Transcripts For CNBC Closing Bell 20141103

Is that why democrats stand to lose ground if the polls are believed to be . We have more on what the survey says of blackrocks rob capito joining us. Dont look now but the s p is close to posting doubledigit ganl this is year. What about hedge funds and actively managed mutual funds . The way a lot of folks are invested in this market. The news isnt so good for them. Well take a closer watch. Tim cook promising the apple watch and maybe not now until springtime. I thought it was now, as a matter of fact. Whats delaying the apple watch or was the spring that cook mentioned early next year . Well try to sort it out. Josh lipton is doing digging. We have a report on that coming up in a little bit here. Entering the final hour of trade, the Dow Jones Industrial average off 20. The s p just barely negative at 2017 and the nasdaq adding 5 points and still the outperformer. Talk about it all in the Closing Bell Exchange today. Sam stovell with us, jake raddic, Quincy Crosby and our own rick santelli, of course, in chicago. Sam, i have to give you some credit here, buddy. You were quoted recently saying you felt the major averages would be in record territory by thanksgiving. We were all saying, oh, sam, youre so optimistic right now. Well, you were you picked the wrong holiday. Thats right. We were at alltime highs by halloween. So now what . Thats right. Well, actually, im smiling and still wrong. I think the markets basically realized it went down too far based on the news or the lack of information that it really had. What i can tell you is that history says but does not guarantee that we are likely to see an advance of 5 to 8 on average before falling into another decline of 5 . So we could be eclipsing 2100 before we start to see a digestion once again. Somebody else here is talking about 2100 by year end. Jeff . Hes not around. Jeff just so you know is talking about 2100 year end. We were just talking about jeff. Thats all. If i can, sam made the point that the market snapback is faster than expected. Is it too fast for your comfort . Well, the fact of the matter is, no, because it was a good thing and said that the market needed to pull back, needed to consolidate. Burn off some of the froth until we had a next move up. And we got that. The question really is, i think, in terms of when the clock really starts ticking in terms of the fed. And its not there yet. We may get a clue on friday but whens been very good and very helpful for the equity market is 2year yields started to bump up a little bit and suggestive of a market that says that growth is coming into this economy. All right. Frank, lets talk about the election for a moment. If the polls are to be believed when all is said and done, democrat in the white house and republicans ruling the senate and the house. History suggests thats good for the stock market. Is that what youre looking for in what impact do you think the election will have on equities here in the u. S. . You know, bill, im always a little bit of a contrarian. Im not sure i believe the polls. I think North Carolinas really, really interesting tomorrow night. Yeah, i think at the end of the year were probably higher now than we then than we are now and im pretty optimistic going into the last three months of the year. Because of the election or snot. No. Doesnt have to do with the election. The economic numbers look pretty good. Rick, looking at the various ways the elections can affect, we look at the muni bonds and where tim proving economy is right now equalling better sales taxes receipts and next year for a lot of municipalities. Yeah, no. Munis have been a very logical story and it shows that the gain mentality, the herd mentality, sometimes puts you really on the wrong track. Yes, there are pockets of the country that experienced some big fiscal difficulties but that really was the opportunity. Its a lot like the equity markets opportunity. I dont expect you see munis continue the trend and talking about the election. There needs to be a little bit of pain. We havent dealt with a lot of issues that hurt the economy. I know that as we look at apples potential euro denominated deal, i was reading a story that should the republicans control both houses, you will probably see tax repatriation holidays in the few chu so i think that i would think that the conservative parties are good for business and might be good for kind of a dose of reality. So im not sure that a double win by the republicans is necessarily going to be great for certain areas of investing. I think its better for the economy as a whole and i think they have become untethered a bit in the past several years. All right. Lets talk about another feature of todays market action, the price of oil which slid at the close. Jackie deangelis at the nymex. Whats going on there . Thats right. Good afternoon to you, bill. Some very intense action here at the nymex today. Intense selling pressure into the close. Lets give you a snapshot of what we saw happening today. You were bouncing around 80 most of the day. Some negative territories, some positive territory. Trade earls saying the dollar is what was sending us lower. That 87 handle, very significant. And then all of a sudden you see technical buying bring us up. In the afternoon, we got a headline that the saudi arabia looking to cut its oil price to the u. S. By 45 cents. This should technically drive Prices Higher and traders looking at a sign of weakness here saying that the saudis are worried about supply in the marketplace and sent us a lot lower. Then we swiftly took out major key technical levels. The first 79. 44, last weeks intraday low and then 79. 05. And then breaking that level, we were down in the 78 handle. A 2 1 2year low. Very significant today for crude. And interesting thing, as well, thank you, jackie, the way in which it knocked down the stock market, bill, as it happened. The backdrop of the conversation for weeks now is the falling price is good for u. S. Consumers and again seeing the nervousness. Frank, i wonder if you think its warpted to lower the prices here. You know something, kelly, i got to tell you. I think the volatility is to be expected. You think back a couple of three or four weeks ago, we were ratcheting up with volatility and off historic lows and the volatility seeing now, folks need to look past it and focus longer term. Frank, just to be clear, youre telling me that you dont think the trend in oil is a trend but just volatility . Yeah. I think just volatility and affecting the market because folks react quickly without thinking through whats going on. I think volatility should be going up in the equity markets and looking at where the vix is right now, i expect to see it higher over a couple of months. Still think we head higher from an equity perfective, though. Sam, the zags bigger than the zigs in the volatility in the oil market. What are you guys thinking of the correlation of oil and equities . Is that still in place or will we see a situation some point where lower oil means higher stock prices . Well, usually the old rule of thumb was for every 10 change in the price of oil that either added or subtracted 25 basis points of real gdp so with Lower Oil Prices that technically should be improving Economic Growth because the cost of running the economy is lower. I think the worry, however, is longer term whens the implication . Are prices headed lower not just because of supply but because of concerns this people are not using the supply thats out there . And the implication that were getting much weaker growth in the emerging markets . Lower trend right now should be translating to an improved Economic Situation but people are wondering whens going on beneath the surface. Quincy, i think about a lot of i was going to say people have been looking at the energy space beaten down in the last couple of weeks and maybe an opportunist trade here. Would you stay away . I think that go ahead, quincy. Quincy . Well, no, i was going to say, we are seeing the chinese buy and buy probably for the Strategic Petroleum reserve and i think whens happening with the equity market and oil prices is the worry i think that the high yield market because if the prices keep coming down, theres a segment of high yield that could be under pressure and i think that is probably the correlation that the High Frequency traders have put into the algorhythms. This is amazing, kelly. You mention jeff reeves from investor place. Com and look who has joined us suddenly. We can conjure people. Call me president obama. I dont know how you do that. Hey, jeff, welcome. We were talking about how you still believe we can see 2100 on the s p even after all the volatility we had in october. Make the case for us. Does that include, jeff, as well, the Oil Price Lower or higher as part of all that . I think oil prices go lower. Goldman with a report of 75 target on it for 2015. So i think oil prices go lower. Lets not forget that the Consumer Power whether or not Oil Prices Stay there past like march or april of 2015 doesnt really matter to me because the lower prices we have seen have finally had a chance to hit the pocketbooks of consumers just in time for black friday. A good gdp report. Consumer sentiment at pretty high levels right now so, you know, i think look further than 60, 90 days down the road you need a crystal ball. Jeff, listen. I think its setting up for a good Holiday Season for shopping. Were with you. Then why is the stock market reacting the way it is . Well, you know, i mean, i dont want to give the whole platitude of a market of stocks but stock market and it is true. Back to the idea of oil prices and gas, exxon and chevron didnt do too badly on the earnings to diversify. They have a chemicals business, big natural gas arm of exxon now and while i think gas prices affect companies, stay away from them. Same with gold prices. Miners nuked and doesnt mean necessarily it holds back the stock market. Commodities are more volatile. You have to be responsible, stay balanced across asset classes. All right. Jeff, thank you for stopping by. Who would you like to conjure. And everybody else. I got one. How about rob capito . What do you think . Lets see if it happens. 