Transcripts For CNBC Squawk On The Street 20131022

Fewer jobs, obviously, in that number. Expected an addin in september. Well break down all the numbers for you. Streaming to alltime highs. Netflix shares poised to open at a record high after blowing through Third Quarter expectations but even Ceo Reed Hastings voices a few words of caution about the stock price. Cramer that will run through the stocks that are key to your portfolio. And a new battle in the tablet wars. Meanwhile nokia launching a new tablet and apple releaseding surface two. Terrific. The september job numbers have been repleased, thats below forecast but august job gains were revised higher. Unemployment was low wheel the labor rate Participation Rate did remain unchanged the quarterly average, 103, 207 before that, 2 9 before that. Private sector is putting on the brakes. Interest rate back to 2. 05. Thats really amazing. The big spikes, 2. 8, 2. 9, that turned out to be a became. Interest rates are back to where maybe housing gets reignited. Im not sure. How does that pertains to the jobs number . It not working. I think there were people today who were saying this didnt include the government shuft down. The worry over the government is with us every singlement. The worry about Health Care Costs is with us every nt . Every type you bring on a ceo, they all say do you know what a great time this would be if it werent for washington . At cnbc were talking about the idea that washington ought to get its act together. I think these numbers directly reflect our politicians. I think it dangerous to hire and expand in this part of the country, not overseas. Are if we want to look at the quarters that were magnificent and there were many, exwith the exception of whirlpool, the International Companies are saying if it werent for europe, i dont know what wed do. Thats one of the strangest statements youve said in a long time. Because these companies have fired and fired and cut back and cut back in europe and now suddenly europes coming bam europe has ban very big sweng raf hj. Doesnt seem like people are rahal hired. Kelly evans is on the show early today to walk us through some of the internals. Consistent with the theme thats played out, unemployment at a fouryear, fiveyear low but at the same time the payroll growth isnt at that late. A lot of people would prefer where were maining 200,000 jobs a month, even if it meant the Unemployment Rate wasnt coming as quickly. Bernanke and i believe yellen talk about looking at a wider range of indicators. Even if you just take the headline, its clear there is a weakening trend in place. Eight private sector payroll number in particular just to pull that one out. We talked about the deceleration overall but september surprisingly tfs jobs added it at the government level. Private payrolls only add 12,000 since july. Thats not the number they wanted to see. And the euro goes to a high. I hope people dont say lets get some euro bonds. When you act the way we did, the question is whether you can still be the premiere currency. I believe the tick data is out today on yu how the demand is changing. I mean, germanys going to have a nation nt good for a lot of companies that are going to support to the upstate. Every company thattes orts if it werent for currency, what happened what happens if turnery goes oat way ma maybe fit with this overall theme emerming, it was mcdonald saying 1 a wing is too much for this economy. It other retailers and restaurants coming out and talking it north america thats among their toughest market right now. Theyre seeing a little bit emerging trend the markets now. Here im thinking of a hasboro, if it hadnt been mcdonalds, if it hadnt been for europe, the quarter would have been worse than what it was. The hasboro was good. The mcdonalds call was poignant. They did that giant wings things and they did admit it was below planning. Look, the stock bare live went down because everyone knows it a agreed worldwide companies. But there are initiatives that eem seem to think that the coon upp upper that one can buy the coffee drinks and the other cant even afford to buy meals. Have to be a little about the worried there. You need some prefefds doing well. Follow those. Lets move on to shares of one stock that is doing well in the u. S. And everywhere else. Netflix poised in the free market and poised to open up high. It had an upbeat severity markers, during a postearning. Every time i read a story about net floks is it were me because it was a the exact headline we used to see in 2003. You can definitely we have a sense of momentum investors driving the stock price more than we might normally. Theres not a lot we can do about it. It is reminiscent in some way of amazon, i guess is the comparison that comes to mind in the sense of increasing their reach dramatically and being judged on that ability, not necessarily on their ability to deliver enormous bottom line numbers. Also softening numbers and get your pay day later on, right . Amazon, not the statement by Reed Hastings is basically buy to hold. You know what you do . I mean, i guess hes looked at this chart and realizes its a cup and handle or maybe its a w. He should issue 50 million shares and pay all that high cost debt and then really do have a stock that i would feel i dont know its a coal stock. Cant get in the way of solar city, cant get in the tesla orvalu like stocks. Theyre valued by, hey, i like that. Did you know orange and block, they renewed 450 price Surgeon General et did he not Like Arrested Development . Youve got revenues of 27 , you have ebidta at 57 million. Ahead of most analyst expectations. They had 2. 4 million subscribers, that he was above the second quarter, which was 1. 7. They have more now in the u. S. Than hbo, whichs telling. Not around the rld. Not around the world. It was so fineau call himself, he was not trying to be bullish. He spends time on how the brazilians are basically kiting the service. Everyone should listen to the Conference Call. Hes saying, listen,dont get ahead yourself. The analysts, if youre using a 350 price target, you got to take it up. Up got to take your price target up. You also have analysts who say 60 million to 90 million subscribers. Thats what we think it will be in the u. S. I know. I still thought apple should have bought them. Remember i made that comment and if felt on, can youing your depp hers is that we stuff. Sorry. Sorry. Im holding on now. But there were a lot of companies that should have bought netflix and didnt but carl icahn bought it. And your kids. You go to school and you teach, what do they own . Netflix and tesla. What about Kimberly Clark . What do you think about proctor . Procter gamble . Did you ever do High School Stock contests . Its like, hey, mr. Cramer, im raising my price target of netflix. Shouldnt you be thiing instel and get that dividend . No. Whole s p. For biepio tech, for the travellers is overvalued. Im not saying its overvalued. Im saying theresot cornings. Glen, he came on my show. Its hard to prounce his last time. Im sorry, i didnt mean that. Well talk of a number of names around today. Whirlpool, beats by 1 cents, they say u. S. Demand up 9 rather than the prior 6 to 8. Whats going on . I dont know. I think this is one of those situations wb its piering on all dill sergs theyre done nothing for years and now theyre playing catchup. Home depot has been down because Stanley Works was so bad. It was the security business. I dont know. 139 is probably going to undo all the damage from that report last week that suggested demand would be lowerpart of theby upper is the up 16 . Thats a health and safety and engame company. And this Ellen Coleman clearly slib arely, youre supposed to spit it up. In the meantime, i dont know dont you. This is growthee. Its a costanza theme. I air liens arent suppose. Airlines into history. Priceline got up with a nice start today, trip visor. The pts. Were going to see whether. Good luck. I guess if you get a republican jud judge. Now, i predict whats going to happen is hes guy, hes not streaming. Right . Hes still getting it in the male. Coming up, well tack live with the president and Jason Fuhrman. What impact is his function vietnam take one more look at futures a lot more squawk on the street from post 9 in a moment. Americans take care of business. They always have. They always will. Thats why you take charge of your future. Like theyve helped millions of others. 