Markets typically respond to rate hikes and whether this time will be any different. Obviously weve heard how the playbook usually goes in this time. Look, the fest rate hike usually is absorbed okay by the stock market. Theres that old saying, you know, three steps and a stumble or three jumps and a stumble. I have been focussing on the fact that in general were farther along in economic and the market cycles than we typically are when we get to the first rate hike like so many others things. This element of this cycle is different. You have Profit Margins that have already been higher and profits have been falling for companies. Obviously stocks are somewhat more expensive. Were actually down a couple of . I hi a lot of this kind of fouls the picture a little bit in terms of whether history can be a decent guide as to how the markets deal with this. You make the point that unless some if no immediate rupture occurs, posthike, you might see some buyers come in and you decide the water is fine. Thats a shortterm play here. I do think that some unenable percentage of people have been saying, wow, i really just dont know if we can handle this, and if, in fact, you do get that expected hike right now and maybe if the language is somewhat as expected and not really too alarmist about future rate hikes, yeah, it seems to me that the path of least resistance might be higher, but i have to say its been amazing to me the last few days how the markets have gotten themselves into a remarkably neutral state heading into this announcement. We lossed last year at 2058 or 2059. We could be right around there when this deal comes. We were oversold tuesday, and we had the rally. The market is basically saying jump ball come 2 00. What does it say about where we are in the market, mike, that were not only having the conversation about the fed hiking today, but the conversation is about when in the future we will get back to zero. Is it two or three and what is the feds path . Is it one and done . Is it one and wait . Do we get three jump brz we stumble . All very good questions to. To me people are dialing ahead a little too far to say when do we get back to zero. Lets see how this path develops from here. I think that a couple of additional complicating factors are that i believe that fed policy makers would be kind of dovish in their language in their approach right now. Whether they intended to be slow or not next year, they want to get this one out of the way. They dont want to alarm the markets, and so even if they kind of hope and intend that the data will be there for them to be able to more aggressive next year, theyre not going play that hand right now. The other element is if you remember, the fed was unusually predictable in the last tightening cycle from 2004 to 2006. Every single meeting a quarter point. They have explicitly said they dont want to be that predictable this time around, so theyre basically telling you, look, were not going to lay it out for you in any great detail. In terms of 2 00 today when were walking into the exhang today, i said to one of the traders, well, its big, isnt it . He said, john, the only thing thats big is four guys in the kitchen baking the cake. Like, for the market its going to go crazy at 2 00. I dont know how it goes crazy at 2 00 because Everybody Knows its going to be 25 basis points. I dont say its going to be crazy. I do think that there is still i dont think theres awe lot of mystery about what is actually going to be decided. If we get a surprise, it will be its just almost the novelty factor of it and how things get price from there. I think the market will do after this meeting probably what it was going to be do the last couple of weeks in the year no matter what. You know the whole thing. The first move is often the wrong move. You get a lot of head fakes and a lot of people sitting in reserve not doing anything until this thing is out of the way. Thats why i think it could be some sparks no less. Yeah. Its definitely the absorption of a lot of information in a compressed perd period of time. Were going to see you for the next few hours and then some. Be sure to stay with us for our special coverage of the decision. Leon cooperman, jeff gundlak and jim gross. Jim grant and some others. Thats all coming up on cnbc. Up next, another day, another bearish note on apple. This time its credit suisse. They say a supply chain problem persists. Thats enough to take apples target price from 155 down to 150. Apple, you may know by now, down 5 in the last five days. I like the bear note, john, because they say we take supply chain estimates with a heft where i grain of salt, but then they say our Semiconductor Team suggesting 20 cut in procurement. Yeah. The question is how is apple managing its inventory based on we know that the woshgs weeks of inventory that theyre keeping crept up, but they hadnt last year, but they hadnt actually reached that amount of inventory in stock. I think all of the supply chain stock as weve often said on squawk alley, you do have to take with a shaker of salt. Not just a grain. The two issues are one is the stock action overdone . This is still not an expensive stock. Even if iphones dont grow in 2016, apple, where he, has to Just Transition to a world beyond the smartphone. I dont think its clear to anybody what that is. I mean, over the top tv not leerl defined aside from the content part. Smart home doesnt seem to be working. Wauchlz a watches are out there, but not that exciting. What hits . Not just for apple, but for everybody. Its not a cheap stock. Its being used as a piggy bank traditionally in the market when people either want to take some profits or invest in Something Else. Maybe thats even cash. Because there are no near term catalysts until we do get earnings next quarter, what do you make of it . I think it is a cheap stock. Its 11 times forward year earnings. To me the big concern going into this year is the bear is a cut from 2 from 243 million to 234 Million Units. To me the projections are so far ranging for where it will come in, we will have a very volatile 2016. Financial year 2016 for apple. 