48 minutes to go here into the close. The dow off 19 points. Some pressure when oil closed sharply lower today. The s p 500 barely positive at 2018. Listen to this survey result. Is this what main street americans think . 1 in 4 say that the economy and the job market are improving. Thats according to this new survey of blackrock and incredibly blackrocks president rob kapito will speak to us exclusively. Is the apple watch running late . Spring versus early next year as previously stated by ceo cook or is that what he meant by spring in the first place . Pros explain whats going on with the watch coming up. For tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. We have breaking news on auto sales. First day of the month. Phil lebeau has details for us. Reporter auto data with the sales rate for the month of october. 16. 46 million vehicles. Roughly in line with expectations. Again, 16. 46 million vehicles. That was the pace for the month of october. Well be back in about 20 minutes with some of the key story lines from last month and, oh by the way, guys, new numbers about how much it cost you to fly and pay fees. Youre not going to believe the numbers. In a bit. Its always a new day, bill. Talking about the cost of flying is going up. Phil, thank you for now on that. Blackrock taking the pulse of investors in a new survey. 1 in 4 american investors believe the u. S. Economy and job market are getting better. More than a third say both are getting worse. This, of course, defies the numbers but as they say, especially as the midterms approach, perception is reality. With us now in an exclusive, we welcome back blackrock president robert kapito. Welcome back, sir. Thank you. Thank you for having me. Headline, what do you think . Are people that pessimistic about the economy . Its fascinating stuff to tell you today. So we went out to 27,500 people around the globe. And we found out that while people are somewhat confident about their financial future, theyre really worried about the economy, really worried about unemployment. And they know that they have to think about retirement but they havent done anything about it. In this particular survey, we found that two thirds of the people have saved less than 25,000 for retirement. And the other third saved nothing. So we are going in to a climate where retirement is going to be a crisis in this country. And what were trying to do is raise awareness of this. So, so many interesting things came out. The millennials are very different. Theyre actually saving. And one of the things is that they actually spend time in social media searching for ways to save. And we wonder, why are the millennials saving and the baby boomers or generationx are not saving. Why do you think that is . Both of my kids are millennials, great savers. I dont know where they got this. They dont want you to have to move back in them. How nice is that of them . Thats the reason theyre doing it. But the millennials didnt go through the financial crisis with a lot of assets and werent fazed by the memory we have of losing a lot of money. And they also feel like they have a lot more time. So theyre actually investing for the future. And you cannot invest for the future in the future. You have to invest today. So, we have gone out, taking the survey results and we are trying to tell people its important to not time the market. It is not timing the market. Its time in the market and start investing today. And so this brings up the very point that we have been debating for weeks on this show. Given the volatility in october, as well, which is do you wait for the 10 correction . Have people missed the market sitting out . Generally speaking, make the case for equities from here. Why should people be in the market at alltime highs with other things they could do with their money . Heres more of the story. So people have now found out theyre going to live longer. What does this mean . In 1950s, youd live to around 68. Today people are living to 80. So that means that if you havent started saving and youre sitting in cash and 63 of people are sitting in cash, this is terrible. You cant make that money in cash. So now youre going to have to work longer. If you have to work longer, that means theyre going to give up less jobs to the young people. And so, unemployment is already high and in fact in europe 20 to 30yearolds, unemployment is 15 . Thats a lot of social impact to that 20 to 30 yeeryearolds on street. Cash is a wrong investment to make. So its the shorttermism thats causing the problem. You have to invest long term. And people just dont do it. Now, you mentioned october. Everybody is talking about waiting for the dip. And im going do get in. The dip happened. No one got in. So last year lasted about five years. Last year in cash, you didnt get the return. This year, even a total return bond funds will yield around 6 . Thats 6 that you left on the sideline sitting and waiting in cash. So equities is a better answer. Bonds are a better answer, certainly better than cash. Let me be clear about the result here. Are people more concerned about the overall economy or just their own financial situation where theyre not prepared for any possibility down the road including retirement . If thats the case, isnt it possible that people are still remembering the financial crisis of 2008 and 2009 and can you blame them for being in cash right now . They need to seek advice. They need to get out there and understand you cant save for the future in the future. You have to invest today. A good, longterm investor and plenty of ways to invest long term, large cap equities that pay a dividend, high yield, municipalities and so much better than cash so theyre optimistic on the financial future and not doing anything about it. Actionable question of the midterms tomorrow. How will you re allocate if at all and the municipal, bond issues to tax issues people are voting on, as well. What is on your veen . Last time i was here i told you im optimistic. Earnings will be better. 80 had better earnings. People have got to stop being so negative about the markets. The other thing is i still think theres cash in the sideline thats coming in. Over 10 trillion sitting in bank accounts. Midterms dont matter . In japan, theyre investing in the u. S. Markets and other markets. Oh yeah. Theres a lot of money to come into the equity markets, come into dollar denominated securities. But youre not addressing the election. Do they matter . Im optimistic but they do matter because people are still upset about leadership. Theyre still upset about the direction of the economy. Theyre still very upset about unemployment. And change is good. And so, people i think are looking to a change and thats reflected in the election polls. Always good to see you. Always good to see you. Kelly, you are doing a great job. Bill, you are lucky to have her. Dont think i dont know that already. I didnt pay him to say that. Rob, the president of blackrock. 40 minutes to go into the close. And dows trying to fight into the positive. I would say it was positive much of the session earlier today and after the weak close in the oil markets, seeing pressure on equities and still off about 30 minutes. S p flickering around the flat line. Nasdaqs up by 1 or 2. Another day, another record for apple. Is the watch hitting unexpected speed bumps . If it is, you wouldnt know it looking at the shares hitting another new high today and the pros to weigh in next. Car sales, still in overdrive . Phil rounds up the leaders and the lag wards in the race for your wallet coming up on closing bell. So i can reach ally bank 24 7, but there are no branches . 24 7 its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. Its in this spirit that ingu u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. There is no car because there was no accident. Volvos most advanced accident avoidance systems ever. The future of safety, from the company that has always brought you the future of safety. Give the gift of volvo this season and well give you your first months payment on us. So ally bank really has no hidden fethats right. Accounts . Its just that im worried about you know hidden things. Ok, whys that . No hidden fees, from the bank where no branches equals great rates. Heres the question. Is the apple watch hitting store shelves later than ceo tim cook previously announced . Thats the question. Its unclear, isnt it, josh lipton . Speaking to tim cook a couple weeks ago he repeated that the new apple watch would go on sale in early 2015. Tech titan has never offered a specific day or month for the launch but mark german quotes an internal communication from angelaarntz putting the debut in the spring. Were going into the holidays. Well go into Chinese New Year and then a new watch launch coming in the spring, spring this year remember starts on march 20th and ends june and notes that could be later than some anticipated and regardless of whether the watch launch is pushed back, jean munster says it wouldnt change much for investors with modest expectations of the watch in 2015. Munster thinks apple sells 10 million watches in first 12 months adding 5 billion to the top line, remember, this is a Company Expected to generate 9 billion and munster says a Financial Impact and not a significant one at least initially. Apple did not respond to requests for comment. Kelly, back the you. Josh, thank you. Stay right there. Lets get more on this. Joining us Lance Ulanoff and you were nodding as josh was talking about. I mean, once again, second guessing tim cook and apple and does it matter when