York city all the way out to the west coast in california. With that. And Silicon Valleys zen master will join us today. This is the guy that the tech giants like google turn to when it wants to boost productivity and innovation and spark creativity in workers. Youre going to meet him, down at the nyse today. Thats going to be an interesting segment. Are you channeling your inner trader, ty . I am in a zen state of mind, sue. And stocks unfortunately are not in a zen state of mind, down about 73 points right now on the dow, the s p 500 is off about 5 and the nasdaq is down just fractionally. Think about the week we have just gone through. It began with the removal of Larry Summers as a leading candidate to be the fed chief. Then the tragic shooting in washington. The nontaper day on wednesday. And now, votes in washington about defunding obama care and continuing resolution. Theres a lot for investors to mull. The first week with a lot of unsirtsty. China did not fall apart. We saw europe not falling apart. Syria sort of resolved itself, its not over, but this week a little more uncertainty with the fed surprising everyone and, of course, with whats going on in washington. Lets take a look at whats happening here. Rate sensitive stocks, second day in a row theres a probable. Mr. Bull hard came out saying we could have a taper in october. We dont particularly need. And as you heard the Government Shutdown also weighing on the markets as well. Take a look at some of the emerging markets. This is a yoyo. We generally were up this week. Down today. And finally i just want to note bond etfs have been up the last couple days including Corporate Bonds and Treasury Bonds the tlt right there. The longterm treasury. That means yields are coming down. Coming down. I want to mention we have a very active afternoon, big volume, rebalancing in the s p 500. Happens every quarter. Remember today the dow. The dow changes. Three stocks going in, three stocks going out and that will probably create, i dont know, the guess about 100 million 90 million to 100 million share volume towards the close. A lot of activity on the floor. Of course ill be covering all that. Very interesting couple hours. S p rebalancing, apple waiting down, buying back stock, google has a big ad, adding about 4 . Youre going to see action in apple and google towards the close. We talked a minute ago about that potential government showdown. The voting thats been going on in washington. Just an hour or so ago. It could have huge implications for the u. S. Economy. The house passing that bill today to prevent the Government Shutdown, but as a condition of that, it would defund obama care. The president , of course, has already said he would veto that and the Senate Leader reid has said that bill is dead, dead, dead. Warren buffett sounding off on cnbc about the dysfunction in washington. Take a listen. The market is not going to fall apart because they expect washington will only act irrationally for a certain length of time. It would have to get soft. So i dont its so dumb. Its disturbing but it isnt disturbing in terms of investing or in your beusiness plan. Thats what buffet says. Chief washington correspondent john harwood on the case and has the latest on this budget battle. Hi, john. Hi, tyler. Warren buffett makes a lot of sense in that sound bite. I wish i could tell you how this is going to end. I cant. Washington is filled with ka boo ki theater. Just had the first act play out and you heard the results of that when john boehner came before the press after that vote was over. The American People dont want the government shut down and they dont want obama care. The house has listened to the American People. Now its time for the United States senate to listen to them as well. Thank you. Now despite all those cheers, tyler, we know that the senate is not going to listen on defunding obama care. We know that obama care is not going to be defunded. The question is, whether that was a cathartic enough event for those conservatives within the House Republican caucus that theyll be ready when the bill comes back from the Senate Without the obama care defunding provision, that theyre ready to fund the government as of the end of september and keep it open and then raise the debt limit. It may take as Warren Buffett was indicating, a little more amount of irrational behavior and extend it further, get reaction from the market before members will be beat noon doing what they know they must do. Theyre not ready there yet. Thank you very much. Were going to talk about the fed in washington in a second. But as you know two days after the feds move to keep its quantitative easing in place, two fed president s speaking out just a short while ago. Steve liesman is here with the headlines. We wills get to those interesting comments in a moment, but i want to first report on the strong comments from Kansas City Fed president , voted against the fed decision at the meeting earlier this week, not to reduce stimulus to the economy. Heres what george said. She is disappointed by the fed decision not to taper. The fed faces challenges to its credibility and predictability. The fed risk confusing its message on the taper and needs to be more clear about the path of future rates and the fed needs credibility to ask the markets to trust Forward Guidance in the future. She thought a lower unemployment the lower Unemployment Rate and sufficiently positive data was enough for the fed to taper at the wednesday meeting. And she said the fed is not taking into account the potential costs of qe. And markets she said could sometimes get it wrong and the fomc cannot let markets dictate policy. Lets talk about those comments that sue told us about from st. Louis fed