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And provided by unitedhealthcare Insurance Company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Apple is set to hold its latest event in San Francisco today. People make a lot about the tag line on their invite, which is, quote, we still have a lot to cover. Well are talking about a cover that might have a builtin keyboard, about it being thinner, faster and lighter, jim. I think apple is the opposite of netflix. It sells at 12 times earnings, has an unbelievable Balance Sheets, good di generates more company in america. No, jpmorgan generates a lot of cash for the treasury. Youre seeing a recognition that is too cheap regarding the products. Pogge got a lot of people to buy the enough operating system. I think this is a hot product for christmas. Upi did quite well a couple years ago when they introduced a product. Were getting divorced from the analyst saying wait a minute, i talked to a chance parts maker. The stock has momentum here. Its up 8 since they met with icahn. Dont think that apple isnt aware of it and thinking about him and all of these things are setting up very well for them to make sure they can stiff arm him if they choose to or not have another dialogue with him, up 8 since they met, 150 billion bond offering. Tim cooks got some momentum here, terrific executive coming in from burberry. I say terrific because i think shed be revealing it more online but i think apple has it back here. I aid a that on mad money, i think they got it back. There are more than two ways Tuesday Morning started in just a few minutes. [ male announcer ] united is rolling out global, satellitefed wifi to connect you even 35,000 feet over the ocean. Thats. Wifi friendly. The most Free Research reports, customizable charts, powerful screening tools, and guaranteed 1second trades. 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Time for the mad dash. Theres stock everybody seems to want to buy when it gets hit pause its coach. People think its only a matter of time before they get it together because people know the bags are a terrific brand. Inventories are up, sales down, samestore sales down 6. 8 north america, direct sales decline 1 . This company was presented as a china play. Now china results get in here very strong. It doesnt matter. Once again coach is disappointing. I think this is maybe a failed play. If you want apparel, go with bf corp. There is no reason to go with coach other than the fact you keep betting that something has to happen. Thats not the way to invest. Inventory rising, sales falling, not a good sign. When you see that, you know the markdowns are coming. I dont know if they are have and thats reflected in this quarter or the Holiday Season may not be that well. They had this great shoe initiative. They do . Yeah, nice high heels, good flats im hearing the music. Go cleavage. Coming up, were going to talk live with Jason Fuhrman, the new of economic advisers. Hel join u back. Capital to make it happen . Without the thinking that makes it real . Whats a vision without the expertise to execute it. And the financing to make it grow . Whatever your goal, it can change more than your business. It can change the future. Thats why, at barclays, our ambition is to always realize yours. Youre watching of the wor. In a little bit more than a minute we have a jobs number out, apple and rivals of apple announcing tablet launches bigg week. Youve got this apple haunch. The analysts really soured at the company. I got beleaguered like others because i didnt see the new products. Once you saw this ios system. Have you seen the weather app . Its really kind of cool, you get up and its got how the whole day is going to be. Every day i discover a Little Something i like. Do you think its a bellwether for it overall . Yes. Theres the bell. At the big board, mexican Media Company televisa, celebrating toten shut that off . And over at the energy group. Thats the most enthusiastic bell ringing ive heard in a while. Began early and went late. Must be a festival. Utx, 1. 55, beats by a penny. They raised the low end of their profit forecast. Even though revenue wasnt quite as optimistic. Dave cody on last night, the ceo. United technologies said some things that were soft about defense. They did exactly what honeywell did and these guys didnt. I think youre going to see honey welcome back along with united technologies. Cody delivered a good number. He plays with an open hand. Both of these companies are good. Theyre both going to benefit from nonresidential construction comeback. Now dow component, though, is going to put together more gains than travelers. 235, beats by 28 cents, better underwriting margins, a little bit more to the buyback, jim. Look at thereturned. Three years ago, they had 482 million shares, now they have some would say theyre takinge. Its a private ibo. Cash flow. It goes to the underlying theme, which is shrinking your market cap through significant buybacks and borrowing at historically lows to do it. And they never bought crazy investments and, second, theyre not cheap. As a travelers customer, theyre not cheap. A little better subjective, ive been travelers, chub, travelers, chub. Theres a lot of business they do that they really own the market that people dont realize. They also got out of auto. One of the reasons why auto has been dangerous, by the way. Fatalities are up, theyre going back. We know why that is. Thats texting. Without a doubt. Thats why they have to start putting people in jail. Its a terrible, terrible thing. Incredible how often you can yo revenue misses, raising consortium for radioshack. Buy best buy. Buy game stock. Whirlpool is one of the best on the s p. But gap, coach, tiffany all leading some of the losers today. People are making choices about where they spend their money. They want to buy entertainment, the grand theft auto and the box that takes, best buy and whirlpool and tiffany, that i dont understand. But tiffany does have a big japanese component. Im watching home depot here. A lot of people buzzing home depot is going to get hurt. Its at the epicenter of whats selling. People misunderstand the Stanley Works quarters. Washers and dryers were good. You could build a passtesh or a mosaic that home depot is doing well. Lockheed mart season so cheap. They have anything to do with the crashing of the web site . No. Lockheed martin is a Great Company that people people continue to underestimate. With that, the dow is up some 44 points. The jobs number for september is coming in above expectations, as you might have heard. 148,000 nonfarm jobs added. Lets get the first reaction from the white house. We want to welcome Jason Fuhrman to the show, the new chairman of of the president s council on economics. Welcome to you. Thank you for having me. Walk me through. Weve continued to see solid progress in the job market, 148,000 jobs this month, 43rd straight month of job growth, youve seen that Unemployment Rate coming pretty continuously down from 10 to 7. 