Dont get the flu. Keep safe. 48 hours until downton abbey. Im michelle carusocabrera. Maria bartiromo will be back monday. No idea how excited she is to be watching downton abbey. My third coanchor of the week. Stocks trying to end the week on a positive note despite a mixed december jobs report. Right now the dow is up 33 points. Thats about the high for the session. In fact, were moving higher from here. 13,422 and change right now. Nasdaqs had an even better week. Its up four points right now at 3104, and the s p 500 index is up fiveplus points at 1468. So slight gains right now, but we are still up big for the week from that big huge rally on wednesday. So how do you play this market going into next week . Lets find out from todays closing bell exchange, our friend ralph acamp rah and stephanie link from the street, joe greco on the floor here from Meridian Equity Partners and our own Rick Santelli with us from chicago. Ralph, last time you were with us you were wildly bullish. Yes. The biggest oneday point gain to begin the new year. Just the beginning. You think its just a beginning . Did you hear the hissing sound when the yield on the tenyear treasury went above 1. 9 . The hissing, the air is coming out of that balloon, bill. Youre saying the treasury bubble is bursting. Starting to burst. And the transportation index is this close today to making an alltime new high. How can i be bearish . For the novice viewer, when the transportation index is hitting new highs, its got to be confirmed by the industrials. Thats a really bullish sign. Thats a dow fear, the oldest theory in technical analysis. Rick santelli, we are approaching 2 , well, approaching. Were closer than weve been in the last few weeks here, but do you think well hit that . Havent been there in a while . I think its possible. I find it fascinating that we seem to have 20 basis point ranges for long periods of time. In the beginning of the year it was 18210. For much of the last four months its been 160180, and then, boom, weve shot through, so i think its pretty safe to say 180 to 2 may be the trading range well have to get used to, but, remember, when you have a full cup of coffee, when you reach the tipping point, its hard to tell. I think its been more of a splash than a real tip. How but, stephanie link, like ralf, backing up the truck here on stocks, or is that nosebleed level in the tenyear yield frightening you . Im pretty encouraged. I think that the fact that we got through the first part. Fiscal cliff issues, thats a good thing. We have to get through now the debt ceiling, so i dont think its clear sailing by any means. I think youre going to see volatility, but look at the Economic Data here. I mean, the nonfarm payroll numbers here were in line, but they are encouraging on the private sector job growth, encouraging on our hourly earnings, and i think even the ism services was quite encouraging, so the u. S. Is actually on better footing, and i think we can handle all the Tax Implications and the spending cuts a little bit better, about trend line 2 gdp growth, nothing great, but certainly not like the recessionary fears of where we were a year ago, and then globally youve got china recovering in some of the other markets like brazil and india doing a little bit better. So its all progress. Were not there yet. Progress, yes. Joe greco, spoke to you guys on the floor, and theres a group highly skeptical of this rally. They are not happy at all with what came out of washington, and there are plenty of you guys who are very positive like ralph. Where do you stand right now . You know, i tend to vacillate. Ill give a salute to mr mr. Acampora whose class i sat in years ago. Havent we all. At this point look to many of the places that were already referenced and see that theres a lot of opportunities still out there. Id like to drill down a little bit deeper, no pun intended but home builders, xhb and look at the constituent members. Its a place thats just been marching forward. As you get that data that comes out with the Housing Starts and permits and what not, youre going to see that thats going to be the leg that really is going to push us through this year and real heal us when it comes to employment, and then we go to the next step which is energy, yesterday in particular, great news for rig, made a setment with the doj, looking at bp and anadarko and halliburton, and it may, may be very smooth sailing for them, up another 10 , 15 by midyear if they can make nice settlements. Youre a very famous technician. A lot of people follow you. Tell us how you look through the debt ceiling fate that we know is coming. The last debt ceiling debate was horrific and had a major effect on the economy. Lots of volatility. I dont know if its another cliff. I mean, a milk cliff and cheese cliff and everybody is worried about it. Can i tell you something . Ive been doing this for close to 50 years. Ive never seen so many people so negative for so long. Guys, put on your bullish hat. This thing is going to sail. And that is we should point out. Thats a contrarian way to think, right . When everybody is so bearish thats the precise moment you should be bullish. Were talking mega bearish. Airline at 52week highs, housing at 52week highs, autos. A lot of groups have already done very well what about the financials, they are coming on. Hello. Ive got to ring a bell for you. Theres room for more. Absolutely. I was on the floor a couple of weeks ago, and i said to someone i really like bank of america. A young fellow came up and said, gee, i took your class. Got a target at 11. 