it comes snout. I just kept laughing reading the stories. An internal comment made on a video. Spring, literal spring or sometime after the new year . Thing is people arent always very specific but one thing we know is that gt advance, the Company Making sapphire for apple for the touch i. D. And for those watches filed for bankruptcy. Pulled the contract with apple and the one indication that maybe, i thought about this right away. Like, what happens to all of the sapphirebased products . An apple watch isnt out there. Apple as always with the watch honestly taking the time and does slip a little bit, you know, waiting or getting new materials or change something, they will. Overall, i have to say that for me the apple watch is just a big, fat question mark. Im surprised to hear 10 million in 12 months. I think that is probably i dont know. I just think its what do you think . Maybe a couple million. Heres the thing. This is with wearables, there is no one design, there is no one product thats the ooh, i must have this product because design is specific. Angela arntz knows that. The many options with the apple watch, i dont know. Josh, love your thoughts on this. To what extent is the did the cart get before the horse on the apple watch . Why is it that supplier of making the sapphire glass, for example, remember their bankruptcy . I mean, understandably they werent doing the glass for the iphone and thats a big problem and i wonder if all signs point to the product not as real and as imminent as everybody thought when the announcement was made. We are not sure. Lance pointed out, in some sense, listen, early 2015 and mark pointed out this on the piece. Now, we are thinking spring, spring meant march then that really wouldnt push expectations back that much. If youre talking about june, of course, thats a different story. I think lances broader point youre trying to figure out and we wont know for sure until it hits, did apple get it right . They put so much time and resources and capital into the device. Think about the balance you have to work out. You have to get a device with a functionality that works and apples ambitions here are pretty tall. Ultimately, the Company Wants you to replace what you already have on your wrist and get the functionality right and the device to look really good. Its got to be something that people are proud to wear, guys. There is a little bit of an x factor with the apple watch. Only one that includes a payment, a mobile wallet basically payment capability in the watch. Nfc. Works with apple pay. That maybe will sweeten the deal and apple pay side theres controversy now with some vendors who dont want to use it. But overall i think its just you know, i think that the wearable category has a real future but i just think that this is really early days and in a way i dont think apple is the company i dont think apple can solve it the way of music players, with mobile phones. I just dont think its going to happen in that way for them. But i think apples going to be committed to the product. Lance, only thing matters is streaming taylor swifts album on the apple watch or not. Thats the key question. I was telling her that. That was my contention. Hes listening to it all weekend nonstop. No spotify. Shake it off, though. So 2013. Thank you so much. We have about half an hour to go. The dow off about 43. Back around 17,350 the s ps off by a couple of points and same with the nasdaq today. Boyd gaming up 10 in the last year and ceo will explain why the stock is worth betting on. A lot of issues facing the casino business these days. Sports betting, for example, among other things and talking about that in moments. The conversation we just had, data showing the fewest home buyers in 30 years. Whens going on. Stay tuned. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. So open an account with schwab. And when a market move affects, say, a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move, wherever you are. And start working on your next big idea. And start working on your next big idea. Dad,thank you mom for said this oftprotecting my future. You. Thank you for being my hero and my dad. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance could be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Heat map, all 500 components of the s p 500 index. And you can see its about 50 50 today in terms of the upside to the downside. This, lets keep in perspective following the big rally of last week, especially on friday that put us in record territory. What is moving today, though, price of oil, especially on the close today putting us well below the 80 a barrel level. In fact, lets see. We are still at 78. 34 right now. What was that . Twoyear low i think jack we deangelis was telling us. Reaction of people across america has been something to watch. Giddy, i tell you. Yourself included. Yes, i am. Dominic chu is watching on todays big movers. Hey, dom. In addition to being giddy, lets start with home depot. Raymond james downgrading saying much of the positive of the company is already priced into the stock. Home depot by a percent and a half on the trade. Irish Airline Ryanair raising the annual profit forecast, nearly 20 . Thanks to a surge in winter bookings and also cutting fares by up to 10 in the new year trying to take market share from the rivals. Now, a tough day for big oil. Hitting two and a halfyear low. Exxonmobil, chevron among the losers and allergan saying it was approached by another party regarding a multiple transaction and actavis. Allergan is trying to head off a hostile takeover. Back over to you guys. All right. Dom, thank you very much. Lets talk about gambling. Big business in this country. Atlantic city, may be in shambles recently with the closeful of a handful of casinos. Boydgaming is a bright spot. Their atlanticcity based casino saw the quarterly revenue rise become 5 year over year. With more is ceo keith smith. Welcome. Thanks. Thanks for having me on your show. You bet. We learned from the other casino operator that is las vegas is having a pretty good year. Atlantic city is hit hard. What is the future for the borgata . Its a bright future. Number one property in the market since we opened. And clearly, Atlantic City is going through a transition with some properties closing but i think we have a bright future. I mean, ive been on the east coast now 23 years and Atlantic Citys been suffering, such a boom and bust cycle. You know . Casinos have come and gone there. Do you ever foresee a time to see actual stability in Atlantic City . Well, sure. I think if you think about how Atlantic City started in 1978, the only destination on the east coast for casino gaming and over 30 years thats changed dramatical dramatically. Borgata competes favorably with casinos in Atlantic City and east coast. We continue to view Atlantic City as a good market, a market thats slightly declining but it will be stabilizing and we view the position as a strong one. Keith, i want to ask you about this potential move to spin off the real estate. How likely is it to pursue Something Like that . And unlock significant tax savings. Well, its a very interesting question. Look. Looking at an reit is increasing shareholder value and can come in many forms, whether its through mergers and acquisitions or reduction of debt or corporate structures. You know, the reit is all about. With respect to significant tax savings, we are carrying a significant tax on the well right now and only part of the equation but this is a long, complicated analysis and taking a while to work through and then continuing to execute on the strategic plan. Sure. I ask because its a trend, you know, we started to see it with Companies Like win stream. When one goes a lot of other vs to follow with competitors. If one person pursues this structure, and gets a shareholderfriendly advantages out of it, then everybody else kind of has to look at it, as well. You guys have the potential of being the first mover in a potentially important trend here. Well, once again, we are studying it very diligently. Going through a thoughtful process. It is one way to increase shareholder value but not the only way and thats what our company and manage m team is focused on is increasing shareholder value so its a long process and when we get through it, well let everybody know. Sports betting, a movement in new jersey to get that thing through. It hasnt happened yet. Do you see that as a new revenue stream necessarily or a possible new source of competition for you guys . I mean, if they do finally get some meaningful Sports Betting here in new jersey, i mean, you are going to see other Companies Want to race here, dont you think . Well, i think Sports Betting in new jersey can be a real uplift for the Casino Industry and for somebody like the borgata in particular. Having said that, as long as Sports Betting is illegal at a federal level, i dont think we can participate, you know, until all those lawsuits get worked out. How long do you think it will be . Boy, thats a good question. Your guess as good as mine on that. Federal government is involved and i dont know. Well be ready to take advantage of the opportunity if and when it becomes legal at a federal level. All right. Well leave it right there. Keith smith, thank you so much for joining us. Thanks. Keith smith, ceo of boyd gaming. About 20 minutes to go. The dow off 34 points, bill. Still. Kind of a lack of volatility here, oil is much more interesting today closing at a twoyear low below 80 a barrel. Well see if that has a longer range impact here. Watch the dollar here, as well. Hedge funds bidding good riddance to october. And well have a live poll you wont want to miss. I have a feeling the results quite telling. Do you think . Stay tuned. Location. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. The getaway vehicle for all the confidence you need. Td ameritrade. You got this. