To log up a fifth straight session of gains. Bern bernanke getting ready for a q a on fed policy. The economy, will we help or hurt the markets . 23 will fine out. I think this is also a feds minutes day, ladies and gentlemen, that is always an exciting one. My partner sue at nyse. Sue. Hi, ty. For the first time, hedge funds will be allowed to advertise to the general public under a rulet with them. Kate kelly is here with the details. Its been a long time since they changed any of these rules, and i noted, kate, that it was pretty much a unanimous decision with one very vigorous dissent. What do you make of it . Thats right, sue. It was a 41 ruling on that piece of the issues that they took up today, so this was a much expected but long delayed vote really. The commission agreed to lift just to remind people a longstanding ban on general advertising for hedge funds and other companies that engage in private offerings. That could theoretically be anything from s. A. C. Capital to the next facebook as well as a bevy of far less successful companies. Its the risk that has the consumer advocates most worried. It was intended to give private and Startup Companies more access to advertising. The question is how to protect investors from unsavory businesses . One way the s. E. C. Has proposed and voted on today is that by banning socalled bad actors from certain securities offerings, a measure that received unanimous approval today, they can provide some protection. Another is to consider steps to streamline the investor eligibility reviews that issuing companies are required to do, and down the road theres talk about raising the eligibility bar, tyler, from the current 1 million in networth or 200,000 or 300,000 per year per couple to something higher. These were the socalled accredited investors. This hasnt been done so far. Right now its 1 million and 200,000 a year in income. Given that bar was set 30 years ago . I believe it was 1982. Just talking to robert frank about it, 1982, and, of course, the country has gotten much wealthier. Were you in second grade. I dont even think i was born, tyler. Come on. It that accredited investor threshold designed to works on the assumption that people have enough money to withstand a loss, or is it that people with that much money they got to be smart . An intelligent test or a approximate . A couple of logical leaps. Obviously just because you have money doesnt mean youll make wise investment decisions. We all know. That was quote, unquote wealthy in this country . 1 million in net worth is unattainable tom people but there are far more millionaires now than in 1982 so theres a question of whether they need to raise the net worth bar so whether you have the investors who can lose money in that net. I like the idea they went unanimously on that vote about keeping the bad apples out. Now thats a controversial move. Thats right. If you have a felony record or otherwise meet this definition of bad actor you cant solicit. That theoretically is supposed to ward off the Bernie Madoffs of the world but he didnt have a felony record. He would be barred from soliciting funds now. Got to run. See you, kate. Thanks very much. Sue . Breaking news in the bond market. The tenyear note is up for auction and its a fed day. How did it do . Rick selly is tracking the action at the cme. Got a glance at the bidtocover ratio. Doesnt look as strong as it has in the past, ricky. What do you think . I really grapple with this one, cplus or bminus, went cplus on it and ill tell you why. The wi right at 2. 67 on the bid side. Thats where we priced 21 billion, reopened ten years. The yield 2. 67. Thats good. It priced solid this that regard. However, sues right. 2. 57 bid to cover, well below the 2. 84 ten auction average, but the auction average is deceiving. Last time we had 2. 53. But, to find a lower bid to cover id have to go all the way back to august of 09. Didnt like the bid to cover. The indirects were a little bit light excuse me, a little heavy at 38. 6. Lets call it average, but the directs like many directs havent been up to snuff. This one is down at 16. 3. Good news, too, dealers only took about 45 of the auction so its not in their hands. Not a great auction, but weve had a lot of volatility in the markets. Indeed we have. We sure have, ricky. Thank you very much. Let bring in Kenny Polcari and bob pisani. Kenny, you made the point, we were talking right before you went on air, that you dont expect a major change from bernanke, and if the market did, wed be down more than the 27 points were down. I absolutely think thats true. Theres not a lot of volume, people being cautious but the market is holding itself right here. I dont see that hes going to say much of anything but we can increase and decrease or stay the course. At the moment were data dependant and are staying the course. Thats the answer. What the market hears is what the market is going to hear. Thats the problem, what the market hears. The last time they Jeanmarie Vincent they sent out the troops. Certainly the jobs report is going to enforce that idea. Ill tell you the one thing that bernanke has caulked about, want to hear more about, is when will they stop asset purchases completely . He floated the idea they might use 7 unemployment as one before. Id like to see a little more flesh on the bones on that guidance, not when its necessarily going to start. A lot of people think september, i dont, but when is it going to end . Whats the procedure for ending it . That would be nice to hear had a little bit more on that. I think the market he needs to make clear to the market, and i told this to you earlier, kenny, the difference between taper and tightening. Yes. Just because they are tapering doesnt mean they are tightening. And, again, if the market perceives it, the Market Forces the tightening, then they lose control of rates which is what they dont want to do, so its a very, very, very tough line