2 but theres no question wed like to see private sector job growth strengthening at a time like this and theres no question that things like sequester, brinksmanship, all of that getting in the way of that happening. Any Silver Linings here . The 72, people are being less and less impressed with that number, kneeing what we know about participation. Earnings up 3 cents thats correct not bad, is it . We got decent earnings. The participation was pretty flat, pretty clean, reduction in the Unemployment Rate the other thing about this report is this is now telling bus tus about the economy over a month ago. Theres been a big policy change between this happening, which is the shutdown and brinksmanship over the debt limit. Just as interesting is what october will be like. What does that mean . Is this the time to be able to say, look, were going to really get together, republicans and democrats, those who dont want to play please stop being a leader because youre not, is this the socalled moment that we could rise above, which is the cnbc theme. Its very unusual for a News Organization to try to get involved but someone has got to come in and say enough is enough absolutely. This type of shutdown, brinksmanship, is bad for the economy. We want to do more than just not do the bad things. Theres good things we can do, we can be investi jobs, in infrastructure, in education. We can be we forming our tax rates. The president is going to be urging them to really focus on job growth. You said theres been an indicator for the beginning of october. Can you give us what your expectations are given the shutdown and the brinksmanship you referred to. Unemployment insurance claims are up about 50,000. And the job creation indicator was down a lot in the first two weeks of october and theres no question this brinksmanship is going to cost us a couple tenths on our growth rate in the First Quarter and a decent number in october. When we get the october numbers, should we overlook it then as an aberration given everything you just mentioned . Well, again, that next jobs number is going to also be delayed by a week because of the shutdown. This shutdown is going to have ramifications for months to come. It lab little bit of an aberration but wed like to make it much more of one by not repeating those types of shutdowns, that type of brinksmanship and getting beyond this. So we have it in our power to make sure that was just a onetime thing were not repeating. I know this is a little bit out of your universe but take for example the president s address yesterday regarding the obama care web site. He comes out, theres a mea culpa about the web site and follows it up with another scolding of house republicans. Doesnt he have some responsibility in turning down the rhetoric, in not following up another ordinary address with more talks of brinksmanship . You know, what the president is out there doing is hes urging congress to do its job and its job is a balanced budget. Take business tax reform. Theres a lot of agreement on how we can reform our business tax code. Why cant we have a grand bargain on jobs that does that to create more jobs. Those are the types of things that we can really be working together at a time like this and thats what the president is trying to figure out, you know, how to urge congress to do. Jason, look, i got an idea, you dont even have to answer it. I have a lot of ceos on from texas, from oklahoma, from colorado, people from north dakota. They need workers. What would happen if you just tried to help workers to get there . Just an idea. They need workers because they dont have enough people to be involved with im going to use a curse word, its called fossil fuels. What would happen if washington addressed this idea of the mismatch between not enough people and too many jobs . Theres no question that youve actually seen a decline in some of the measures of econ wed like more of that. When it comes to energy, certainly the president has been right out in front with an all of the above strategy and thats contributed to the real resurgence weve seen in oil and in gas. The United States is now the number one producer in the world, were soon going to be at the point where our production exceeds our imports of oil. I very much agree with your premise and the president does, too. We should be encouraging that production and we are. Jason, thanks for your time. Were still going through some of the details of the jobs numbers. Good to see you. Dow is up 25. Bob pisani is on the floor watching whats happening. Happy tuesday, echb. We moved up on the future on that somewhat disappointing jobs report. The fed is going to be on hold for a long time, likely until march at least. Barclays was out this morning saying they dont think its at least until march before the fed moves here. Meantime, on the earnings front, the trend continues, beating on earnings and flat to light on the revenue side. I looked at 21 Large Companies this morning. Of those 21, three missed on earnings and it was only 14 but, ten, almost half of them, missed on the revenue. Take a look at united technologies. Earnings beat was a penny, top line was light, they raised the low end of their earnings per share but lowered their revenue guidance. They talked about weakness in the military, Aerospace Market here. But theres a lot of strength in commercial aerospace, Lockheed Martin had great numbers. They did narrow their revenue guidance. Raising or affirming that 2013 eps guidance and doing nothing on revenue is the big trend right now. They didnt change their revenue guidance at all. Still the stock is up. Theres a couple of exception out there to this trend but not many of them. Tjx, retailers are struggling to meet their numbers. Not tjx. They raised their outlook, boosted their comparable sales. Theyre just firing on all cylinders right now. And they said theyd achieved 10 to 13 Earnings Growth in the next several years. It just doesnt get any better than that across many different reasons. Travelers, their numbers were tremendous this they beat on earnings by almost 10 . That is very hard for an Insurance Company to do. Lexmark had a really notable beat on revenues. Delta was also strong today. The airlines are continuing to report very, very good numbers. So this is going to be the big days, tuesday, wednesday and thursday. Well see if those trends beating on the bottom line flat to light on the top line continues. David, back to you. Thank you very much, bob pisani. One thing we didnt mention this morning, jcpenney, im watching the stock fall below market value. Actually now it is up but it had been below 2 billion. The stock had been down as much as 2. 5 this morning before rebounding slightly. You know, not too much to share other than were following it so closely. Not because there are really that many concerns at this point about liquidity but because when you watch a stock price decline as appreciably and quickly as this, it presents obstacles that management might have in the future. I can tell you at this point that so many of the hedge funds that we were reporting on a couple of months ago was owning the stock, smart money guys, even though at the time i said they really didnt know very much more than you might expect. Theyre out. Most of them at this point are out. Of course, Perry Capital filed, but carl bass heyman wouldnt answer whether he was in or out. Expectations are they have pared its stake significantly, uncertain about soros. Youve had a lot of selling in the stock. That equity stock, the hopes that youd get a new management team, thats hard to go there. I hated all the way down, got down to a level where i thought maybe they could do something and then they did that Equity Offering right in our faces, right in the face of all the people who didnt believe. Why did they hope . Because the company put out a release saying things were better. We talked about it. Perhaps a bit of panic there by jcpenney in the decision to issue equity. They are close to getting a deal with macys over martha stewart, though they may end up in court seeking damages. Ron johnson, the former ceo, having engineered that contentious agreement. I come back to that day where they did say things were better. I know. And bill ackman having sold his entire 18 position. He did that at twice the current stock price. Maybe he put the money in new skins. Roughly 50 down side from where he sold the stock. Better he cut it better late than never. When we comeck, a lot more on the netflix juggernaut. Also be sure to tune in tomorrow. Cramer with the ceo of starbucks. Howard schultz. The s p has just turned into its fourth consecutive high. We havent done that. Back in a minute. Youve got time bny mellon combines Investment Management investment servicing, giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Inst bny mellon. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Ive got a big date, but my sinuses are acting up. Its time for advil cold and sinus. [ male announcer ] truth is that wont relieve all your symptoms. Than any other behind the counter liquid gel. Oh what a relief it is. Streaming Service Netflix ceo said the euphoria surrounding the companys stock price reminds him of 2003. What movie streaming on netflix best describes the stocks breathtaking ride . Tweet us squawkstreet and well have that for you in the morning. The stan tucci character, the guy who really saw it coming. If you want to learn about how finance really works, that movie did it. You need a Rocket Scientist to fick out these things and you had a Rocket Scientist. You announced netflix, s p going to a sell on netflix, though they raised the price target to 365. Higher content investments could lead to potential capital dilutive contents. If they think theres an irrational exuberance, they should profit off it. Build a war chest. That way can you really come to the table and say, listen, we got enough money, we dont need to deal with you. As long as they can have incredible subscriber numbers, thats how theyre going to be judged. Whatever the end game is, you have 75 million subscribers domestically, i dont know. They won. Theyve become the de facto way to be able to watch things among number people. Its a time shift play, its a noncommercial way. And its mobile. And hbo makes lots of money. And they took pains in the call to say, look, were not hbo in terms of global reach. But in the end we watch their programs. In the end my friends all watch orange is the new black, we all watched house of cards. One of the thing hes said on the Conference Call is, listen, people who buzz about the first, when the second comes out, people then circle back and watch the first, breaking bad, walking dead, which i know youre probably a big fan of. Huge. Its not bad, david. I know. I dont have enough time. Im on episode ten of breaking bad. Jims six in 60 is coming up next. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. Dows up 17 points. Lets get six in 60. Who wholesale. Remember i came out and said they were good. People didnt listen and theyre good. Kimberly clark. They have great youorganic growth. This is such a wellrun american company. Theres a sell to hold on sandisk. Ive been wrong. Thats okay. People have been buying amc with the idea of being the parent. No. Own the sub. Weird but it works. Whats coming up tonight . We have a little oil going on tonight. I got to tell you we have been at the forefront of the smaller oils, as is brian sullivan. When i told that very nice man jason, what im trying to do is say, look, if you can just give people bus tickets, they can get to the man camps. They say we favor all forms of energy. Im not talking about energy. Im talking about jobs. I favor nuke, i favor wind. Its about jobs, not particular types of energy. Solar city is the only guys cleaning up on this. We look forward to your take on what looks like a pretty interesting market here. It is. Simon hobbs with a look at whats coming up at 10 00. You can say that again. If the ceo is warning of irrational exuberance, how far can netflix go . And apples big up veil this afternoon. And where do you put your money . Hour two is on the way. [ sneezes, coughs ] ive got a big date, but my sinuses are acting up. Its time for advil cold and sinus. [ male announcer ] truth is that wont relieve all your symptoms. New alka seltzer plusd relieves more sinus symptoms than any other behind the counter liquid gel. Oh what a relief it is. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. The Commerce Department has u. S. Construction data for august. Our jim iuorio is with us. The stock market doesnt know how to behave. We got a up 0. 6. I think what the market really wants is what it got in the employment number, which was just kind of bad, just bad enough we dont have to continue to talk about tapers. We probably dont have to talk about taper for the next couple of months. We would have to build on that. In the data thats been released today, this is the supporting cast to the star, which is the employment data. Back to you, kelly. Great to see you, jim. Lets bring in Steve Liesman for more perspective on the data, as well as the big jobs number. Steve still feels weird talk about it on a tuesday and the report is weird as well. Well, we have off tomorrow, dont we . Im not coming in. Im actually not. A 1. 4 , up a half. I wonder if thats finally something that will help the Third Quarter growth. The other thing catching my attention is public spending up, but mostly weve had negative on public spending or very small positives. A big jump in manufacturing also. That was up 10. 7 in july, minus 0. 1 in august. So bears watching. The jobs report really ultimately everybody saying its a weak report, weak payrolls. Nobody has anything really good to say about it. Here are the numbers. 1. 148. My number was 158. Revisions totaling 9,000. The august number was revised up to around 190 but the july number being revised down not very good. Really an upanddown pattern. Youre not seeing anything that suggests theres any strength in growth, creating strength in jobs. Heres some of the commentary that we got, in one line, soft all around, tapering this year is off the agenda. Baricalli barclays and the u. S. Labor market has lost what little it had. Private sector up only 1266. Inside that a decent number for construction. Retail up 21,000, finance down 2,000, leisure down 13 after many, many strong months and government up, dont get excited about that, thats all education, state and local. So the schedule is november 8th we get the report for october payrolls and the fed will meet before that. So any idea of them being on hold until at least they get clarity for at least a couple months makes sense. Construction up 20,000, having gone nowhere for six months. At least were beginning to get leverage in construction. A report came out from fan e fannie maes construction, weve been waiting for a pop and maybe now its starting. Were up 89 points on the dow. Stocks moving higher presumably because of this idea of the taper staying in for longer is perhaps bringing some buyers into the market. What does this report mean for investors in your view . The market is going to discount this report in the next couple of reports. Were looking forward what the focus is going to be on now, we know Interest Rates will be low for the next flee to six months. This is the time to say defensive stocks have done really well, its time to move on, look for companies that are going to grow, look for sectors that are going to grow, the cyclicals, the industrials. Youll have the three to six month period when rates wont grow and when they do people at the Federal Reserve will are concerned to hear what youre saying because youre talking about interest rating moving higher in the next six months or so. Theyve been trying to distinguish themselves between tapering i guess youre talking did market Interest Rates. Exactly. Its not going to move because of the next