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage, or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Welcome back. The nations auto giants reporting october sales all day and some had good reason to cheer. Phil is back with us for the leaders and the laggards, phil. It was a pretty strong month for the industry. 16. 46 million vehicles. Lets look at the top four in the u. S. And leading the way, once again, chrysler with sales increasing 21. 7 . Toyota better than expected. Gm and ford roughly in line with expectations coming off tough comparisons of a year ago and roughly break even people expect. Two story lines that stand out from last month. First of all, suvs are surging. And jeep in particular, up 52 . At the same time, its tough to sell a hybrid in a market gas under 3 a gallon. Prius sales, down 13. 5 last month. Take a lock at the auto stocks and the industry as a whole right now, look at the sales pace here. 16. 4 million. Thats the estimate well finish this year compared to 15. 6 last year and 10. 4 million in 2009 and later this month, chryslerspecific earnings numbers of Fiat Chrysler on wednesday morning and the numbers posted specifically for chrysler and jeep and thats coming on wednesday morning. Kelly . Phil, thank you. Before we let you go, theres news, as well, on airlines. Perhaps higher ticket prices. Yeah. This is a new report. I just got this within the last hour coming from cartroller and this is what the Airlines Worldwide bring in with ancillary fees, changing your ticket, whatever it is, baggage fees. 49. 9 billion this year for airlines around the world. Thats a 17. 2 increase. On average, the average passenger around the world is going to be paying 15. 02 in ancillary fees, whether you like it or not. Thats what the airlines are doing right now and thats why theyre so profitable. 17 , wow. Speaks to their strength right now. Thank you, phil. Crazy. And to the frustration many feel for them. Thats for sure. Tenplus minutes to go here into the close. Dow off 27. We just learned that you see the dow down about 30 points. Chevron and mobile, exxonmobil, are contributing 30 down points inside the industrial average so without those two components we would be flat right now. Price of oil lower, those oil stocks are going with it. Firsttime home buyers sinking to their lowest level in 30 years despite the improving job numbers and the rock bottom interest raits. The housing pros shed light on the dry spell and what it could mean for the future of housing in america, as well. And after the bell earnings. Well have the numbers the instant they hit the tape. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. We asked people a question how much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to like, pull it a little further got me to 70 years old im going to have to rethink this thing its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Dow down 30 points and much of that because of the oil stocks moving lower inside the dow because of the lower price of oil today. Settled just above 78 a barrel at a 2year low. Theres the industrial average down 33 points. We have anthony chen from chase and ron peler. A lot going on. Youre a uber bull on the u. S. Economy. What did you make of what japan did on friday . Their surprise quantitative easing approach and whats that do to fed policy here . It moves the baton to other Central Banks and now the bank of japan and then probably European Central bank. I did analysis looking at our market in the United States and on average 3, 6 and 12 months later the s p is higher. On average. Does it delay raising rates in this country because the feeling is when they start raising rates, the dollar through the roof and hurts things. Remember what dudley and others said. If there are Global Concerns out there, it may, in fact, alter the way of monetary policy. May slow down the pace but i think janet yellen put down the gauntlet. Are you investing right now or waiting or what are you doing right now . We are in a highyield market and buying especially now when theres a lot of volatility in the marks, its a great timing to a buyer. High yield being a relative term these days. Where do you find high yield any. When the index money is flowing out, theres no more Market Makers. Were a buyer out there for the offers. Liquid enough market . It is. It is. We create the liquidity. The Market Makers are gone. What kind of yields are we talking about . Our 30day is about 2. 5 . The etfs are pigeon holed over a billion dollars of debt outstanding for the companies. Crazy. The elections. Does it matter as far as the markets go here . Well, again, a lot of people ask a big question. The answer is, usually after the Midterm Elections end we tend to see that the equity market does better in november and december. Doesnt matter democrats or republicans control. No change or the incumbent party is gaining seats, you get a 6 pop in the s p 500 market. If the incumbent party in the white house loses, you get a pop of 3 . I looked at all the Midterm Elections back to the 1930s. Election matter to you at all . Nope. Okay. We get paid every day an election or not. What about fed policy and what about the possibility of delays of Interest Rate increases by the fed depending on what fed policies are overseas in europe and asia . For us, its good, if rates stay low. The spreads over treasuries, good value in high yield and people have to find yield somewhere. If rates are low on the short end, they come to high yield. All right. Good to see you both. Thank you. Thank you for joining us here today heading toward the close. Coming back with the closing countdown. See if we budge. After the bell, new details on what may have caused fridays deadly Space Tourism rocket crash in california. Jane wells is live there. Shell have the latest coming up. Youre watching cnbc, first in business worldwide. vo watching. Waiting. For that moment, where right place meets right time. And when i find it i go for it. announcer at scottrade, we share your passion for trading. Thats why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so youre always connected, wherever you are. Because at scottrade, our passion is to power yours. Introducing a pm pain reliever that dares to work all the way until the am. New aleve pm the only one with a sleep aid. Plus the 12 hour strength of aleve. Welcome back. About three minutes left in the trading session. Lets put it in perspective. We had a huge rally. Alltime highs. Today, call it digestion. We use that term a lot in the stock market. This is the dow today. Volatility here. We went to positive territory midday and then at the end here, we saw some selling and much of this may be attributable to the selloff in oil late in the trading session today and lets show you oil and how it did. Traders watch that 80 a barrel level a lot for wti. And it fell as you see here we low that level appreciably on the close. Right now, 78. 35. A decline of 2. 7 . Thats what we keep an eye on tomorrow, as well. Talk about earnings coming up after the bell here tonight. Three big ones to watch for, sprint, herbalife and ag and the insurance sector and fractionally. Sprint up 6 . Alibaba. Reporting i believe tomorrow as i recall. Tomorrow. Yeah. I think it is. Michael kors, as well. Hello, bob. Good to see you. Youre perfectly reasonable to conclude the market was affected by oil. Our market moved down. Certainly reasonable to say theres a connection there. I think what happened, there was an announcement trying to raise prices. Saudis. To the far east. Lower price a little to the United States and everybody realized at this point theyre probably not going to be able to get away with raising prices. Cartel is opec as a cartel is slowly falling apart. Remember the days when remember . The 70s. Even after that. Sure. When any hint that they would be talking about higher prices at opec, price of oil would skyrocket and far from the case today. Looks like the market is saying, this is just a reasonable interpretation. They dont believe the saudis successfully push through a notable price hike and talk all they want of cutting production but the mrkts not believing theyre going to be able to do that. Its a different world with the United States production now. They did announce they were going to cut prices to the u. S. Thats not that important. Were practically self sufficient. Its a minor business for the saudis. Their business in the far east making a substantial amount of their money at this point. Thanks, bob. See you later. Going out with very fresh minus signs. Dow down about 25. Stay tuned for Earnings Reports on the second hour of the closing bell with kelly evans. See you tomorrow, kel. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans at the new york stock exchange. Monday and a day when the dow tried to start positive for the week and didnt quite happen. Well talk about how much the drop of oil prices at the close had to do it. Again, the big decliners of names of chevron and exxon. The s p 500, meanwhile, just slightly in the red today and the nasdaq and the theme of this year. Lets talk about it. Erin gibbs from s p capital iq with a booming voice today. Brace yourselves, everybody. Kayla is here and ben white from politico in the house. Also with us for more on the market action, fast money trader guy adami. Guy, why is it that markets finished weaker here . That drop in oil . Come on. Weaker . Unchanged on the day effectively. No question, oil. Think about it. S p rallied from the 1820 low to 2020 and rallied 11 in 5 or 6 trading days . Thats remarkable. Huge. The move to the upside is equally remarkable so i wouldnt make a lot of todays action. Wait a minute. Guy, are you joining the dump the dow camp here . What . What . What . I know you guys are talking a little bit about this. Maybe its not that relevant. I have no idea the only camp is day camp at 13. And i ditched the rest no. Im no no camp. Im in the guy adami camp. Where should we look for the signal of the market . The russell. Right now, we had that move down to 104. We talked about 103 key support. We had a tremendous support. The onus back on the bulls and the russell. They need to close above 121. If they cant do that, its right back down to 108. Good point, erin. Reminds us, too, one of the reasons to be attractive here, Less International exposure as the dollar strengthening. Maybe rather be more exposed to the u. S. Than some of the overseas markets. Absolutely. Also, we havent quite seen the earnings beats for the s p 500, we have a Record Number of Companies Beating estimates. 