hes got to walk. And then they just hold the purchases steady for a longer period of time. Most of the market doesnt expect them to tighten until the end of 2014. Or even 2015, didnt he say 2015 last time about tightening . A lot of times you hear the word tightening and tapering being used interchangebly and they really arent. Appreciate it. Thanks and back up to you. Bernanke speaking, a lot of crosscurrents here today. How are you playing it . Saw a lackluster tenyear note auction and richter depicket that had in chicago, but were seeing the message coming out of the fed. Seeing clarity but seeing a consistent message. Going to continually strengthin the u. S. Dollar and therefore the Euro Currency will continue to weaken. How do you play that, get long the eeo, and that allows you to see were a percentage away from the alltime highs. Fomc minutes coming out. We want to short s p and you can do that via the etf sh. Thats what were getting into before the announcement. Usually rising rates are anathema to stock price gains and usually they mean a slower economy. The fed is not raising rates and we just talked about that with kenny and bob, but the market is certainly raising rates. Absolutely, and the velocity, the key to the whole thing. The velocity and move in rates. Here we are hovering on 2. 6, bouncing around. What does that mean . Whats the Ripple Effect and a lot of people are trying to figure out how does that hurt you . Yet another one of the crosscurrents. We have to go and do a little bit of breaking news. Believe were going to the breaking news and eamon javers. Reporter thats right, tyler. If you know anything about who snatched 1. 2 million in cash off of that swiss air flight back in june, there could be a 100,000 reward in it for you, the fbi just within the past half hour, 40 minute or so putting out a notice that the insurers behind this company are offering 100,000 for any information related to the apparent theft of 1. 2 million in cash off of that swiss air flight. The lloyds of london group of insurers is behind this offer, and it looks like they are really scouring the earth here for leads on who it was who snatched that money right off the flight apparently as or before it landed at jfk airport. If you know anything. Ill make the phone call as soon as i get word. Josh lipton with the market tick . Check ought all scripps, forecast of growth. Analysts who rate this a buy called the news a validation. Longterm turnaround. That stuck up more than 9 right now. Tyler, back to you. Josh lipton, a decision they had a blow to apple. A federal judge ruling that apple conspired to raise the Retail Prices of ebooks, a trial for damages will follow antitrust violations at issue here. Apple currently trading up 49 cents at 422. 82. Jon fortt has the details. People largely shrugging this off. Apple saying they did not conspire to fix ebook prices. At the end weve done nothing wrong and will appeal the judges decision. The doj calling this a victory for millions of consumers who choose to read books electronically noting that prices of ebooks went up an average of 18 when apple got into the market with this. And the judge in this case sort of picked apart apples arguments when she went through this, saying that apples tactics did force prices higher, even if they say that wasnt their goal. Steve jobs own words provided compelling evidence, she said, of this conspiracy and that apple was fully complicit, even though they werent the ones who directly raised prices. The thing, is tyler, the games moved on. Its about video, not so much books, and this is really a unique case where apple was an underdog getting into a market and wanted to raise prices in a way to get in. Even amazon is not selling those books for 9. 99. It sounds for now at least as if apple intends to fight this extremely vigorously. They will do it and books, again, strategically arent where the fight is. Its not clear that this ruling is going to have a lot of repercussions Going Forward. Just bad headline for apple. Thanks. Lets go down to sue. Hi, ty, and were talking about the health of housing. Mortgage rates soaring to twoyear highs and thats really impacting those looking to buy a home. Diana olick joins us from washington with a look at how rising rates are affecting deals out there. The sharp spike in Mortgage Rates is already taking its toll. Take a look. Mortgage applications to purchase a home down 3. 5 just last week, but down 28 in the past month. Real Estate Agents at an open house in Northern Virginia say the story of this housing recovery, well, it is changing very quickly. Whats happening is were pricing down. Over 600 but now 550 and below. The quick rate spike is unprecedented, but if you want to see what happened when government stimulus suddenly ends, check out the hangover from the home buyer tax credit in 2010, new home sales dropped 38 in a single month. You see it there. Buyer demand was pulled forward. At the same time troubled underwater borrowers were pushed into government loan modifications. The result now is very low inventory which is pushing prices too high too fast. What weve done with all the stimulus in the Mortgage Market is do some serious damage to the natural order of housing where firsttime buyers become repeat buyers and moveup buyers in the future. Reporter now hanson is predicting a 19 jump in cancellations among the Home Builders and a big drop in existing home sales and prices, but plenty more of that online, reallycheck. Cnbc. Com, and well talk more about it on street signs. Sue . Look forward to it, diana. Thank you. In washington, Immigration Reform a major focus on the hill. The u. S. And china also kicking off their strategic and economic talks today. Well speak live with the president s top economic adviser coming up next on power lunch. Plus, Smithfield Foods ceo getting ready to be grilled on capitol hill next hour over his plan to sell the pork producer to china. Will Congress Block the move . Find out when we come back. [ male announcer ] frequent heartburn . The choice is yours. Chalky. Not chalky. Temporary. 