Premature tightening and the fed needs to guard against getting back into the zero or lower bound once it were to lift off. He says the fed should not repeat mistakes. Once the said does lift off, evans saying the path of increases should be kept, quote, shallow for some time. Even says the fed could allow, quote, modest overshooting of inflation, letting the inflation rate run above that two percent target for some time. Inflation breakout, he says, is not likely in todays economic environment in part because theres a good deal of slack that remains in the labor market and he sees that in wage growth being modest and in the number of involuntary parttime workers who had says keep a lid on wage growth. Charles evans, a dove sounding little more dovish in the last several days while the hawks, tyler, sound a little more hawkish. Back to you. Steve, ill take it. Before we bring in bob to talk about this, heres a check on the market reaction. We gained a little bit on those remarks, not a lot but now were up 94 points. We were up 89 before the headlines. The s p 500 is up just under nine points, the nasdaq up 27 and the russell 2000 is in the green by about five points. The tenyear note, the yield right now is at 2. 54 . The transportation average is up 28 appointments. The commodities markets getting hid hard today, down 4 on gold and crude down about 70 cents. It seems we gained a little on those comments. As you heard, charles evans, a well known dove and he didnt disappoint. Moved up about two points. Everything he said in line with dovish tendencies in the past, inflation breakout not likely. The rate of increases should be shallow for some time. The biggest risk is premature tightening and he brings out 1937 when the Federal Reserve raised rates because the economy slipped back again. Theres the tenyear. Not a lot of move. We were 254 prior to mr. Evans comments. Still at 2. 54. Let me show you a couple of market things. The ipo today, citizenss financial is priced at 2150 and opened at 2150. Also were seeing oil stocks, again, notably weak today. A twoyear low. Back to you. Bob, thank you very much. Well check in with you again in a little bit. Bob mentioned citizens. Its not the ipo today. Dominic chu is at the flash desk. Discount food retailer smart and final stores is holding off after surging as much as 11 percent this morning. Med lef management down ten percent almost. Finally, this is the standout. Cyber arc software is soaring nearly 50 as investors look for a piece of that hot business. Tune in today to the closing bell 3 00 p. M. Eastern time when the cast of the closing bell will interview the ceo of cyber arc. Again, closing bell today. Back to you, sue. Dom, thank you very much. Breaking news in the bond market, the fiveyear note went off the board. Rick is tracking the action. How did we do . This is a cminus. I probably should have given it a dplus. We need to leave a lot of room for auction that may get messier down the road. This was somewhat messy. 35 billion fiveyear notes in the hands of new ownership as of about four minutes ago. The yield 1. 80. The bid side of the one issued market, 1. 795. Tald off a bit. The bid to cover at 2. 56 well below the action average and the lowest bid to cover since december of 2013. If you go to directs at 8. 8, thats the softest on that area since july of 2013. A c minus what leaves the last of the supply to come tomorrow in the morning of sevenyear notes. Yesterday an a. Thats why you need to watch. Apple, samsung, now blackberry unveiling a new smartphone. The big question for investors in the latter company, will it help revive the struggling hand set maker. It is taking a build risk with the design. The new phone is called the passport and is the shape of a pass passport. Will it save the company . Go to cnbc and vote and tell us where you vote. Hi, john. Ive g reporter ive got it here the passport. They are almost exactly the same size. Ill put my vote in now. No, this phone is not going to save blackberry and theyre not even trying to say it will. The company is sticking its future on secure software. This sort of acts as a salesman for that. You can see theres a touch screen here. Theres also this keyboard and the keyboard is touch sensitive and affects the screen. The key feature in this phone perhaps, a couple of them, one, the has the Amazon App Store on it so any app that you can download on the androidbased kindles and fire phones also will download onto this phone so it runs blackberry 10 apps as well as android 4. 4 but a blackberry key feature is called blackberry blend and allows the phone to be accessed through a p. C. Or tablet, even on ios. Blackberry is pushing an app that will allow you to deal with messenger, the contexts, the pictures, the calendar items on this phone. Its an interesting play. Its secure in the sense that those things dont live on the cloud but the device and you can access them through the internet. Stay where you are. Were going to lock in the vote. Will it help save the company. 49 say yes. 51 are with you, john and they say no. Were following the iphone 6 having a bending problem. Users claiming the phone easily bends after being in their front pockets. Dawn covers mobile devices and joins us now. Dawn and john, welcome back. Dawn, these reports started to come out that people are putting the phone in their front pockets and were finding that the phones were bending . Yeah. Some of the reports began cropping up on these apple enthusiast sites. There was one account of a guy who claims he had his iphone 6 plus in his front pocket, droif four hours to a wedding, danced all night, came home and the device was warped. So one enterprising reviewer decided to see if he could bend the device with his bare hands. So he went and took an iphone 6 plus and applied some serious pressure to it. You can see his handshaking as hes doing the test. He did succeed in bending it. Beyond these anecdotal accounts, we have no idea how widespread of a problem this is. Has the company commented . No, the