couple of months because of the circus we had in congress. We saw this happen six months ago. Its going to happen again. I think investors need to make sure theyve positioned portfolios and not to say this is going to keep on growing. You have to be in pieces of the market. John, there is great concern over which confident has been hit beyond this stage and that will show up in the data moving toward. What are you saying to clients . Increasingly you have this view we are dead locked, we lack leadership, people dont really believe, john, it would appear that next year is going to be better than this year. Its hard to find people who will tell you that. Thats right. We need some spurt of growth. That might take the form of lower energy prices, that would be helpful. And lets not forget when the tenyear treasury yield averaged just under 2 and the first half of 2013, payrolls were growing by 200,000 new jobs per month. In the Third Quarter the tenyear treasury yield moved sharply higher. What happened to jobs growth . Averages only 129,000 new jobs per month. Perhaps we need a return of that 2 tenyear treasury yield to get the type of growth this economy so badly needs. John, its an extremely important and often overlooked point. Isnt there a lag between the effec effects of it . Youre saying it would be almost in realtime. We have dampened the views of those as far as employment is concerned. Business sales havent been that great for a long period of time. And this combination of persistently sluggish Business Sales with higher Interest Rates and it doesnt make any sense perhaps discouraged a large number of businesses from adding employees. And that private sector jobs growth number for september was very discouraging, only 126,000 new jobs. Sarat, let me just return to what you were talking about, what works now. Were reminded buy low, sell hi high. You say people should go to the industrials, the underperformer. Oppenheimer says go for the internationals that are exposed, 3m, fedex, cummings. I mean consumer cyclicals, the autos, going to have top line growth. Those are going to do well because the middle class is going to grow. On a valuation basis, those sectors are trading at lower multiple than the market. Thats the opportunity where you want to sell high into the Consumer Staples and ults and i cyclicals, discretionaries, industrials. Good to talk to you. Thank you for your time. We are watching shares of netflix, pretty upbeat outlook. The ceo addressing the euphoria, in his words, surrounding the stock price on the companys Conference Call. Every time i read a story about netflix is the highest preeshating stock and the s p 500, it worries me because that was the exact headline we used to see in 2003. Up know, you can definitely we have a sense of momentum investors driving the stock price more than we might normally. Theres not a lot we can do about it. Were gentlemen, good morning to you both. What do you make of a ceo coming out and saying the app priat wo . I have to say i share some of that sentiment. He used the word euphoria. The reason for a downgrade has nothing to do with the execution on the company. All of the metrics were pretty much in line or better than expectations. What were worried about is the valuation at this point and i think thats really the primary factor right now to a downgrade at this point. Tony, if you agree with tuna, how long would you say the fundamentals have been detached from the stock . Ild very long at all. I think the fundamentals are completely aligned. You cant look at this business on the near term numbers. You really have to think what can this company be . Theyre tracking toward this vision of a larger total Addressable Market. They can ultimately raise pricing and extract a lot of value out of the company. I actually think of netflix as like a serious 2. 0 model right now. Would you be disappointed to see a secondary or second dilutive come along . Look at how many subs theyd need to struggle with their operation. Theyd have to lose 5 to 10 million subs. If you also take a look, this country has increased the amount spent on content 55 but raised their operator margins on the tuningsides. They did soften some of their targets, spreading out some of the way the pargets work in terms of their investment levels, longterm smart move for us we tend to kind of focus on the, you know, the near term horizon for the next 12 months and how do you project that over the next several years . Its interesting because i actually revisited our dcf model just before i came on the show and we were very hard pressed to justify anywhere close to where the stock is trading at these levels. Even under the most optimistic assumptions for subscriber growth. I think one of the things that have largely gone unnoticed is the beta of the stock has shot up in the last theres incremental risk equity to worry about. While the Addressable Market is potentially huge, i think a lot of that is already baked in the air. You did at this point there is no indication that such a pat is imminent but if they were to announce a major deal with comcast, for example, clearly all bets are off. That would be a major catalyst. At this point i think theres probably still a lot of potential sticking points before you see that kind of deal come to fruition. The devil is always in the details and well have to wait and see. Good discussion over a name that gets a lot of attention. Tuna, tony, thank you very much. Apple has erased more of its losses. Find out what you can expect find out what you can expect from the thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. Youre looking at a live shot at the center for the arts. And apple is expected to hold a presentation there. Rival microsoft has its surface 2 tablets going on sale today. Weve seen these products before, havent we . Reporter we have. But were here at a microsoft kiosk in new york city where we have seen customers come in to purchase a tablet. This is only one many venues offering the surface 2 tablet. They did launch last night where celebrities attended, though someone tweeted a stark contrast what we typically see outside an apple store when an iphone is released. Microsoft only 0. 7 of the tabb will the market. The selling point of the Microsoft Surface 2, up to 75 longer battery life than the previous version. We should also mention that nokia, which is being bought by microsoft, has also today unveiled six new devices. Nokias first tablet is out that runs microsofts operating system 8. 1 and its come out with a number of smartphone tablets, which are designed to compete more directly with samsungs galaxy. For more lets bring in jnps manager. Im not sure any longer were at a situation where you would expect long cues for new products. There are now so many out there, so many of them are on a level playing field. You kind of think that people are more likely to go to best buy where they can see the entire range before they make a decision. Yeah, thats true. But microsoft has never had the power the way that with fans the way that apple does to get people to line up. We were at the event last night. Here they had a big event at the Microsoft Store to unveil this around 10 00 p. M. , midnight and there was hardly anyone there. They try to do this to get the attention on apple day and it seems sad actually. Lets talk about the apple event this afternoon. What are we expecting . Two new ipads . Jnp isnt expecting people to get too excited. This is only 20 of the ipad story. We agree theyre really not evolutionary story which. And the opportunity opening up for apple, it canly china. I think if tim cook were here, he would say you guys on the market, you always want some great enough category. The innovation is always incremental. If we get a High Definition ipad mini and thinner ipad, cant that at least stem the sales decline for you . I think so. You know, all of this talk about everyone yes, of course we b evolution that should come out today is not small. It max the ditpgs, quite different in just the same way the jump from the iphone 4s to the 5s is differentiating. The hardware is still lighter and faster and better camera and all all these things still make the product quite attractive and a lot of growth to be had. Apple says they sill have a lot of cover. What do you read into that . Might there be another device here or service that they come out with and announce today . Well, if were lucky, well get a larger version ipad. If thats the hint of covering because thats really where microsoft is going, where their surface and surface pro tablets, trying to appeal to that enterprise user. That could be it thats coming up. I think whats really important for apple is the upcoming quarter around phones, we think the phones are good. We previewed apple favorably into that. We should just point out perhaps that the new nokia and the new surface both run windows 8. 