75 of all companies are beating the s p, earnings estimates for Third Quarter. 10 more than normal and coming from the misses so usually we see about 25 missing. We have 16. Like this is just a phenomenal quarter. Is that because companies are so good at keeping the bar low and clearing it . You would think so but the revisions have been equally higher and usual annual revisions go up 3 so it really may be companies but i wouldnt accept such a big jump quarter to quarter. Looking past eight quarters, it is really tight. 62 , 65 . Yeah. You havent been so have you . No, i have not. Just, just being safe for all of us here. Ben white, i guess the real question is how much should investors focus on the Midterm Elections . Is it the balance generally between the white house and congress or some of the more specific things that voters and states speaking on . Whats so interesting about this is you have got not today but markets setting the regular highs and unemployment at 5. 9 and yet the democrats, incumbent Party Getting crushed tomorrow by all we know. You would think that given the backdrop with the decent economy, good stock market, the incumbent party in the white house would do okay. That wont happen. Whats likely to happen, republican s likely to take the senate and probably more gridlock in washington. A chance for tax reform, immigration reform, a couple of other things that senate republicans, some up in 2016 want to get done and then you have got the house to say no to that. You can see on the screen there, sprint down after hours. Down to the tune of 7 . Kelly, sprint just coming out with the earnings with a loss of 19 Cents Per Share. Thats a wider loss than analysts expecting. They were expecting 6 Cents Per Share. Revenues coming in at 8. 49 billion. Again, that was under the 8. 59 billion that analysts had been expecting. As you can see there, the stock down 6 in after hours trading. Still going through the numbers and pulling up the subscriber and churn numbers as we get them. Back to you. Thank you. When at t sneezes does sprint catch a cold . Apparently. Dan nathan said they were on the way to zero. Yeah, i mean, i think this is a lousy quarter. I havent seen all the numbers but given what morgan said, im surprised its not more than 6 . Yeah. Just thinking through that as we again get earnings here shortly of aig and hear from herbalife, too. Kayla, what did we learn today . This is a sharp decline in equity markets in october, a sharp snapback and then beginning november on a new page and what is that page . Back to the future . I love how bullish equity analysts are trying to be in the last two months we have seen so many famous bears or infamous bears rather like retracing exactly what they had said before and now everybody wants to be bullish and so many reports this morning pointing out the fact that october through may is traditionally according to wall street the best sixmonth period for the stock market overall compared to every other sixmonth range in the calendar range and bob pointed out an interesting statistic this morning. Even though many estimates for the Fourth Quarter are being held up and, of course, the Third Quarter earnings as erin points out stronger than expected, analysts are starting to take down the revenue and earnings estimates for next year and people seem to be fairly bullish of this period right now because of the earnings or floor of Central Banks under the stock market and anyones guess of what happens in 2015. Back to morgan sifting through the sprint numbers. Hi, kelly. We told you about a top line, bottom line miss. But also, misses on some of the other important metrics with these wireless carriers. Postpaid net subscribers, sprint has lost subscribers. For years now. Same thing here with this quarter. 272,000 postpaid net subscriber loss. The street expected 187,000 loss and thats worse than last quarter, as well. Also, the churn rate, the rate of turnover of those subscrib subscribers, postpaid for the sprint platform, 2. 18 , higher than the street had been expecting of 2. 12 . So two more numbers that missed the street. Kelly, back to you. Thank you, morgan. Sprint cutting jobs as you can see and shares down 8 after hours. Speaking of earnings, stay with the theme and cover aig now. Results hitting the tape. Dom . Kelly, heres what we have right now. Stock up. Aig earnings per share 1. 21 versus 1. 09. Revenues of 8. 63 billion. Analysts looking for 8. 75 billion and aig said that operating income for the Third Quarter was up 23 to 1. 7 billion. They also repurchased shares of about 1. 5 billion and they boost their Share Repurchase authorization of 1. 5 billion and early head loons and bringing you more details coming to us but right now, an earnings and revenue beat for aig. Kelly, over to you. Thank you very much. Yeah. That buy back looks like new information. The shares slightly positive at this point. Looks like going down through their lines of business, we are talking about an improvement especially in the life and retirement piece year on year and direct investment book and generally speaking book value up 15 year on year. You can see now positive to the tune of 1 . So, sprint, again a big miss there. Aig more positive, erin. Yeah. You know, we got out of aig a couple years ago and i think they have really started to finally turn around. And with this beat, i would take a good look at them. Aig once again. Yeah. Ben . This goes back to the Midterm Elections i think not earnings specifically but a backdrop of fundamentals, are they good or not. Sprints cutting jobs. Does the average person understand or believe conditions are improving for them . They dont. I was covering midterms in North Carolina and virginia recently and talking about the fact they dont feel comfortable with the job prospectives, wages not going up and gets to the backdrop of the election and top line numbers look pretty good. Unemployment numbers look pretty good and the other data and doesnt feel very good for voters and republicans will win a lot of Close Senate Races and why the Obama Administration will take another big loss in the midterms despite what looks pretty good and aig i have to stop and wonder at the fact of doing as well as they are and i was at nathan lane and about to fall and collapse. Oh sure. That goes back to the administration, too. They helped rescue wall street and aig and everything else. They dont get credit for it. Where we are now in 2016 versus 2012 or where weve come from. Nor do they want to take credit for it. We have come a long way. Guy, a last word before you go. Either specific to speak to the earnings just hit or more broadly. Should people, seeing the decline of chevron, exxon, time to back away from the energy space . I mean, i think the fact that energy goes im one of the few people think that the move in energy is bad, not good. We can have that debate. Ill say this about aig. Thats a strong quarter. And this is going to sound crazy. They have to change their name. Because people still associate everything that went wrong six or seven years ago with American International group and it was a dozen people in connecticut that basically took down the firm. Lets not vilify an entire organization. This was a great quarter. I think if this stock is called anything but aig its significantly higher right now. Like Manchester United maybe. Manchester united, right on hey, you know, erin gibbs, playing hurt. Give her a shoutout. Thats yomans work. Yeah. Erin, take a bow. I think well keep it nonverbal. Guy, were going to keep you around to the next block, okay . Right on. S p 500 is soaring and Fund Managers are badly underperforming. Should you be investing in index funds . Thats next. Plus, where do you think you get the most bang for your buck, hedge funds, mutual funds or s p 500 . You can voice your opinion. And your blood is going to boil when you hear how much of the tax dollars spent on Starbucks Coffee and gym memberships for government workers. Details coming up. You know how fast you were going . About 55. Where you headed at such an appropriate speed . Across the country to enhance the nations most reliable 4g lte network. Hows it working for ya . Better than ever. Howd you do it . Added cell sites. Increased capacity. And your point is. So you can download music, games, and directions for the road when you need them. Whos this guy . Oh thats charlie. You ever put pepper spray on your burrito . I like it spicy but not like uggggh spicy. He always like this . You have no idea. At t. The nations most reliable 4g lte network. Welcome back. Despite an october turnaround, hedge funds had a brutal month. Kate is here. Kelly, yeah, it was definitely a rough october for hedge funds and for the macro players in particular and also some of the event crowd sufrd, as well, in october. Year to date, some of the big players that trade global stocks, currencies and credit, macro players, in other words, down substantially year to date through the 31st and fortress macro down close to 7 and after an upturn after successful bets on japan helped by the unexpected round of qe and brazil trades. At the same time, event driven titan dan lobe down 1. 3 for october with overall performance year to date of 4. 