All around the world today. Well talk a lot about what the baseline is for sales this weekend in just a moment. People lining up all around the world, trying to get their hands on the new iphone. With enthusiasm translate to investors enthusiasm as well . And were days away from a possible Government Shutdown. President obama already promising to veto the bill. Sales at olive garden and red lobster falling sharply. And Steve Ballmer saying its weird for him to come to work these days. Apples new 5s and 5c going on sale in the central zone now. They went on sale on the east coast about an hour ago. Courtney reagan is tracking all the action. Good morning. Reporter good morning to you, carl. They did go on sale here about an hour ago. In my hand i have the iphone 5s. This is the beautiful gold version. Im gripping it very tightly and i have the iphone 5c. This is the blue one. This line has been growing throughout the morning. Yesterday there were about 30 people in line in the afternoon. The first handful had been here for two weeks. This morning when we got here at about 5 00 in the morning, we would guess there were about 450 in line. It only grew by the hundreds. If youre familiar with this area, the line wrapped down 58th street, back up madison avenue, back around 59th and is trickling on to 5th avenue. Folks are going into the store. The Apple Employees are clapping for them as they go in. It took about ten minutes for the very first person in line to walk out with that prized iphone. Many of the folks are not selling the iphone, theyre keeping one for themselves, buying one for a friend or cousin. There was no preorder for the iphone 5s this time and we have the better camera, the faster processor, the fingerprint sensor. So folks are really, really excited about it. As you can see, the excitement is still growing here. Now theyre on sale in the central time zone as well. Carl . Courtney reagan, thank you so much. Our next guest predicts 6 million new iphones will be sold this weekend. He has a buy rating on apple at a 540 price target. Good to see you again. Thanks, carl. A lot of this that were looking at this morning is clearly optics. What leads you to 6 and what happens if they dont get there . It is optics. Its definitely the longest line weve ever seen. The iphone 4 was very long. The reason we dont put too much faith in trying to translate line numbers finto sales, the 4 was longer lines than the 4. The company has added china to the mix. The Addressable Market is about 2 billion wireless customers where in the past four years its been more around 700 million. You would think that has a huge opportunity. Obviously there was no preorders for the 5s and we dont know what the supply situation is like. Walter, how important are these Opening Weekend figures . You mentioned of course the 4s being more of a success. Did that success build . What happened in the Opening Weekend generally tell you the theme of how well these phones will do . I dont think it does. Again, with the 4s, the first weekend numbers were good, the lines werent that good relative to the growth that you saw of the 4s, which had like 32 million in the december quarter, 30 someodd million for the total phone sales versus the number of phones sold when the 4 was launched. I think its helpful. Its great press for apple to have people waiting in these long lines but its not necessarily demonstrative of how successful the phone will be over the next couple of quarters. The journal this morning reports theyre asking suppliers to increase production of the gold 5s. People are gravitating to some of these new colors. How do you think strategically the company has positioned its supply . Are they intentionally keeping it hard to get to build some of the scenes like were seeing this morning . I think theres always that type of Conspiracy Theory but i think at the end of the day, you want to get as much product into the stores as quickly as possible because there is a compressed product cycle that has occurred. Youve seen a quicker falloff in sales in recent phones compared to past phones. Obvio obviously theyre stacking more countries into the launch. Before three, four months into the cycle you say to people maybe ill just wait for the next phone given how quickly new products come out. I dont think there is that issue. Its difficult to make 6 million phones for delivery in the first weekend that the product is for sale. What about china . I dont think were seeing pictures from there but im curious as to what your read is on that market. We do have video from beijing. Well show that while youre talking. I dont know what youre going to show on the video. There were pictures last night what didnt show lines but i think there was a difference in how they were setting it, whether you had to set up an appointment. We cant get too caught up in the actual pictures. China is a huge opportunity. I think apple lost an opportunity here because i think the growth is going to take off. The phones are too expensive for china mobiles customers, which are obviously prepaid. They will sell a ton of the 5s and 5c. I think theres a bigger opportunity for apple that theyre missing by not having a lower price phone in the market. Tim cook tries to push back on that in business week this week saying were not in the junk business. They go back to old quotes by steve jobs who say mercedes, bmw, their market shares about the market share we have. Is that okay . Is this pricing complaint by investors going to go away by any point . Earnings were down 20 last quarter. I dont know what bmws Earnings Growth is like but at the end of the day, a Management Team is there to represent