1, which is the same operating system on which microsoft has taken 700 million, 900 million writedown as a result of not selling them. So the 8. 1 is not the great gift they hoped it would be. The competition for microsoft is not executing. The bad news for apple is its got a growth multiple and its not growing right now. For this stock to work, it needs a lot of inoccasion. That scenario where apple could have been a pioneer. For the moment, gentlemen, thank you. The other thing that we havent mentioned is that deli is advertising a 149 tablet. The Marketing Budget you need just just to break into the headlines when youre competing for apple, its tough for a lot of these companies. Its been compared to a death strip and, no, its appless new planned headquarters in cupertino, california. The dow up 122. Back in a minute. Ive always tried to give it my best shot. These days im living with a higher risk of stroke due to afib, a type of irregular heartbeat, not caused by a heart valve problem. At first, i took warfarin, but i wondered, could i up my game . My doctor told me about eliquis. And three Important Reasons to take eliquis instead. One, in a clinical trial, eliquis was proven to reduce the risk of stroke better than warfarin. Two, eliquis had less major bleeding than warfarin. And three. Unlike warfarin, theres no routine blood testing. [ male announcer ] dont stop taking eliquis unless your doctor tells you to, as stopping increases your risk of having a stroke. Eliquis can cause serious and in rare cases fatal bleeding. Dont take eliquis if you have an artificial heart valve or abnormal bleeding. 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The dow rallies over 3 4 of a point. Microsoft, general electric, cisco the s p 500, up 3 4 of 1 , the nasdaq just slightly performing the other two. Lets get over to dominic chu now with a quick market flash. Shares of fedex driving toward a new 52week high. They are more confident in fedexs management and improvement plans on the 32 million buyback announcement. Shares raised to 153. It was 142 before that. Thanks a lot. When we come back, art cashin will help us decipher the market. And tune in tomorrow, cramer live with starbucks ceo howard schultz, right here on squawk on the street. Well be right back. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Bny mellon combines Investment Management investment giving us unique insights app. Which help us attract the industrys brightest minds o ful rategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. Welcome back. Im Sharon Epperson with breaking news about natural gas. Supplies for week ending october 11, up by 77 billion cubic feet. It is higher than the fiveyear average and higher than the injection that we saw this time a year ago. We searing as a result National Guard gas prices under pressure. We hit a low of 3. 61 right when the number came out. Although we did see natural gas at a fourmonth high last week, around 3. 85, that was factoring in the colder temperatures this week were experiencing as fall sets in. Milder temperatures are expected for the winter and theyre looking ahead that there is plenty of natural gas in storage and were looking at Natural Gas Prices as week speak that are at a twoweek low. Some relief perhaps in heating prices. The dow is down 111 points after the disappointing jobs report. Art cashin joins us now. Were seeing the s p 500 having one of its best years in a bond market, it tells you the market could have further to go. They are having an absolute Champagne Party in the bond market right now. I constantly make the point that a good broker and good trader has to be part detective. You have to put the pieces together. You can see when the data came out, the bond market went into full celebration mode, the yield is 2. 55. Its weak enough the yields are soft enough its having an impact on the dollar, too. That has fallen. I think everybody is taking a celebratory mood that the stape may be june. June. Plenty of people are saying march, kicked out from january or february. June . I think people are thinking it might be june. Some of this data is going to be tainted for a while because of the shut down. Youre going to have hopefully not the same faceoff that you saw this time but youre going to still have some push and pull going into the end of the year and the beginning of january. Theres i think a growing likelihood that maybe theres at least a 30 chance in june. Isnt the danger that we assume the fed is going to do things that it may not do . We were here a couple of months ago and we havent heard from yellen. Were assuming they will continue to pump all this excess cash into the economy. At some point that order of magnitude that theyve got on their Balance Sheet becomes a problem. They may say were not prepared to paint ourselves into a corner for another we were talking about this on the show yesterday, for another half a trillion dollars. You talk about work of dr. Lacy hunt, about the level of debt in society and about at what point that becomes counterproductive. If you look at it, the old analogy used to be pushing on a string, the fed trying to get the economy moving can do a lot of things, can get rates very loaf but it cant stir up the animal spirits needed to move things along. Weve had just that frustration. There are studies out that indicate when the combination of private and public debt get up to around 260 of the gdp, it becomes almost look pushing on a string and weve seen that from i think it was the 1890s right up until the 1980s, gdp was moving at a 3. 5, 3. 7 and its been well below that and were almost just above stall speed now with trillions of dollars. I saw mr. Hunt present recently. It is an interesting theory saying dgp will continue to underperform historic averages. And the fed doesnt get it. If qe worked absolutely not. Thats why you see that theyre all talking about wed like to get back from it. Okay. Why do they want to get back from it . Because its inflationary tinder lying about . They havent done a great deal of harm. Theyve done no good but they havent done a great deal of harm and i would suggest to you my comments about possibly june with kelly, you look at mr. Fisher, who has been a destrikeout hawk on this and in his last statement said we may have to wait a little bit longer. If even the hawks are thinking about waiting, theyre worried about something. And that could be that our friends the china and the japanese have looked at a possible default, as ridiculous as it is, and said do i want to pack all my money into you have those comments coming out continuously now from the chinese, continuously. Youll see. We have some more next week. It will take a long time. They got a lot of our debt. They could do it over a long period of time. Its not about selling what they own. Its about not buying at the rate they buy. And they let it run off, too. If they stop buying and the fed reduces, whos there . Thats what the problem for the fed is. Pimco . Jeff gundlach, hes ready. Coming up, coach very close live following those results. Well find out if this is just the tip of the high end retail in trouble . Well find out in a minute. U ne. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Trust your instincts to make the call. To treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. Axiron can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Redss or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about the only underarm low t treatment, axiron. Welcome back to squawk on the street. Shares of offshore and oil Company Transocean are getting a pop, own terring the s p 5 entering the s p 500, taking the place of Computer Company dell. Thank you, dom. Coach to the down side after getting hit posting a smaller than expected revenue, saying sales were hit in north america in particular. Coach has struggled. Weve talked about the strength of kors. What was it in particular in these figures that has resulted today in almost an 8 drop in these shares . You hit it on the head. Theres really nothing new here. Coach has been losing share to kors. We know that. Theres a 32 spread between kors comps and coach comps. They basically said theyre looking for comps to be down the rest of the year and thats taking into consideration that the compares get easier so thats a really tough outlook for the rest of the year. To broaden out the conversation a little bit, were heading into a peculiar Holiday Season for retailers because its clear theres a lot of pressure when we get more and more announcing theyll be open on thanksgiving, when we have a coach struggling. At the same time there are other reports today, whirlpool to pick a name, doing good. So who do you buy here . I think its very much this season a tale of two different sections of retailers here. While most retailers from macys to kohls, do you have some outliers here. You have tjx today, they said comps are better than expected and theyre increasing their store plan. You have limited, victorias secret thats performed extremely well and doing very well in europe and the footwear category, which is probably the most exciting category. If you wonder where the teen spending is going, its going to their feet. Maybe footwear is the new handbag for this season. Lets go back to coach to complete the conversation. Is this company now in structural decline are you saying, or can it turn this around with a couple of seasons of great goods and its a buy at 50 . What is the view of that stock . They have a new designer in from a spanish high end retailer. It becomes more challenging to sell fullpriced bags. And theyve talked about coming more promotional. And lastly, they keep opening stores. If your comps are moving in the direction this companys are moving, see the writing on the wall and stop opening stores. I think the street would actually receive that very well if they came to that realization. Thats an interesting point. Stacy widlitz with a look at the Retail Sector as we head into the Holiday Season. Appreciate it. Have a good one. Thanks, guys. You, too. Dom . Watch shares of nokia, the finnish Telecommunication Company has spiked towards high, saying theyve taken a stake in this company seizing the opportunity to find some value. Those shares again spiking up toward session highs. The company activist hedge fund saying they saw an opportunity to find value and they like where they entered the division. Watch nokia shares. Theyre entering because of a nokia that doesnt have the handsets anymore, a Nokia Networks . Thats correct. They made the investment after they sold off the mobile Handset Division to microsoft. Thats a very good distinction to make there. Keep an eye on netflix, which is down 40 from the open, now down about 2 after s p did cut it to a sell after earnings last night. It might look like something from outer space but it is what the new apples headquarters will look like. How much does cupertino stand to benefit . The citys mayor will join us after the break. Take a look at an intra day of netflix. S p capital did cut into a sell and there were the comments from Reed Hastings saying essentially our stock is caught in some euphoria. Take a look at pandora, tesla, amazon. A lot of the names that cramer were just saying have seen a bit of a tumble in the last have hour. You do have days like this. Listen, it was a good by the way, most investors measure netflix as a very good quarter. If you want to look at anything related to value or a pe a quick point, its weird timing this would happen right now, because weve learned, what, the jobs report, the fed will potentially be tapering, around march, june, and thats where the momo comes from some of the names. Maybe its just profittaking. Apple will launch the new operating system, the maverick, this afternoon, which presumably has the pandora competitor in it, and everybody will be hit 385, almost 400 on netflix, you have guys happy to take money off the table. People wonder if icahn will come in, i still havent sold a single share. Yeah, i know, well see if he tweets. Yes. Meantime, the city of cupertino, california, building a new campus for apple. It was a dream of steve jobs and is now set for completion in 2016. Joining us this morning is the mayor of cupertino, california, orrin mahoning. Good morning. Good morning. Good to be here. A long time coming. It looks like it will happen. How important is this to cupertino . Well, its incredibly important. As you noted steve jobs last public appearance was before our city council about two years ago where he announced this would be built in cupertino, and since then, apple and cupertino have been working busily to make it a reality. Its an important project not just for the city but for the whole silicon valley. Cupertino has a major investment with 9,000 employees, and it will get bigger. As i say, its a lot of direct benefits to the city and to the valley, but a lot of indirect benefits, as well. Yeah. Obviously, a huge portion of the citys job base, a huge portion of the citys tax revenue. What make of the architecture, mr. Mayor, and what do you make of critics of the architecture . Well, its interesting. When we did the press conference and when weve talked to, you know, the architect, talking to the architects that put this together, you know, at some level, people think it was steve saying, i want this iconic building, a big, round building. But apparently, it is organic. It grew from the bottomup with the purpose of the building, which is to bring the engineers together to Work Together. I think its really interesting that all of the hightech companies in the valley, facebook, google, apple, all are buil n engineers and other employees together to Work Together collaboratively, to build new products. Mr. Mayor, at the back of your mind, do you worry that you may be a onetown a onecompany town . I think i read somewhere 40 of your employment comes from apple. I went to espu, a small city outside of helsinki, and they made so many local millionaires, everything seemed so great. I imagine it looks different now after 40,000 redundancies. You know, if we have one company to rely on, apple is the right one. You know, its not a flybynight dotcom, its a 160 billion company. The reason theyre putting 12,000 employees together is to keep innovating. I think theyll be here for a long while, and it really is not just one city in silicon valley. Its all of the cities working together. And business from one place will go to another place. So im not worried about it in the near term, and the near term is 20, 30 years. All right. Mr. Mayor, i cant wait to see you when its done. We should do a show from there. I think you should. Orrin the groundbreaking. The mayor of cupertino the groundbreaking will be very soon. Theyre eager to get going, and a big step last week to get it approved by the council. And unanimously approved and a move forward with the project. Were excited, theyre excited. Its a winwin for everybody. Yeah. Thank you so much for your time. Orrin mahoney, the mayor of cupertino. Keeping an eye on Unusual Movement in the eurodollar futures, before the jobs number was released. Eamon has all of the details. Good morning. Reporter good morning, this comes from nanex. This is our Tuesday Morning market mystery. We dont know why this would have happened, but it appears to have happened in a bunch of different futures before that 8 30 a. M. Release of the jobs report today, on a tuesday. Because of the Government Shutdown, we got it today. Look at the moves they spotted, starting with december 2013 euro futures, and what you see is the movement on the left, at 8 29 59. 