president jim bull hard in the past few minutes. Hes talked but this is newer stuff today at 55. The recent surprises show that qe works. He points out there was a june surprise where the fed was more hawkish, rates rose. September surprise, more dovish, rates fell. Thats how you would expect classic Monetary Policy to work. This show qe is like classic Monetary Policy. Taper is tied to improvement in jobs and low inflation allows the fed to be patient. Maria interviewed jim bulllard and asked if the fed could taper in october he said there would be more information. Whether we can take action there or not i dont know but it whiz a live meeting and possible we could move. See more of the interview on closing bell and her sunday show on the money and one more thing im sorry, sue. No. Youre full of news today. Bill dudley, well have that on tuesday. Fantastic. Look forward to that very much. Always a terrific guy to talk to. Steve, focus a little on washington quickly. We have to . I think we do. The fed is. I think i was very struck by the fact that they actually cited the discord in washington as one of the reasons that they chose not to taper. That should be a big wakeup call to congress but doesnt seem to be working. I want to throw the control room a curveball. If they could put up that countdown clock there, thats the most visual reason that we have about why the fed didnt taper. Is the idea were counting down to some form of a new financial armageddon and what the fed is saying, until that countdown clock is not put up or theres no real issue on the table theyre going to have a hard time reducing the stimulus to the economy because theyre very much afraid about the effects this could have on the overall economy. All right. Steve, thank you. Look forward to bill dudleys interview. Thanks. All right. The market doesnt have enough to worry about of course. Yes, it does. It has an awful lot to worry about, given the confusion about the feds, confusion about the shutdown, add the comment from Warren Buffett on cnbc about the markets. The lower Interest Rates are, the more assets are worth basically and to the extent that qe 3 is keeping Interest Rates lower than they would otherwise it probably keeps asset Prices Higher than there were otherwise. If there are other variables. Maybe because business is a lot better. Theres more than one variable. Really dozens. But Interest Rates are terribly important variable in the valation of assets. When you look around are there still deals you can see, like the deal with brian, with bank of america . Do you still see good positions or have stocks just moved too far is it. Theyve moved a long way. They were very cheap five years ago and ridiculously cheap and thats been corrected. Theyre probably more or less fairly priced. We dont find bargains around but we dont think things are way overvalued either. Were having a hard time finding things to buy. Billionaire investor carl icahn thinks the market is fairly or fully valued. Are they right . Should investors sell now or are there bargains still out there . We welcome back andrew slimman with Morgan Stanley which has more than 2 billion in assets under management. You just made the point that something that Warren Buffett said. A distinct difference between fairly valued and fully valued. Think about the fact that over the last 100 years the markets return about 9 to 11 on average, an average valuation would you take fairly valued, 9 to 11 , i bet you probably would. Thats what hes saying. Not undervalued the way in 09, five straight years of the market going up but not bad. Its not bad. Do you think short term that this market is a little bit overbought . The market is up 5. 5 or was through yesterday. In september its ripe for bad news. No better time for washington, d. C. , to create a little instability. I think well get another push up in the Fourth Quarter because basically the fed has stepped away and allows pes to continue to float high. Youre more worried about q1 of the new year, why . Because ultimately when the fed starts to change policy, it puts a ceiling on pe multiples. And weve had two key points of expansion this year and i bet well get another one before the end of the year. Thats when its hard to have the multiple expand after that if the fed is changing policy. I think that this year will continue to move up. Next year might not be such a great year because tug of war difference between tapering and tightening though. Yes. But the bond market is pricing at the same way. Look what happened to the bond market. The bond market priced it as if were going to tightening. You a classic tug of war at this point where better Economic Data is offset by fed becoming less accommodative. What are you buying . You still like japan. Yesp wi. Even more so. More than last month . Yes. I see the policies being put forth. It reminds me of Ronald Reagan in the 80s which was economy in malaise, unemployment not great. And yet, you have a leader thats stepping in saying yes, we have a debt problem and got to raise taxes but were going to offset that with lower corporate taxes that are going to be inducing people or corporations to higher people and grow wages and smaller government. It reminds me of the early 80s in the United States. Mr. Aby has been successful so far. You like yahoo . The new ceo is much loved for the changes shes making. Why do you like the company . I think you also, you know, your previous guest talked 24 of the companys value is in this ipo about to come. When you strip that out the stock is very cheap on a core u. S. Operating business. And whats more important, Growth Stocks is where you want to be invested. Technology has lagged the market over the last few years and because people have