its shareholders. What they should be doing is trying to maximize growth. You cant necessarily associate junk with low price. Theres an iphone 4 that at full price is 450. Does the company consider the iphone 4 junk at this point . Its saying we dont ever want to hurt our brand by coming out with a product that people will perceive as low end. If they decide to forego the market, i think it hard for them to grow earnings over the longer term. Its a big debate thats not going to go away soon. Well talk more about the supplier later on today. Meantime, the house aiming to pass a measure to keep the government funded through middecember. This despite a veto threat from the white house. John harwood is in our Nations Capital in what could be a big, so symbolic day. Reporter it is. We dont know how this is going to work out the end and how john boehner can lead his troops to extend government funding in the absence of a defunding of obama care. The good news is were starting the process of figuring that out. The vote will come by noon, unless democrats try to gum up the works with procedural tricks. Can you expect that to pass with republican votes today. The senate is going to consider that bill next week. They will not accept the defending of obama care. Theyll seasonnd Something Back the house, if they can pass it. There is the possibility the senate couldnt get 60 votes to pass anything. Youll also have a debate on a separate bill in the house which also has a provision to block obama care to raise the debt limit. Thats the more critical problem in terms of the health of the economy. The house is going to act on that sometime late next week and then the senate will act as well. So were still looking at the likelihood of a Government Shutdown based on current events, but the fact that things are moving legislatively and that is going to provoke discussion between the two sides and with the white house is at least some positive sign, carl. I think timingwise we may get that vote before noon. If so well bring it to you on squawk on the street. In the meantime, two of the most wellnone investments are giving us their take. Speaking with Warren Buffett, he had this to say about market valuation now. They moved a long way. They were very cheap five years ago, ridiculously cheap and thats been corrected. Theyre probably more or less fairly priced now. I mean, i dont think we dont find bargains around, but we dont think things are way overvalued either. Carl icahn weighing in as well. He this had this to say on closing bell. I think right now the market is giving you a false picture. The market tells you youre doing well but i dont think a lot of companies are doing that well. They are taking advantage of very low Interest Rates. So obviously you dont have to be a financial genius to understand if i can borrow at 3 or 4 and buy assets, maybe my own stock thats yielding 9 , 10 , 11 , im going to make a lot of money. Now, if the market is fairly valued or fully valued, what does it all mean for investors now . Joining us, john manly, chief equity strategist and david seburg. Good morning. Good morning. John, is the market fully valued . What does that mean . How do you view valuations here . Thats a great question. I love the way you phrased. I think its at the low end of valuation. Markets are extreme live cheap it matters, when its extremely expensive it matters, when its in the middle, i dont think its the driving force. Are were talking price relative to earnings . Yesterday we were told on a price to sales basis the dow was going to raise 3,000 points from here. Theres no hard rule. Its more of a soft science. The pe is a good measure right now because precisely people are so concerned about future Earnings Growth. Theres no one rule that you say thats the one you apply. Its an art, a soft science. The argument that barrWarren Buffett was making is the super era is ending. You might expect it to turn to more of a headwind from here. How do you see things . Are they right about that . When i listen to warren talk and saying the market is fairly valued here or listen to paul make the same sort of comment, i think that youre looking at from a fundamental perspective, we probably are fairly valued but when you see whats happening with the institutions and how theyre investing, it tells a different story. The accounts have been riding the longs and letting them go. Theyre up about 21 and theyre not making sales. The hedge funds are active. Theyre the ones underperforming, theyre chasing the tape. They got very active in the highbeta names. The mutual funds are sitting back and letting it go. They have the ability to lose or give up 5 should some bad news come out. Worst Case Scenario they buy a put but theyre not making sales. As money comes in, theyre adding to their winners and i can see this playing out. So with the market being lets say fairly valued or starting to price in growth, even in that scenario we could see the market drift higher until the end of the year on very low volume because youre going to have hedge funds chasing performance and the big vanillas sitting back letting it happen. That would be interesting, especially if a Government Shutdown were to happen. Buffett said it doesnt really matter because in his words d. C. Can only act irrationally for a certain length of time. Do those with more than a threemonth time horizon ignore this whole thing . I hope so. Im going to try to ignore it. I think its between a 3 and 7 correction. Getting in and out of the market for 5 to 10 corrections is a really hard thing to do, especially if youre taxable. I dont think its more than that. I think mr. Buffett is saying theyll