24 hour. Lots of tablets. One pill. You decide. Prevent acid with prevacid 24hr. Welcome back to power lunch. Im Bertha Coombs at the nymex where wti nymex crude today is surging after a very bullish inventory number from the government. We saw a draw down of nearly 10 Million Barrels for the second week in crowd stocks. Also saw a sizable drawdown of just over 2. 5 Million Barrels of gasoline as well. That has the entory complex moving higher and wti nymex is the trade everyone is watching, sue, because weve also noticed that differential between nymex crude and brent has narrowed to less than 3 now. Back to you. Absolutely bears watching. Thank you very much, bertha. Lets bring in jeff kilberg as to how to play oil. First of all, what do you think and what kind of position would you put on . On futures yesterday we talked being long the futures, and the folks at home can play this via the etf uso and right now in egypt they are trying to put in new leadership, economists to help mend the pleasing, but we dont see any unrest being resolved any time soon. The next resistance is at 110. More room to run though the global macro headwinds, everything continues to go higher. Touched nearly 106, a penny away. Thanks very much. The administration releasing a report today called the economic benefits of fixing our broken immigration system urging the house to pass legislation. The senate, of course, has already passed it version of the bill and did so at end of june. Joining us from the white house is gene sperling, director of the National Economic council and assistant to the president for economic policy. Gene, good to have you with us and back on cnbc. Great to have you here, and i note former president bush is giving a major speech on immigration today down at his library in dallas. How first do you answer the concern that moving ahead on Immigration Reform will take jobs away from resident americans, and how does the senate bill address that . Well, i think the economic evidence is overwhelming that this type of common sense Immigration Reform is good for economic growth. Its good for productivity, its good for jobs. Weve also seen that it will lower our deficits by 850 billion over the next 20 years, and because of the influx of younger workers and more undocumented workers paying payroll taxes, weve seen it will actually increase the solvency of Social Security by two years, and i think you have to look what else is in this bill. This bill brings in new visas for people doing startups, who are creating jobs. It conditions the visa on them being able to create jobs, that creates jobs for people here. The studies overwhelmingly show that for native existing workers, this immigration is almost always a good deal. This even shows that over 20 years wages would go up half a percent for the economy as a whole, so i i think, you know, its very interesting. You often have me on the show replying to paul ryan or Grover Norquist or Douglas Holtz eakin. This is something where those leading republican budget and Economic Experts and someone like myself are in complete agreement. We agree that common sense Immigration Reform is a win for economy, a win for growth and win for deficit reduction. A lot of compelling numbers in here but i want to come back and get very specific here. What do you say to people who say that when you ease the path to citizenship or resident status for immigrant workers, that it takes job away from american workersers, whats your direct answer to that . Heres the direct answer. Right now you have 11 million workers who are undocumented and live in the shadows. They can be taken advantage of. They can be paid lower wages. That ends up being unfair competition against existing workers. When those 11 million workers come out of the shadows, one, they are paying their fair share of taxes. That is good for other americans, but secondly, they cant be taken advantage of and they cant be used to undercut the wages of other workers, and what i also say is when you talk to some of the Great AmericanTechnology Companies they will say that having more high talented workers come in helps them keep location here, so having a certain number of additional talented engineers and scientists doesnt end up competing with u. S. Workers. It actually helps them keep their location here, and that can mean thousands of more jobs for american workers. Let me ask you sort of a twoheaded question in conclusion, first, sticking with immigration. Are you hopeful that you all will be able to work with the house and move a version of this bill through and that it will ultimately become law, and if so when . And second, what are the Critical Issues in the talks now the strategic and economic talks between the u. S. And china. Well, in terms of with the house of representatives, look, this is serious legislation. Its going to have its starts and stops and remember how you started by reminding us that former president bush is speaking on Immigration Reform. You have to remember that this is a largely bipartisan issue that brings together people, the former president bush, former Vice President ial candidate paul ryan, republicans, democrats, business and labor. So i think the economic and the political case for this is overwhelming, and i think that that momentum will overcome the legislative obstacles were seeing now, and i remain confident of that. We obviously are continuing our frank and honest discussions with china on trade, on investment, on cyber security. The president had frank and candid conversations recently with his chinese counterpart and thats continuing, both on the security and the economic dialogue, and i and i will be among those participating in the Macro Economic and Budget Dialogue that well have tomorrow. Gene sperling, thank