know you spoke with people there on vacation. Have you spoken with anybody who is leaving early or otherwise changing their plans reporter i have not found people yet but mccarren airport is saying because too many people theyre trying to get their stuff, they just want to get their stuff but the airport is saying if you dont have your i. D. And you want to get out of town because your i. D. Is some where back there, you dont have to have an i. D. To get a boarding pass. Youll have to fill out more paper work or go through a secondary screening but if you want to get out of here and you cant find your drivers license or passport they will help you get out of here. Jane, thank you very much. Very interesting wrinkle little detail. The former equifax ceo in the hot seated to facing angry questions from lawmakers on the hill. The hearing has just wrapped up down in washington and the aditi roy is live on capitol hill. Reporter just moments ago that hearing just wrapped up and former equifax ceo Richard Smith walked out of here. We triefd asking him questions several times but he just remained tight lipped as he walked through this corridor outside. Would not answer any of my questions, a Company Spokesperson told us to refer those questions to the company. He faced a tough grilling this morning from up to two dozen lawmakers on this house subcommittee. He began his remarks with an apology. The ceo, im ultimately responsible and i take full responsibility. Im here today to say to each and every person effected by this breach, im truly and deeply sorry for what happened. Ive talked to many consumers, ive read your letters. And equifax is committed to make it whole for you. Reporter smith also told the subcommittee that the reason it took them 40 days to notify the public about the breach is that at first they didnt understand the scope of what had happened, that it took weeks for them to investigate and understand the true depth and breadth of the breach. The company just announcing yesterday, now a total of 145 million americans were affected, 2 1 2 million more than originally reported. Smith also talked a little bit about why it happened in the first place, he said it was a combination of human error that a person did not rollout that a patch for the Software Vulnerability that ultimately led to this breach and it was a problem with machines and technology that a scan of the companys system did not identify that vulnerability and final little he will also addressed the stock selling of three Company Executives including the company cfo and he maintains that they did not know about the breach when they sold those shares so he did add that the companys general counsel signed off on those stock sales and tomorrow he faces two panels on the senate side. Back to you guys. Another long day for him. Thank you very much. Now to a sector thats been impacted by the hurricanes, autos and their sales in september. Phil lebeau has got the latest live from chicago. Much stronger than expected sales in september. We knew there would be a bounce following the hurricanes in texas and florida but boy did we really see it especially with some of the larger automakers, toyota, gm, ford all reporting substantial increases in sales last month, much berlg than what was expected. Usually you see an increase of 2 or 3 . These guys were up 3, 4, 5 skpard to expectation. Some of this is due to auto sales rebounding in texas and florida following the hurricanes. I have to tell you, that even the analysts were not expecting numbers this strong and thats why when you look at the annual sales rate for the month of september we are looking at the strongest month likely when the numbers come out in the next hour or so, strongest month of the year, could even be 18 million as a sales rate for the month. Theres the annual rate. You see 17. 6 last year. Were not going to hit 17. 6 for this year but we could see a pop in the overall sales rate when those numbers come out in the next couple of hours. And we also got news from tesla. Some people were focused on the model 3 short falls because the production set backs because investors are largely looking through that. Right. You have to figure that most people were going to look through this if you were a tesla investor, youre buying into the longterm vision when it comes to the model three. The Third Quarter number no doubt disappointing if youre looking specifically at the Third Quarter. They said they would build about 1,500 they delivered 220. They didnt even come close to building 1,500. They built 260. They blamed in on production bottle necks. They believed they have solved those issues. As you take a look at shares of tesla, remember, this company has not changed its target in terms of model 3 production for this year or for next year and again, most investors who had bull ir on tesla, those who were long, theyre looking way out into the future in terms of the success that they believe the model 3 will have. Not too many initial targets that tesla has actually met. Phil, thank you. You bet. On deck, the other hearing on capitol hill today, wells fargo ceo getting an earful from