5. I grabbed him and said what chart are you looking at, boy . Youre looking at the world through a microscope. Step back and take a look at that stock on a weekly basis. Thats a double, triple, maybe a quadruple if youre willing to hold it long enough. Hello, yes. Who had the hmm out there . Triple or quadruple is pretty big. 20, 30, yes, sir. Thats big. Next wednesday is a big catalyst day for bank of america. I didnt say tomorrow. Next wednesday is a catalyst day. Keep an eye on that. Stephanie, you going to rush out and buy more stuff right now . Next week is really important because you get alcoa on tuesday, and more than just their earnings, a great job is done by giving all data points on their markets, aerospace, auto, packaging, truck, and data points in some of the subsectors like truck and starting to trough, so i think you want to start to get into these industrials. Weve been buying them for the last couple of months actually, and even in the defensive side because you want a balanced portfolio. Defensive side, find some names with emerging markets exposure so Something Like an abbott labs with 40 of exposure overseas or Something LikeProcter Gamble which is growing overseas so i think there are a lot of places you can put your money on the cyclic call side as well as on the defensives. Rick, speaking of financials, cme stock doing pretty well today. Any idea why . Well, you know, when i look at what drives the ferrari of futures down on this floor, i see your dollar futures, Interest Rate futures. Well, that ferrari has had a Police Escort to go 20 Miles Per Hour called the federal reserve, and i think some of the issues in the minute and the idea that there could possibly be actually a rise in Interest Rates, well, thats just lighting on fire the potential to do a whole lot more contracts. Okay. Good explanation. Thank you, folks. Good to see you. Ralph, ill see you are later this hour. Well have you on the countdown and well get mr. Acamporas take on how this market closes. Headed towards the close with 52 minutes left. Neither highs. No gangbusters rally, but were holding on to the gains from wednesday, up 32 points on the dow right now. Erskine bowles of the same Bowles Simpson debate or solution that never got put into place, cochair of the president s debt commission, less than impressed with the tax deal that averted the fiscal cliff. Hes going to join us next. Then, its a bad day for lulu lemon shares, spent the day flying high but taking a big hit after a downgrade. Can the company get its juice back, or is it now just a lemon . After the bell, Actor Patrick Dempsey takes on starbucks and wins. Find out how dr. Mcdreamy is trying to boost the seattle economy. How tall was he . Tall enough. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Urge cmon dad im here to unleash my inner cowboy. Instead i got heartburn. [ horse neighs ] hold up partner. Prilosec isnt for fast relief. Try alkaseltzer. Kills heartburn fast. Yeehaw . A missed opportunity. Thats what the debt cofunders Erskine Bowles and alan simpson are calling the deal we got from washington on the fiscal cliff. Erskine bowles has gone on to say it was a chance to do something big, to put our fiscal house in order, and we absolutely blew it. Erskine bowles joins us right now with more of your thoughts on all of this. I mean, what were you thinking as these negotiations were getting closer and closer to the deadline and they came up with this tax bill . Look, bill, i was i was hoping, you know, that we wouldnt take this big, you know, hit in the gut and go over this fiscal cliff and really do some real devastation to the economy. So youre glad they did something . Yeah, look it. We got something. We got about 620 billion worth of revenues. Unfortunately, it was a missed opportunity. This was a magic moment to do something really big about our longterm fiscal problems. Can i play a sound bite for you when it comes to spending from arthur brooks, the president of aei, who was on squawk box this morning and take a listen to what he said. Sure. Its pretty clear that obama believes that the only problem that we have is be a undertaxing problem in this country. For medicare as well . Everything, everything. Theres no indication that he honestly believes that we have a spending and entitlement problem in this country that cant be taken care of through the Fiscal Consolidation that comes around by taxing people. I agree with him, sir. I do not believe that president obama wants to cut spending. Do you think he does . Yeah, i do. I dont think he wants to cut it enough and wont go as far as i want him to go, but, you know, hes laid out 375 billion worth of cuts in things like medicare that are at least a good start. But with all due respect, 375 billion in cuts, thats over ten years, right . Every month we spend 100 billion more than we bring in. 375 billion over ten years when youre spending 100 billion more per month than you should is pitiful. Michelle, thats why our Commission Proposed to cut spending by 3 trillion over a tenyear period. I get it, believe me. You know, weve got to have at least that amount of cuts if were going to put our fiscal house in order. Whats it going to take for the president to get it, do you think . Well, i think its going to take some more pushing on the part of people like me and the Business Community and just plain folks who are going to one day wake up and force these members of congress and the administration to understand that weve got to face up this problem and weve got to face up to it now. Its our generation that created this mess. We are the ones that have a responsibility to clean it up. Well, weve got this next deadline coming up in a couple of months, mr. Bowles, with the debt ceiling issue. We all know that thats going to be used as a tool or maybe a weapon, depending on your point of view, to get some next phase of the deal done. What do you expect to happen at that point . Lets talk about that for a little bit. Look, i think we have three weapons. We have the end of the sequester. We have the continuing resolution that comes to an end, and we have the debt ceiling. I hope to high heaven that these guys dont mess around with the full faith and credit of the u. S. Government. Using the debt ceiling i think is the