2017 both notes are fairly consistent that with the new iphone youll see a return to growth 7 , 8 growth. If the next were is going to be rough and tumble i think for apple. Thats the crux of it, john. Were all obsessed about the march quarter. Oh, my gosh. What if it decelerates. They think by this time they this d also, theres a 20 million unit disparity between these. I mean, you think about that for almost any other company, look at microsoft. 20 Million Units would be a great year. Yeah. Thats the disparity in this apple they dont know how many of these apples will sell, and honestly, apple cant know either because a lot of it depends on how the Chinese Markets are going to shake out. There are a lot of things that go into this. I think, you know, investors, apple watchers, need to take the longer view and think is apple figuring out the subscription model both for services, content, and for phones themselves and think about how much revenue per unit is apple going to get and how well are they going to be able to build that path to the future. Sn. The watch did 1. 7 billion for the last financial year. The other category which is basically watches and apple tv will go from 10 billion to 14 billion in the next year. I think its possible that youll see calls to break up apple. That its basically too big its too big. Come on. You have a 10 billion or 14 billion le new line business. You have a 1. 7 billion watch business that john is calling a failure. There are the high multiple businesses trapped inside of apple. Its i said i didnt say its a failure. I said its not the kind of hit that a lot of people its not an iphone scale hit. The reason why its crazy is because the way apple operates, you cant break it up. You have one design team designing all of this stuff. Youve got one os team and Software Team thats building ramps. You cant just peel off a couple of these products and say, hey, theyre a whole different company. The company just doesnt work that way. Its obviously never happening. I said that you could see calls for it, and it would make sense, and i dont think its being fairly valued. I think these double digit billion dollar businesses that they have, people are calling losers. Donald trump should call for that. Along with closing up the internet and i know. Well,ly make a bet that sometime in the next two years some activist Hedge Fund Says they need to do this. Activist hedge funds. I didnt say it will be happening. I said youll see calls for it. You win that one. Internet privacy, security concerns continue to be a political football for the campaigns. The focus of the debate last night and news out of germany that facebook, google, and twitter have all agreed to delete hate speech from their sites within 24 hours. Heres trump from last nights debate. We should be using our brilliant people, our most Brilliant Minds to figure a way that isis can not use the internet and then on second we should be able to penetrate the internet and find out exactly where isis is and everything about isis, and we can do that if we use our good people. We should be able to penetrate the internet. How much of this is engineeringwise possible . Its not engineeringwise possible. We could create our own chinastyle version of the internet thats closed off and where you can detect what everybody is doing, but isis is probably not going to use that version of the internet. I think this shows theres a gap in the politicians understanding of how the most basic technology that were using works. I think the American People should be concerned about that. I think we need to engage more. Sell convalley needs to engage more in Public Policy and explanation about what it is that were doing here. Thats frightening language to me. That was exactly the point that Carly Fiorina tried to make and leverage her experience as an executive running a technology company. She said all you really have to do is ask Silicon Valley for their assistance in doing this. It cant be that easy. Well, there has to be, to jobs point, to Donald Trumps comments a week ago where he is going to call up bill gates and get him to do this internet fix. Bill gates hasnt touched a computer in 20 years. If thats who donald trump thinks is he going to call up is scary. I think with technology being a fundamental part of our safety and growth in our economy, its a real issue we have a bunch of candidates that dont know anything about this. Carly fee or even wra is the best informed probably, but donald trump isnt well informed on internet right now. Bill gates is back at work for a significant percentage of his time that he was called up and asked his good people to come back and help. I think donald trump is thinking about windows 95 bill gates, not like nodella bill gates. People are loving your prediction, by the way. I prefaced it with being crazy. You dwemt bring the crazy. Were going to have selfdriving cars in two years. Apple having to spin out the other line is not that crazy. Maybe theyll spin out their selfdriving car. Absolutely. Absolutely, john. Daily mail north america. When we come back, after a break, Walt Mossberg on, as he puts it, the top feature that our digital devices need but will not get any time soon. Another analyst lowers their target the outlook on apple. Theyll join us later on that. Of course, more on the fed. What could be an historic announcement and News Conference today . Full coverage begins 2 00 p. M. Eastern time on cnbc, lug an st. Louis with bill gross of janus. Another day to watch vrx. Heres