senator elizabeth warren. Well talk more about that. Plus the battle over valuation. Warren buffet says the market is barely valued with a caveat but a new study out from bank of america says stocks may be flashing a sale signal. Who is right coming up well debate. Announcer youre watching power lunch. Evaluations make sense with Interest Rates where they are. In the end you measure laying out money for an asset in relation to what youre going to get back and the number one yardstick is bus governments and when you get 230 on the ten year, i think stocks will do considerably better than that. And of course warren buffet earlier today on squawk box with becky quick noting that market valuations to him still seem reasonable. On the flip side bank of america, merrill link saying the market is flashing a major sell signal and could be on the verge of overheating. So whos right lets bring in shannon shakocia thats a lot of vowels, shannon. I know. And steve masokia. Lot of vowels there too. Im going to call you by your first names shannon and steve. Shannon, you get to go first. Where do you come down on this what is your market view why and what would you do about it i think that were concerned about valuations. They do seem a little topee here and i would be i have to acknowledge that. I think on the other hand we look at this from an Economic Perspective and were investing based on the fact that rates are rising were in an reflationry environment and we think theres still room to run in the sectors we like right now. How about you steve i think as long as this worldwide Monetary Policy continues, not only stoksz but assets of all kinds of natures are going to continue to move higher. We recently heard that the fed is going to be reducing their Balance Sheet. By the way, they have the fourth largest Balance Sheet, not the largest but the fourth largest in the world. If you look at what the ec b b oj is doing it far outweighs what the fed is doing. Studies show that the fed will reduce their Balance Sheet over the next 12 months by about 300 billion. The other major Central Banks in the world are adding 300 billion per month not per year, per month. As long as the pedals to the metal i think valuations can go higher. Clearly if you look back if you want to look at historical terms, yes the markets expensive but in this day and age of aggressive Monetary Policy, you can make an argument that stocks are going to go significantly higher from here. Lets be clear that the oracle of only ahawaii was talking about stocks and valuations with the big caveat of Interest Rates being where they are or relatively low. Lets assume its a big assumption i know, lets assume that rates are 1 to 2 higher in five years than they are now. Would equities as these salations still look at attractive no, no way. If youre talking about a 4 , or 5 ten year yield on u. S. Governments, no way, no way. The stocks would be overvalued. My argument is, theres no theres no evidence thats going to happen. I think were in a lower for longer environment. The big problem with monetary policies, its not impacting the economy or inflation. The feds concern is ive got asset prices screaming but on the other hand we saw personal income and spending numbers that were kind of ehhh. So the feds in a bit of quandary here. They would like this asset pricing thing to go away. Their problem is large parts of the economy are not ponding to aggressive monetary weve seen the typical reflationry trades perk up over the last months or so, really huge advances here, where in this trade do you see value at this point i think we still see values in the financial. The other thing were seeing is were seeing some of an response to tax reform and so theres some overlap there with some Smaller Companies here in the u. S. Economy, financials, industrials which would benefit from a lower Corporate Tax rate. What were really looking for is the intersection of that sort of reflationry theme along with Solid Company growth and we see that in certain areas of the energy sector, names like slumber je. We see it in certain financials, industrials, where were not excited obviously, plasz like utilities, telecommunications and we still like technology. Theres a lot of growth there and if you look at valuations, we understand the concerns about technology valuations especially in some of the large social media stocks but we think theres still some growth and some room to run there. We appreciate your time, shannon, steve. Thank you. Wells fargo ceo says the bank is better today than it was during the sales scandal but did he convince a tough crowd of lawmakers. Weve got the latest next. Ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise and welcome back to power lunch. The other hearing on capitol hill today, wells fargo, Ceo Tim Sloan testifying before the Banking Committee and having a Fiery Exchange with senator warren. Wilfred frost live in washington with more. Hi. Reporter lets get straight to an example of that Fiery Exchange. Now lets forward to 2016. Two months before the fake account scandal became public. You were then the chief operating officer of wells