keep at this until one of them is hurt and then theyll stop and thats not going to kill the market. Thats a 5 to 10 correction. I dont think its worth moving for that. Its interesting that all of this is going on while theres still debate about whats going to happen over at the fed. Among the comments that buffett made yesterday, he said he thinks bernanke should stay on. Do you think thats a view wild live held wildly held in markets here . I absolutely do. The market i think trends higher. The Economic Conditions need to improve. Were starting to see improvements but i think they need to improve. We need to see topline growth improvement. If all that pans out by the end of the year, and like i said, this market is going to drift higher and its going to be light volumes. I think were in a position where we can tape ar and ease o of this. Unless we see improvement in the economy and topline improvement, the fed is going to need to be there. It looks like they will be at least for now. John manley and david seaburg, thank you very much, guys. Coming up, Darden Restaurants missed today. Well dig deeper into their earnings. And a live interview with the head of nyses listings coming up. We have one eye on a lot of fed speak today. Apple lines around the stores and well talk about all of it and more when squawk on the street continues. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. To help you take charge. Seasonal. Doesnt begin to describe it. Running a bike shop has its ups and downs. My cashflow can literally change with the weather. Anything that gives me some breathing room makes a big difference. The plum card from American Express gives your business flexibility. Get 1. 5 discount for paying early, or up to 60 days to pay without interest, or both each month. Im Nelson Gutierrez and im a member of the smarter money. This is what membership is. This is what membership does. Welcome back. As we wait for the opening bell, shares of Darden Restaurants taking a hit, earnings coming in at 53 cents a share, well below street forecasts. The company was hurt by samestore restaurant declines. It says it is identifying areas to make thoughtful and significant spending cuts. It appears the two areas olive garden and red lobster have been looking for them isnt cutting it. 50 million in cost cuts, which is going to include layoffs. For a string of quarters they had been preannounces and missing, preannouncing and missing. The last couple of quarters, it look like they had broken that chain. Theyre calling for more volatility in future results. Unclear what you can expect here or how you mix it into the mosaic of Consumer Spending. Exactly. Which has also had its share of volatility and hardtoread signals, whether its decline in apparel sales, home depot or iphones. Its getting hard for darden to argue its not their own operations. Some might argue look at what qsrs have done, wendys stocks have rocketed. That pretzel i havent tried it. You havent tried it . No, but i love the story, that they can have an 5 sales increase. I havent tried the french fry burger at burger king either. Tear aheyre all doing this,g so innovative. Darden does stick by its yearly guidance. The coo is retiring so the story is clearly not over there. 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Thats why we partnered with hp to build the new nascar fan and media engagement center. Hps Technology Helps us turn millions of tweets, posts and stories into realtime Business Insights that help nascar win with our fans. Do you remember september, love was changing her mind while chasing the clouds away we have a number of ipos pricing up this morning, including club court. But it may be two at the nasdaq that catch investors eyes. Im talking about fire eye and rocket fuel. By the way, great names, guys. Love those names. Rocket fuel, couldnt find a better name for an ipo. On that one, 30 times over subscribed, 20 of the offering was sold to insiders or an insider so thats a positive. As for fire eye, which im hearing may be a double at the open, well see, priced at 29. Well see where that opens excuse me, priced at i believe that was 20. Rocket fuel was 20. You have 65 of the offering going to the top 25 accounts but they distributed about 600 accounts. Well keep an eye on both of those companies. Well talk to the ceo of rocket fuel in a little bit. Very Interesting Company there in the advertising arena. Looking forward to that one. Weve only got about five minutes left before the bell. Lets bring in our director of floor operations over the ubs. Good morning. Good morning. I cant believe david is talking about ipos that are 30, 35 times oversubscribed. When is the last time weve seen that . As david pointed out in the past, this has been a pretty good year for the ipos. I think things are starting to catch fire again. Twitter as back drop has everybody interested. If you have anything that even hints at being social network and otherwise, i wont say were back quite to dotcom but were beginning to bubble up. When you see a double, it does put you in mind of that time frame. Look at noodles. We have seen some successful ipos. Do you think this is rational, though . Are people just trying to chase here paubecause they dont see other great prospects . You cant make money on Interest Rates. Pension funds and others are desperately behind. I dont know they would be the kind of people that would step into this ipo. I do think youre beginning to see some chasing of return and its getting aggressive. You say to watch for volatility today. We got some expirations and we got additions and deletions to the close yesterday. The close should be very exciting and