wrong place to draw the line in the sand. I think speaker gingrich is right, that if they do draw the line in the sand there, they will end up at the end of the day just folding, you know. Lets start negotiating today. What other leverage lets get the fiscal house in order. Lets bring people together and actually do something instead of talk about it. What other leverage is there unless you i mean, there would be no tax deal from the other night if there had not been a fiscal cliff deadline. Now we have a debt ceiling deadline. What other leverage do you have to bring people to the table with a sense of urgency . You have good leverage, the expiration of the sequester in two months. You have the end of a continuing resolution where they could shut the government down. Weve got lots of ways to put pressure on the administration and the congress to actually take some responsible action without putting in jeopardy the full faith and credit of our government. Do you really believe the full faith and credit of the u. S. Government is i mean, are you suggesting that we could miss a debt payment, because i hear members of the administration use the administration use the phrase default on our obligations. We know perfectly well you can prioritize what you use tax revenue for. You can say the world doesnt have to worry. Well make every interest payment, just calm down, and well figure out the rest. Should they make it clear to the world that they will prioritize in that way . Hey, look. It is absolutely crazy to even contemplate having a default on our obligations or on our loans. Thats, you know, anybody who is in business would tell you that. What we ought to do is begin to negotiate now to really bring down our spending. We talked about revenue a lot in the last several months, but we havent talked near enough about, you know, really reducing the cost of our entitlements, slowing the rate of growth of health care to the rate of the growth of the economy, making Social Security sustainably solvent and really stabilizing the debt so that its we can put it on a downward path thats a percentage of gdp. But you know the point of view of the president. He was reelected on the platform that he had espoused during the campaign which is exactly what hes trying to get through congress right now which does not include as much as many spending cuts as the republicans or your commission would like to see at this point. Is he misled on that . I mean, the American People did return him to the white house . I think the president is going to have to move out of his comfort zone and make some cuts beyond those which he would like to do. I think particularly as it relates to the entitlement programs and health care, were going to have to reduce that cost or it will virtually bankrupt the country. How far do the republicans go because it was very clear during this last debate that they were going to be blamed if the country went over the cliff. How far do they stand their ground at the bitter end, and do they should they say, you know what, well take the sequester if youre not willing to do the cuts in spending that are required. Michelle, arent you just sick and tired of this brinksmanship of going from crisis to crisis. Yes. Arent we all. Why dont we act like grownups and start to negotiate today and see if we can find that common ground. You know that. We know that. Many. People out there know that, but its not going to happen, lets face it. What leads you to believe that anybody in congress, in this new 113th congress, is going to act any differently than they did in the 112th congress . Because i know it can be done because ive done it. President clinton set me up to negotiate the blujt agreemealan agreement. Nobody believed we could do it. Partisanship was at an alltime high because they were impeaching the president. We pulled together rather than apart and put the Country First and thats what weve got to do now. It fell to Vice President biden to negotiate the deal with Mitch Mcconnell the other night in the senate. Are you saying that maybe its the Vice President s job to be the moderator in all of this and find the middle ground thats necessary . No, but generally you do have a gobetween any time you do a deal. Thats why you have the whole Investment Banking profession. Good lord, you usually have a gobetween to bring the two sides together to push them each to go a little bit further than they would normally and so you can reach a principled compromise. Sir, the president already came out and said hes not negotiating over the debt ceiling. Hes just not going to do that. Not going to happen. So i dont understand where we even begin. Doesnt sound like hes coming to the table at all. He already got a tax hike. Dont forget, we still have this sequester sitting out there. Its coming due. Thats my question. If the cuts arent big enough to to make the Balance Sheet of america healthy, should congress or the republicans or whoever is so adamant about spending say, you know what, were going to take the sequester and thats it. Especially when you consider that there are those on wall street, who have said, lets go over the cliff. Howard dean has said this as well because the resulting recession that might happen is worth a couple of quarters. Alan greenspan said the same thing, a worth of couple of quarters of recession to get our house in fiscal order again. Do you agree . Look. I never believe that acrosstheboard cuts are a smart way to bring a budget down. You want to go and cut those things that really need to be cut. If you look at the sequester, the things being cut is the discretionary spending. What we really need to focus on are the entitlements because thats where we have growth far beyond the growth of gdp so id much rather see us focus on the entitlements, bring down the cost of health care and make Social Security sustainably solvent and do something about the discretionary spending. Can you ex