6 . Showing that the months volatility clobbered some of the usual high fliers in the stock market and it is minimal. Recently enjoyed a big gains on names of amgen and alibaba and not anna darko. Topping the list as he has been, kelly, bill aikman and managed not to lose ground despite being down 4 at mid month, gaining back from that and really continuing the dominant position even as his own shares are kind of flat. Thats right. In the european market. Waiting for earnings of herbalife. Right. Appears to be one of the losers for the month of october. They had a nice rally and probably a setback for him. We dont know what the economics are of that trade, hes probably not doing well when that stock is doing well. We want your opinion on which is the better place for investors money. Head to cnbc. Com vote right now to weigh in. So, hedge funds are having a tough year already. Then october happened and as Brian Reynolds points out, you take the sharp down and upturn and not like they tracked it and put them further and further behind. What happens now . Ill be curious to see the inflows for the big mutual funds this month. The sense that people had in october and, of course, this is anecdotal, hedge funds particularly on the volatile day, i believe the 15th yes. Out of a number of positions and looked like merger isnt successful and so will people decide that theyre favoring index funds instead . Yn. Does it matter at all theres no real action in washington to play . You could do shutdowns, debt ceilings and good for hedge funds. Right. Thats kind of dead and i dont think its coming back. Whens that mean . I think thats a great point and an example of the dissolution of that motif, really. People bet it would happen and clearly the signal of companies not necessarily going to fight through what the Obama Administration had done. Do you know of political arbs like that, kayla . Not anymore. I mean, certainly used to be a lot. Especially on the antitrust front and theres stale few deals going through the coffers and hedge funds betting on. What happened to volatility being a good thing for hedge funds . Because in the last couple of years they would say, wait, underperforming because theres no volatility and coming back, our prowess in stock picking will shine through and obviously not the case. Absolutely. You would think volatility is good and wondering actually for the banks its a bit better because, obviously, they can make money on the spreads when times get choppy. Yeah. Hedge Fund Managers i know and the long short space and gals some of them have been saying this year, im long in some regard, maybe long the russell for instance, i think theres a growth story playing out and i have puts in the s p. At some point i will have to make up my mind and right now im doing both and i think people had a hard time choosing. And by the way, we should mention, not just a story about hedge funds and elite world of investing. Mutual funds are suffering the same problem and a lot of them underperforming and the s p beating any actively managed strategy. Driving everyone crazy. The only thing with mutual funds is greater liquidity. None of the gating policies and lower fees. So thats an attraction i think if people decide that theyre going to start throwing the towel in on hedge funds. You still wonder if etfs, the simplest and many ways depending on which one you pick and can find them extremely simple and how many years does it take of the s p doing what it is to get people to just say, forget about it . I wont try. How much more does this influence Institutional Investors that say im done . Exactly. Do they look at it and say, nows the time. Why am i spending this money . Thats a trope we have been hearing in recent years and well grounded. Theres an underperformance for the most part. However, we saw maximum aum of this year and so at least, you know, some point in 2014 people were still pretty bullish. I think that calprs was potentially a thought leader in that community. I know of other Pension Funds that said were thinking of the same thing and a problem for the Hedge Fund World because they like that sticky money. You see them looking for different ways to get more permanent capital. The Pershing Square ipo being the same thing and could be impactful. Thank you. Thanks to everybody. Be sure to stick around and catch guy adami at 5 00 p. M. Talking alibaba ahead of the Earnings Report tomorrow and also today had the best day since the ipo. And well send it over now to dominic chu here for a quick earnings alert. Were watching shares of retail me not. This is a large digital marketplace for offers, that kind of thing. Its reporting earnings here. Lets go through the numbers. 16 Cents Per Share versus estimates of 13 cents a share. Revenues also coming in slightly better, 57 million versus 56 million of estimates. However, the Company Offered lightest guidance for the Current Quarter than expected. They did say that our outlook incorporates the weaker than expected visit of the foreign markets and this is a big mover for the stock, current cfo is stepping down, replaced on an interim basis by the current general counsel and starting a search for the new cfo and cfo of retail me not is stepping down and lighter revenue guidance and earnings and sales for the past quarter did come in slightly better than expected. Back over to you. Thank you. We are also now getting details on president obamas meeting with fed chair janet yellen. John harwood has the story. Hi, john. Hi, kelly. We did get a readout from the white house on the meeting, first one on one meeting between janet yellen and president obama since her confirmation. The president the white house said that they discussed the ongoing implementation of doddfrank which the fed has a big part of, as well as prospects for growth and comes right after a Third Quarter gdp report that completed the strongest u. S. Growth in more than a decade so some good new tons whorizon. Theyre watching whens happening in the next six months and beyond that. Kelly . And all this as he prepares to leave for asia, as well. John harwood, thank you very much. If you thought the improving market giving the Housing Market a boom, think again. Purchases falling to a 30year low. Is that a warning sign for the next leg in housing . Well talk about that next. And did fridays deadly Virgin Galactic crash set back the industry . Tom kendricks joins us with his view coming up. Well be right back. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage, or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Were a force of nature, too. For tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. New study finding that not even an improving job market and lower Interest Rates can lure firsttime home buyers into the market. Diana . Reporter kelly, we expected to see the numbers rising but, actually, it is just the reverse. The share of firsttime buyers dropped to 33 this year, thats down from 38 a year ago according to the realtors annual profile of home buyers released today. That is the lowest level in nearly 30 years, the longterm average in this survey going back to 1981 has firsttime b buyers at 40 of the market. Surprisingly, not improving. For younger buys, it is sticker shock in home prices after those prices really bounced off the bottom dramatically thanks to big investor demand last year and tight credit. But i want to talk about this. Behind me. These townhomes part of a development from a group in mostly owner occupant neighborhood and theyre going to be very pricey so for these renters it is a choice, not a necessity. In a neighborhood like this, you will pay a premium for what youre getting but the reality is what we see here in d. C. Is that the renters can afford to do that. Reporter so why would a renter pay thousands of dollars instead of just buying a home right here which would be cheaper right over across the street, for example . Well, again, it is this lifestyle choice were talking about because we can talk about affordability and tight mortgage credit but if theres a shift, theres a removal of the stigma in renting and a shift in the desire to have that flexibility that renting offers, and you have people willing to pay for it, well, thats going to change the dynamic of the housing recovery going forward. Kelly . Thank you. Stay with us. Well bring in a realtor working with firsttime buyers, shes patricia delanwav in miami. Welcome. Patricia, so tell us, if youre a realtor how busy are you . Hello, kelly. Well, let me explain to you why this is happening. Even though the banks loosened the standards of firsttime home buyers, theyre not buying as expected and the reasons are a lot of young buyers still have a lot of debt, heavy Student Loans and theyre competing with investors. Cash buyers. And also, this generation is a lot more transitional. And what that means is theyre ready to get up and move for a job or whatever. Theyre keeping their lifestyles a lot more flexible. And then, another thing is theres a shift in lifestyle. Theyre getting married and having kids much later in life or theyre not even getting married at all or having kids. And the Housing Market recovery. Its just pricing out all the young buyers. Kayla, i think a lot of it, too, in other words, partly an inability to get financing and partly just not much demand for it. There isnt. Even though some of the policy sought to make things easier for the firsttime home buyers, what i hear over and over and over again from people who are millennials and renters and considering a first home purchase, they say, look, a bank can change the terms for me and cant change the price of what im actually buying and at this point in so many areas with prices having run up so high, it just feels like maybe the better opportunity is to keep powder dry and wait until prices go down again and im wondering if diana has heard people talk about whether one when we get to