a look at stocks up better than 8 even though they cut their outlook for 15, warrant for 16. Journal has some stories about its books and how different they are from rivals, but brx enjoying a bit of a bounce today. Up 25 in the last week. Well continue to watch it. Meanwhile, your iphone gopro or laptop, many of the Electronic Devices weve come to depend on have at least one thing in common, and it isnt good. They all depend on batteries, which as Walt Mossberg writes has become the weak link in the system. Here to explain is Walt Mossberg, executive editor at the verge, editor at large at re code. Said this isnt an investment column, but if anyone can produce a top of the line battery, buy the stock. Why . Because its the weak link in technology. Its jonathan ehs pain point for everyone who uses a smartphone, a tablet, a go pro, whatever it is. It has potential to hold back the next wave of its more power over an extended period of time. Is its been a very long time since weve had a truly fundamental improvement in the battery, kayla. 1991, actually. Whats the measure of a good battery . A smartphone that lasts all day . How would you view as quality battery . What are the attributes . Right now given the constraints, the smartphone that lasts all day or a laptop that lasts all day is youre right is for reviewers like me we look for that. Sometimes if its a wearable, you can find ones that will last a couple of days. There are a few phones that have giant batteries that bulge out of the back that are specifically sold for this and those last a little longer. I want my phone to basically last so long that its not on my mind. I want it to last a week, and, you know, in the column i wrote just wrote that, you know, apple put up some numbers last year when they brought out the 2014 iteration of their phone processor that they had increased performance by 50 x, but if you go back to the beginning of the iphone, they havent improved battery life by even 2x. This is a chemistry and physics problem, and its extremely tough. Im talking about, say, electric vehicles, right . Certainly right. A Battery Technology there has gotten better. It has in other spaces. What is it if a phone battery thats so tough . It hasnt gotten better in electric cars. Its gotern better in the same sense that theyve gotten in phones. Its the same battery in a tesla as in an iphone. There are some small chemical differences, and there are thousands of them in a tesla versus the cells versus, you know whatever is in an iphone. Its not a fundamentally new all type of battery. Its a lithium ion battery at the moment. Someday it will be Something Else that can do much better. Walt, its john. When i look at this, isnt it a fundamental issue of tradeoffs. If they were still making a phone that was as powerful as a couple of years ago and they chose to focus on battery life instead if they were using the Screen Technology and decided focus on battery life instead, we would be getting days of life out of these phones, right . Some of the phones in india that micromax is making have much longer battery life than we get here, but one way or another, the major phone makers have decided we want brighter screens, higher resolution, lighter phones. Not the battery life. Is it just us making that choiz in the traysoff . You know, i think youre absolutely right. Its all a tradeoff. Much of the improvement weve seen in battery life or at least the stability, the fact that you that each year the devices get better, and the battery life stays about the same, that has to do way lot of engineering around the battery. What im complaining about is i dont see why we cant have both someday if somebody can invent a better battery, and going back to cars, john, i think cars and stationery batteries for Renewable Energy give another big boost to the incentive to invent a new battery. Im not snapping my fingers and saying please invent a new battery tomorrow because its really hard. Were getting to the point where we need somebody to come up with a dramatically new battery. Well, you essential laid out the challenge today, walt. Well see which tech company picks it up. Walt mossberg from the verge and from re code. Our thanks to you. Coming up, a new development on Cyber Security legislation and what it means for Corporate America. Plus, just a few minutes until the close of trading in europe. Just about nine minutes, as a matter of fact. Well have that and much more coming up in squawk alley. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. A huge bunl and tax deal coming together overnight. The massive wreeld includes a surprising victory for corporate ameri america. They basically tucked an entire bill inside the bill, and it wasnt until about 2 00 m last night that people who were watching this closely knew it was inside there. Its the Cyber Security act that passed both the house and Senate Earlier this year. They merge those two bills together, put that as one bill, and put it inside this massive omnibus spending bill. Its a win for Corporate America and any company that has large amounts of data and wants to share that data with other companies and with the federal government. Heres whats in this provision. Starting with Liability Protections for companies that share intel with each other. They will not be subject to lawsuits for doing that or for sharing it with the federal government. It also insures that companies remove sensitive personal detail from the data before they share it with the federal government is then its skrupd again. All that about trying to protect personal privacy. Then finally, it establishes the department of Homeland Security as a portal for sharing info between the private sector and the federal government. A lot of that is being done already, but what advocates of this legislation say will happen now i