chased dividend yields. Weve talked about that in the past. We have. And you know whats happened to that. That hasnt worked so well. Were starting to see growth pick up and before its all said and done people will chase Growth Stocks and hightech stocks like they did a decade ago and well have bigger multiples and why yahoo is sitting there, like some of the health care and Consumer Discretionary. Andrew, always good to see you. Thanks for coming back this month. Ty, down to you. All right. Sue, for just a brief moment here, before we turn it back up there, because a bunch of companies have been making their debut on wall street this morning and dominic chu at our flash desk. The ipo chatter is all over the board today. Lets get you the winners first off. Rocket fuel, the stock looks like it has rocket fuel in the tank. Digital Advertising Company that uses Artificial Intelligence technologies soaring today, priced at 29 a share. The stock has pretty much doubled in value. Cyber security company, the same story there, priced at 20 bucks a share and those shares have pretty much doubled in value. Big first day ipo surges like that often raise questions about how good the pricing was. How accurate it was. Did these companies and bankers miss out on raising more money by pricing these ipos too low . Another ipo today that seems a little more ac crazily priced by Market Action is clubcorp, owner and operator of golf and sports clubs up around 4 or 5 after pricing at the low end of their expected range and todays loser comes bind thera puttics. By the way, on rocket fuel and fireeye, if they can finish the day at these levels they would rank in the top five best performing oneday ipo performances this year. So tyler, watch fuel and watch fireeye for those particular stocks and as they approach the closing bell today. What a flurry of activity in the ipo space. Dom, thank you very much. Lets switch to Darden Restaurants going the other way taking a hit, a big one. The operator of olive garden and red lobster post lower sales because of what it says is the uneven economic recovery, higher taxes and intense competition for lower cost meals. Brinker, a rival of darden, also down today by about 3 at 4116. Zillow moving lower at this hour by about 8 . The real estate website falling after short seller sit tron Research Questions its Business Model noting that senior execs have been selling the stock. Zillow already up about 230 this year, sue. Ty, a big day for apple and apple fans. The latest iphone 5 hits the stores today and cnbc has every angle covered. Our john fortt live in palo alto, california. And courteny reagan live at a store in new york. John, first. Sue, the line is still more than 50 deep here in palo alto and this store is already out of a major model. Ill tell you which one after the break. Courtney, whats going on over there in new york . Well, john, you know some of these iphone enthusiasts have been camping out here two weeks and walked away with iphones they didnt to pay for. Ill explain coming up on power lunch. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. It is a big day for apple though the stock is moving lower, its smartphones the 5s and 5c is on sale and the stock at 4790. 96. John forth in palo alto and courtney rag began is at the Flagship Store in new york city. John, you go first. Tyler, the question at this point is, are these phenomenal lines because of constrained demand or because of outside demand or because of tight supply. We have a little of both. No preorders on the iphone 5s since the first one launched and also, i mean, hey, we dont know how many iphones apple has available. I heard the line is still more than 50 deep but theyre out of the 16 gigabyte model. A number are looking for 32 and some 64s. Tim cook was here when this store opened to the delight of the crowd and, you know, a number of apple employees surprised to see him. He was happy about the way things were going. He said europe and asia had already had good openings especially japan. He said its already been a good day, but the real rubber hits the road on monday when we expect to get a tally of those first weekend sales. Then well know whether its supply, demand or theyre just selling a ton of iphones. Tyler . Thank you very much, john. Lets go to Courtney Reagan in new york city. Thats right. An apple Product Launch is like nothing else. Throngs of apple enthusiasts come from all over the place to wait in line, some camp out for weeks and it creates the perfect platform for a new kind of online marketing. Weve seen Trading Companies like buyback world and gisele pepper the lines with branded tshirts, tote bags, hats, even sponsoring the first few people in line to take advantage of the attention from passersby, joggers and media in the nations biggest cities. They basically offered us a deal. We advertise their company, they pay us 800 each or to get whatever phone we want. Jessica and her friend are iphone launch day veterans. In years past they proactively south out sponsorship from gazelle. This year they were approached by buyback world. We get food. We each get a phone. They provided us with tshirts, sweat shirts, sleeping bags. And they told us anything you need, let us know. They have an expense account for us and then we order whatever we want. Reporter so how much is this worth . Well, secellular. Com told us it invaluable. Sue . Thats great story, courtney. Thank you so much. Out west, colorados flooding has triggered at least two oil spills and shut down undreads of natural gas and oil wells. Nbcs joe friar is in longmonth, colorado, with what has been a really awful story. Reporter well, sue, the state is keeping an eye on ten oil spills in all, eight of them are considered quit