another downturn and firsttime home buyers to keep prices relatively stable. I think, look, you are waiting for prices to come down a bit. Still gaining. We are seeing them come off the big gains of a year ago, two years ago and seeing the prices start to moderate an we havent seen them of 2006 in the height of the housing boom but the fact that they have to put money down, that they have to have skin in the game on this and Interest Rates start to rise soon and the Monthly Payment. People buy on a Monthly Payment and not the overall price of the home, youre weighing two things. Trading the flexibility for the mortgage, more that Home Ownership to pay so many other things involved in a house and, again, it is just so interesting to me even with rents sky high, these are premium rents were looking at here, so much demand for that, theyd rather pay the higher rent than the monthly mortgage payment. Is anybody here a home buyer . Currently looking . A homeowner. I am. Renter. Renter. My question is a cultural change of millennials and cant commit to a social network much less a house. I have been in to six or seven. Right. Look at other generations, as well. Yeah. How is genx doing . Think about the economics. Diana, you have talked about this many times. A lot of my len nillennials ared with student debt. Pritss as kayla pointed out is high in the urban areas where the jobs are and had stagnant wages. Despite the interest raitds, thats a portion of the story, right . I dont think its just the millennials here. We tend to put everything on the millennials. Theyre generally firsttime home buyers but remember, we have a lot of genxors who lost their homes in the crisis and even though theyre repairing the credit right now, they say i dont want to be back there again. Even if were never going to crash nationally, i dont want to be there again. You have them not getting into it and baby boomers selling the big homes in the suburbs and they want to move into this to give them the flexibility and they have the money to pay the rent so i think we have to get off the whole its all the millennials fault. We have to go. Patricia, can you tell us in a word or two the breakdown, how many of the people youre dealing with are millennials and much older . Not as many millennials. The generationy, credit is still an issue. You have programs such as fha with 3. 5 down, the credit score needs to be in the range of 580 and sometimes 630 and its not possible for that generation. Patricia, thank you. Diana, really appreciate it, as well. Its no secret the federal government speaking of the economy wastes money more often than it should. Federal ploeing spending the dollars on everything from gift cards to coffee. And it was all a secret until now. The shocking details when we come back. Sheila you see this ball control . You see this right . Its 80 confidence and 64 knee brace. Thats more. Shh. I know thats more than 100 . But thats what winners give. Now bicycle kick your old 401 k into an ira. I know, i know. Listen, just get td ameritrades rollover consultants on the horn. Theyll guide you through the whole process. Its simple. Even she could do it. Whatever, janet. For all the confidence you need. Td ameritrade. You got this. How in argentina,rass change engineering in dubai, aluminum production in south africa, and the Aerospace Industry in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 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. Federal Government Employees on a shopping spree with your money. Dont worry. They didnt spend it all at once but micro purchases on taxpayer funded purchase cards. Legally they dont need to tell the public about anything less than 3,000. So, a freedom of information act request shows auditors have discovered some spending red flags. Take a look at this. 799,000 worth of gift cards. 33,000 of best buy gifts for employees including ipods. 3,000 of gym memberships and next guest discovered 30,000 worth of starbucks purchases of Homeland Security employees. Joining us is scott mcfarland, the Investigative Reporter of nbcs affiliate in washington. Thank you for joining us. Great work. And can you just explain in very simple terms these are federal employees. Why they didnt have to report what they were doing . Is there like, how many Different Levels of a problem are we talking about here . Well, kelly, they have to report these purchases inside their agencies. Bookkeepers and auditors will know. But federal agencies dont have to publicly release their shopping lists. Each agency has dozens if not hundreds of workers who have these little micro purchase cards. Swipe it, buy something. Less than 3,000, the purchase goes through. But the shopping lists arent released and thats where we got interested and using the freedom of information we requested all the purchases the department of Homeland Security made that included the key word starbucks. Last year alone, 30,000. Scott, can i ask you about the purchases . I mean, when they responded to you, did they say this is for government purposes . Were Homeland Security. We need to keep the people awake while theyre on the job or clients or whatever they do, is there an explanation for this . Either that or the gym memberships . Whens the response of the government saying why this money is spent . They have only responded to a fraction of the purchases. The department of Homeland Security and its auditors said some of the those purchase, 12,000 in starbucks in california was for coast guard employees. But they havent responded to all of them. An auditor at a congressional hearing said theyre looking into it. We have an Inspector General of the administration told us, quote, going to starbucks for the micro purchase card seems like a hard sell. Well, you could imagine them buying cartons of starbucks for an Office Meeting or a gettogether and relatively cheap form of entertainment but the gym membership harder to explain away i would think. In each case, these federal agencies have a procurement process to go through to buy equipment. They want to buy things for the office. Using a micro purchase card, they say its for the unforeseen. Stock up on coffee, the government has a process for that. That all being said, micro purchases when theyre used wisely, no fraud, can save money. Procurement can be expensive. You dont want a notebook because youre out of notebooks but some cases theres fraud. Gym memberships. They get luxury hotel rooms, spa treatments. In the case of the General Services administration recently, guys, a case of buying ipads and best buy goods. Tens of thousands of goods worth on the cards. Whats the purr of these cards . I imagine when they were first put into use at many of the agencies which dont have widespread corporate cards like many big private companies do, it was thought they would be beneficial but what was the original purpose and how quickly after they were put into place did they start getting, you know, veered off that original path . Theres several purposes. Not only make a purchase quick, its much easier to swipe a card than the process and also they found that by using a micro purchase card, you give business to Small Businesses having difficult getting into the federal game and procurement system. But auditors at each Agency Police these things and often find problems. We gave you a few examples but theres an audit at the department of Homeland Security that is ongoing they say into purchase cards. Its a continual process to check how these actors use the cards. To be clear, there are dozens if not hundreds of employees at each of the agencies equipped with the cards. And now we have a better sense of what theyre using them for. Thank you so much for joining us and for working on this story. Really appreciate it. From the penthouse to the base independent a matter of days. May be the first el va pitch. Security guards attempt to get a selfie with president obama gets him fired. Details are next. And still to come, commercial space travel. Its far from clear. Well talk to a former nasa astronaut, Tom Hendricks, for his thoughts. Dad,thank you mom for said this oftprotecting my future. You. Thank you for being my hero and my dad. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance could be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Welcome back. Herbalifes Quarterly Report is out. Dom . Down 11 , 12 in the after hours trade after reporting earnings per share of 1. 45 misses the average estimate of 1. 51 and reports earnings of 1. 26 billion and misses the average analyst estimate of 1. 32 billion and the Company Offering guidance for the Current Quarter of earnings per share of about 1. 30 to 1. 40 per share and misses the estimate per share and some of the headline numbers coming out right now. As a result, the shares down 11 in trading so far. We have got about 258,000 shares transacted in the after hours session and lighter volume accelerating. 