company isnt anything anything on the record. If the customer does happen to have a problem and they call support, theyll hear that this sort of damage if it occurred in normal use, not putting it in vice grips, that it would be eligible for replacement under the warranty. Apple hasnt said that but thats what Customer Support is telling individual customers when they call. John, do you have any reaction to this . Who is going to try to bend a phone intentionally, particularly a brand new one that youve just paid good money for. But on the other hand if you sit on the phone in a confined space and it gets warm and bends, that could be a problem. Reporter let me address the technical aspect. I got an email from an expert in displays and was talking about the longterm damage effects if a phone bends a little bit. He says for moderate bending from a slight bend in a pocket, its something not an issue because the phone will retain its overall shape and the display will be fine. However, if its bent extremely or over a period of time, it could damage the display in this case. What i think is the bottom line is that the use case for the iphone 6 plus is a little bit different from your typical smartphone. This is maybe a little more like a tablet. Its not quite as portable. You can tell that if you pick it up and hold it. Some people often with larger hands say, hey, this is absolutely perfect. I love it. Some others say, boy, this is unwieldy, too big. You have to be careful how you carry this phone because it is longer and based on an Aluminum Structure which will bend and potentially retain that shape. We appreciate you being with us. Sue . Were up better than 90 points. Stocks rebounding today. The dow attempting to hold a threesession losing streak and up about 90 points on the trading session. Do we move higher longer term. Scott collier is ceo of Advisors Asset Management and mark is president of Intrepid Capital funds. You think longer term conditions in the u. S. Are favorable to higher prices but youre seeing signs out there that we might be in for a correction . Tell me about that. I do. I think that weve had some divergences recently. We see the russell 2000 really people talking about a death cross where those prices really are kind of rolled over. We also see margin lending. It was capped and began to decline in january. And then finally weve seen high yield diverge from the s p and those tend to be highly correlated with equity prices. We would expect a little softness but in the longer term we think this bull market is still very alive. Mark, longer term you like the market as well, correct . Well, scott is singing my song. If you look at the russell 2,000, its all five percent. The last couple of days theyve thumped it pretty good, probably a point and a half down. High yield, you had outflows and high yield bonds in july and they are coming back out in september and those are precursors to what could happen to the s p. Weve been through a benign period in the last three years, no volatility. Were five and a half years from the bottom of march of 2009. Things are long in the tooth and prices in general are pretty high. I think that caution is warranted and thats the way we look at it. Are you putting protection in of any sort, and where are you putting capital to work where you still find value for your shareholders . Thats a great question. Were not using derivatives to hedge. If we cant find an absolute valuation discount, well resort to cash, both the equity and debt markets. Three names that i think offer a discount to full value at this point are a firm run by howard marts, distress debt investor, oak tree capital, really interesting business. Theyve got 35 billion in incentive oriented partnerships. Theyre largely over their hurdle rate of 8 percent where they earn incentive fees. A lot is passed through shareholders. So its a high but irregular dividend and they also help fund double line capital which is on their books. Mark, where will you put money to work today . Scott . Im sorry, scott. Thats okay. We would be putting money to work in emerging markets. We think specifically some of the brazilian names and potentially in china, we see value there. We are not using derivatives as protection. We would be in cash the same way for protection. Were always invested. Its kind of like a restat whether were fully invested or less than 100 . Right now we are seeing value in emerging markets, specifically in brazilian names, energy and miners and producers. Thank you. Appreciate the conversation. Ty . The f35 aircraft, most expensive military program in u. S. History, now a warning that the sky high cost may be unrealistic. More even than predicted. Shares of lock heed which makes the f35 right now up a buck 75 at 17806. You can see yeartodate up 20 . That as the republic of south korea has final liesed the deal of 40 jets for delivery in 2018. 20 gains for lock heed so far. Jane wells covers defense for us from l. A. The f35 is the most expensive ever, perhaps topping a trillion dollars over the next half century so the pressure is on to bring down costs. The Defense Department says its got a plan. But the Government Accountability offense says the plans estimates could be way off target. The gao says the pentagon, quote, has not fully addressed several issues that have an effect on affordability, adding that cost savings do not include things like reasonable assumptions about how much fuel will be consumed and the cost of replacement, saying real costs could be billions higher. Forget the cost of buying the actual jet. Gae says sustainment is about 70 of a cost of a total program and that even officials inside the pentagon say the current strategy, quote, is not affordable. Maintaining the fleet at full strength will cost significantly more than the current combined costs of maintaining all f15s, 16s and 18s. The pentagon tells cnbc, this is a 56year program, still barely out of infancy and a lot of being learned. Quote, many of the assumptions made by gao in extrapolating costs over the life of the f35 program did not reflect ongoing process improvements or fail to account for learning and feedback that will improve efficiency and its launched several cost saving initiatives including using existing supportive services. South korea formally announcing its buying f35s. This makes them the third foreign country behind japan and israel to purchase the jet. Thank you. New data about home sales and mortgages, the real read on housing right now. Plus looking for opportunities to make money in this market. We wi Morgan Brennan knows where to look. Financial sector has enjoyed a rally this month but theres one group of stocks that has lagged. Can you guess which one . Analysts say it could present buying opportunities. Were going to have those names and all that information after the break when power lunch returns. While every business is unique, everyone is looking for ways to cut expenses. And thats where pg es Online BusinessEnergy Checkup tool can really help. You can use it to track your Actual Energy use. Find rebates that make equipment upgrades more affordable. Even develop a Customized Energy plan for your company. Think of it as a way to take more control over your operating costs. And yet another Energy Saving opportunity from pg e. Find new ways to save energy and money with pg es Business Energy checkup. Showed you video of a man running barefoot from court . Michael lucarelli did return, pleading guilty to charges related to insider trading. In an emotional moment with the judge he admitted that he had a drug problem and could not recall which company he was trading while he was on drugs. He exited court in a much different fashion today. His shoes were on. His lawyer saying, quote, a very decent man made a bad mistake for which he took responsibility this morning. Dominic chu, news alert. Tyler, from one courtroom to another, those familiar with Reality Television probably know the name michael, the situation, sorenntino. They are expected to appear in federal court this afternoon to face indictments alleging they did not properly pay taxes on nearly 9 million worth of income. This according to u. S. Attorney paul fichman. Again, mark and michael are charged with counts ranging from conspiracy to defraud the United States, falsely filing tax returns. They face counts for failing to file a tax return, period, for the year of 2011. Again, just to put this in context for the time and the penalties that could be at stake here, the conspiracy and false filing tax return counts each carry a maximum of three years in prison and 250,000 in fines. The count charging michael sorention carries a maximum of one year in prison and 100,000 in terms of fines. An Interesting Development for a celebrity in the reality tv world, michael, the situation and his brother mark facing charges for allegedly falsifying tax returns on nearly 9 million of income. Back to you. Well be following that one. Thank you very much. To the health and housing right now. New home sales surged to their highest level since 2008. Diana is here to put it in context for us. It was a big number, no question, and it was a good number. The analysts are poking holes in it already. This new home sales number is based on signed contracts in august, not closings. It has a huge margin of error and is often revised. You also have to put it in context. Take a look if you will. August sales up 18 from july, up 33 from a year ago. Were at a 504,000 analyzed pace. Here comes the but. We are pay below the 1. 2 million unit pace for the peek. New home sales are up just two percent yeartodate from the end of 2013. You can see that Home Builders didnt react with quite the euphoria you might expect. Thats because kb home missed by a lot in Third Quarter earnings. We saw Weekly Mortgage applications fall again and running 30 below historical norms. New home sales, its a good number, which most expect will be revised. Financials losing ground over the past week but theyve been rallying over the past month or so. Theres one group though within the financials lagging this year. Many analysts say its a buying opportunity. Morgan brennan joins us breaking done the sectors. Theres one group of stocks that has lagged that recent rally and thats the insurers. While financials are up about half a percent this month, Insurance Companies are down almost one percent as this grouping enters what analysts call a more volatile period marked by softer pricing and more regulations. Analysts also say that Rising Interest Rates will help these Companies Earnings next year and beyond because they like to invest in longterm assets. Some of the biggest laggers could have some of the biggest gains. Lets take a look. Gen worth financial, the industrys worst performer is down about 15 so far this year. Its mortgage Insurance Business was hit hard in the housing crises. On average, Analysts Expect that this stock could rise 34 over the next 12 to 18 months. Checking out another one, aflac, that is down 13 yeartodate. Thats thanks partly to its Japanese Business where the weakening yen and consumption tax hike have weighed on it but Analysts Expect an 18 increase in that stocks price. Another one, prudential financial, thats down about one percent so far this year, pressured as well in part by its japanese operations. Analysts again are expecting a 13 plus increase in that stock price over the next year to 18 months. Finally, check out travelers. Analysts predict only about three percent gain for travelers, but guggenheim says investors should keep an eye on the pace at which book value grows. Thats r. O. E. Thats the best way to value Insurance Companies and travelers has one of the highest. Lastly, as rates begin to rise vince lu says keep on eye on the yield curve because a steeper yield curve will have positive affects on earnings moving forward. Thank you very much. Dominic chu joins us with a market flash. How about financials to technology. Heres a stock ive been getting a lot of tweets about recently, especially today. Look