284,000 and up to date on any new developments and earnings miss, a sales miss and guidance light on earnings for the Current Quarter and as a result those shares down by you can see 11 . Thats the trifecta. Thank you. Thats more reaction of Herb Greenberg following herbalife saga for quite sometime, herb. What is your reaction to these numbers . Well, kelly, i think whens interesting is i would have thought they pulled out stops possible to make a number that looked good here. Ive not looked at the numbers. Of course, its light and when you have a Multilevel Marketing Company and growth is slowing thats a concern. You start seeing growth slow in some of the regions like, you know, north america where you see volume points are actually down more than last quarter, you have to start wondering whats really going on here and the criticism on the company, hows it affecting things and i see china is lighter than expected so you want to watch this because, again, you know, i have said in the past, kelly, that whether they meet or miss or beat doesnt really matter because in the end the entire story here is what happens with regulators and federal trade commission . Starting to see the slowing growth, that gets to the issue of real growth and what how will investors value the company . They obviously are not taking the news well. Herb, it is kate here on the desk and looking at the results right now. It says guidance excludes the impact of expenses primarily related to legal and Advisory Services related to ongoing business matters. So this somewhat disappointing lower revised guidance doesnt even take into account legal issues. Meanwhile, it would seem theyre trying to put what they can behind them. They recently settled a classaction suit and hired an exftc person to oversee some of the practices and interesting and wondering the role that will play. Kate, you know, even the classaction lawsuit thats settled over the weekend or announced late friday, thats a classaction lawsuit. Spin it any which way you want. Not you but the company and Anyone Around it. Ill come back to it as ive said from the start on this thing. All that matters is the ftc and seeing slowing growth for the Second Quarter in a row and thats thats probably disconcerting i would suspect to the bulls and until you dig through the numbers, really, this is not easy stuff. Very complicated. You wont know whats really going on and thats whats really going to be important here. Just curious, i see they have an accompanying announcement that a decadelong director Le Roy Barnes is stepping down. Do you read anything into that . Im not as familiar with the board composition. He was not the board member i was looking for. To see if he was stepping down. Seeing the headline, i peeked at it. You know, any time you have a move like that at a time like this it raises eyebrows but they have several icon members on the board and a variety of people. Read into it what you wish. And we will. Were going to look and expect the icons potentially to weigh in on this, as well. Herb greenberg, thank you very much. Want to get back to headquarters and dominic chu now. Dom . More statements out of the release from herbalife. They talk about the forwardlooking statements and the risks they see going forward, among them are related to china and they caution about the uncertainties relating to interpretation and enforcement of legislation in china governing direct selling, also uncertainties relating to the interpretation enforcement or amendment of legislation in india governing direct selling, unability of licenses to expand the direct selling businesses in china as well as adverse changes in the chinese economy, chinese legal system or governmental policies and they speak about the International Aspects of the direct selling model as risks in their forwardlooking statements, guys. Back over to you. That will do it, dom, when the growth market, as well. Thank you, everybody. Commercial space travel, ntsb investigators are piecing together the details of fridays crash. Up next, astronaut Tom Hendricks joins us to discuss the future of this industry. Stay tuned. You can bring back a lot of things from a trip around the world. But you cant always bring back customer data. Because many customers dont like it when their data moves around. Can i go now . If youre going to do business globally, you need a cloud that can keep your data where it needs to be. Today, theres a new way to work and its made with ibm. Just want to say, i bundled home and auto with state farm, saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. Frrreeeeaky for tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. But parallel parking isnt one you do a lof them. Ings great. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. Welcome back. Investigators still fact finding at the sight of fridays Virgin Galactic crash. Jane wells is in the desert and joins with us the latest. Were starting to get our first cancellations. 3 of customers are asking for refunds and the daily mirror says princess beatrice is deciding shes maybe not going to want to go up in space after all, thats if Virgin Galactic ever gets off the ground again and if that happens is still up in the air. We have seen ntsb moving pieces of the spacecraft to a building at the space port. The latest information is one of the pilots apparently unlocked a mechanism too early which folds up the back end of the craft to slow it down on descent. Seconds later spaceship two broke apart. Pilot error may be a factor. It does not appear the new fuel which was being used in flight for the first time and some have criticized, doesnt appear that was a factor, though the new fuel and new engine have not been ruled out. Its a grand program which has had a horrible setback, but i dont think anybody watching this program would want us to abandon it at this stage. In the meantime, investigators are still trying to figure out the cause of a second private space disaster last week, the explosion of an orbital science rocket upon lift off in virginia. Friday i will be live at nasa where lock hooheed martin is planning to roll out a rocket. That is a public venture. This is the old model where nasa commissions a project, pays for, it and we the taxpayers own it. That will be friday. And, jane, thank you very much. We look forward to that and with us now is Tom Hendricks who began his career as a fighter test pilot in the u. S. Air force. Tom, its great to have you here. Did you know either one of these pilots . No, kelly, i didnt know mike or pete, but my deepest thoughts and prayers for the family of mike and i pray for the quick recovery of im sorry, Mike Ellsbury and pray for the quick recovery of pete. Im curious as we hear people say there are risks involved in this kind of venture whether thats putting it too mildly or whether this is going to be a serious setback. Well, they call these test flights because they are what that name says. Theyre tests. And we should be looking at the Positive Side of this, and that is that although a craft was lost, it didnt have passengers aboard. This cause, whatever the ntsb determines it to be, will be fixed and the vehicle will be safer and more reliable before it takes passengers up. Jane mentioned in her report that there is kind of this old model new model where weve seen nasa with public funds and this moving to the private market. People are interested at first and then concerned and some of the celebrities who were going to fly on this have canceled their plans. These aircraft and these missions have a purpose beyond just tourism, dont they . Its important that this works for everybody, isnt it . Absolutely. The way you should look at this is scale composites is similar to a boeing. Theyre providing the vehicle and testing the vehicle for the airline which in this case is Virgin Galactic. Theyre bringing innovation into the realm that you call the old school. And tom, just a final word. What more do you think happens from here . Is it up to virgin . Is it up to the faa . Well, i think then ntsb will determine the cause. The faa may get involved because the future of space flight will end up being controlled by faa. Theres a Company Called golden spike planning to bring people to the moon privately, blue origin, bigelow. This is not the end of space flight. Tom, thank you for your perspective this afternoon. Tom hendricks, we really appreciate it. Thank you. Breaking news on honda and phil lebeau has the details. Hi again, phil. This also happens to do with the that kedah air bag investigation. They are looking into whether or not honda failed to report deaths and injuries, especially with those relating to incidents that could involve takata air bags that malfunctioned. The ntsb looking into whether or not honda may have failed to report deaths or injuries. We reached out to honda. We have not received a comment yet. The nhtsa administrators says if they have found anything that was not supposed to be reported that was not reported, they will be taking action against the automaker. Guys, back to you. All right, phil, thank you very much. For now following that story, of course, along with herbalife. Look at shares again. Which are getting crushed after hours. This after the company missed top and bottom line. The ceo will be on fast money tomorrow at noon. Well be right back. receptionist gunderman group. Gunderman group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Sometimes they just drop in. Always obvious. 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. Welcome back. Time for five second final thoughts with the panel. Ben, you get to go first. Republicans take the senate but we may not know it until december or january. Louisiana, georgia both going to a runoff so we get to do a couple more months, wont that be great, of Midterm Election coverage. Just what we want. Kate . I want to hear more about herbalife. I look forward to hearing from their cfo tomorrow and getting details. Kayla . Baba earnings before the bell tomorrow, 7 00 a. M. First quarter as a public company. Always interesting, always volatile. Much more on squawk alley. Thanks for being here. Fast money is coming up in a few moments with melissa lee and the gang. Whats on tap . Back trans and bodily functions, ie, the vomiting camel. Im so happy to turn it over to you at this point. Its a two humped camel. Anyway, fast money starts right now. Live from the Nasdaq Market site in new york citys times square. Herbalife and sprint both getting killed in the after hours session. Are these dips buying opportunities . Well debate it but we start off with the calm before the storm for stocks. A quiet day for equities before tomorrows alibaba Earnings Report. Thursdays Central European bank meeting and fridays job report. Most of the strength was in the dollar and oil prices with closed at the lowest level in more than two years. Along with this track the