500, the sharp jag up is about 500 milliseconds, or half a second before 8 30. The bright yellow line down the middle, thats 8 30 on the graph. If the information is released at 8 30, you would expect to see the futures start to move at 8 30, at the yellow line. You see some of the movements start to the left of that by half a second. A similar pattern here in december 2013 dallas futures. About a halfsecond move ahead. There you see the trade down at 500 milliseconds ahead of the hour, at 8 30 exactly, the red line. Thats where the news would have been released. Were told by nanex, 19. 75 million in contracts in the dollar futures traded in that 500millisecond period of time there. Its an unusual pattern. Well have to look at it. No indication why this happened. It could be lucky guesses by some people, or it could be Something Else entirely, kelly. Eamon a silly question, do we know all atomic clocks are the same, or could one be 500 milliseconds out . We know theyre exactly the same to a time scale much smaller than 500 milliseconds. Its a pretty big move. Bigger than a clock synchronization issue would be. Eamon, really appreciate it. Thank you. Netflix shares pulling back after new highs. Hastings said the euphoria surrounding the Company Stock reminds him of a similar period back in 2003, and that brings us to this mornings squat on the tweet. What music is this . Tweet as squawkstreet. The ocean gets warmer. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason rious investors are choosing fidelity. Now get 200 free trades when you open an account. Tweet time. Netflix in the red after a good morning. Weve been asking you what movie streaming best describes the stocks breathtaking ride. Greg rights brewsters millions. And a new strike, october sky, netflix is the new rocket. Depends on when theyre looking at the bears. Yes. The dow is down plus 50. And the nasdaq negative. Yeah. A reversal here. Heres what you missed if you were joining us earlier on. Announcer welcome to squawk on the street. Heres whats happened so far. We lurch from one event to another in this country every 90 to 120 days. It is not acceptable, regardless of whether youre a republican or a democrat. It just needs to stop, and they need to fix their business the way were required by our shareholders to fix our business. September nonfarm payrolls increase by 148,000 jobs. The Unemployment Rate is 7. 2 . I think these numbers directly reflect our politicians. I really do. I think its just dangerous to hire, dangerous to expand, in this country. Not overseas. Once again, coach is disappointing. And i have to tell you that i think this is maybe a failed play. I mean, if you want apparel, go with b. F. Corp. [ bell sounds ] theres the opening bell. No question we like to see privatesector job growth strengthening at a time like this, and no question that sequester, brinksmanship, all of that getting in the way of that happening. You have to think what can this company be . And theyre tracking towards this vision of a larger, total Addressable Market. If you believe the company has leverage, they can raise pricing and extract equity value out of the company. I think we will get new ipads, but we have to remember this is only 20 of the apple story. Ipads right now are in decline. All of the things that people are buzzing about, which we agree about, are really not revolutionary to the story. Theyre going to be evolutionary. Good morning, were live here at post 9 at the stork stock exchange, and well start with a check on the markets. Were seeing indexes off the highs. The index is up 50 points, the s p 500 trying to make it nine out of ten sessions positive, after a disappointing jobs report from the month of september. Tuesday, the nasdaq, the underperformer of the bunch, was briefly negative, now just slightly positive. Shares of whirlpool are rallying this morning after Third Quarter earnings beat analysts estimates. The appliance maker raised fullyear forecast because of strong sales. And delta moving to the upside. The Third Quarter earnings and net profit topped analysts estimates with revenue growing 6. 7 yearonyear. The day of the tablet. Microsoft releasing the surface 2 this morning, while apple is expected to reveal the latest version of the ipad in a couple of hours. Well look at both tablets. Plus, it is jobs tuesday. The u. S. Economy getting 148,000 jobs in september. Its a sign that hiring was slow ahead of the budget battles in washington. Well get another read on jobs in a couple of weeks, but will the shutdown and the debt ceiling fight mean the numbers may look worse . Also, orange is the new red for netflix. Trading to the downside after a big rally this morning. Where does netflix go from here . Well go behind the numbers to get you the answers. A big day for tablets. In a little under two hours, apple is expected to unveil new versions of the ipad. And microsofts new surface 2 tablet went on sale this morning. Lets look now at both microsoft and apple. Jon fortt is live for us outside the apple event in San Francisco this morning, seema in new york, outside the kiosk. And lets begin with you, seema. Are you seeing a pickup in foot traffic . Are people interested in this device . Reporter kelly, weve been here a couple of hour, and weve seen several customers stop by the microsoft kiosk in new york city, interested, wanting to learn more about the surface 2 tablet. Weve seen some Companies Purchase the surface 2 tablet, and actually spoke to two customers who picked the purchase. Nee full computer, so thats why i went for the surface pro, so its not just a tablet where youre bound to some app store. Its a full pc, basically. I bought it because it has the digitized eye pen, and apple doesnt have the pen or these kinds of devices. Reporter now, there were some customers, while intrigued, they werent interested in buying the surface because they had already invested in the apple ecosystem. One customer also mentioned that apple provides more apps than the microsoft ecosystem. In an effort to create a buzz around the surface 2 tablets, microsoft hosted highenergy events last night, but its not created a whole lot of buzz online, at least with social media. Within the last 24 hours, Microsoft Surface has seen around 7,000 tweets and retweets, versus 31 tweets around the apple ipad. So tablet wars are definitely on. Well continue to monitor the demand here and see if that continues to pick up. Back over to you. Seema, just real quick, is it steady traffic, or are people coming and going . Reporter its increased just in the last 20 minutes, kelly. I really think that has to do with time. Its around the 11 00 a. M. Hour. Were seeing more shoppers at the mall. Its picked up in the last 20 minutes. Well see if that continues over time. All right, seema, thank you very much. Monitoring the situation. Lets flip things over to jon fortt, out in San Francisco. 1 jon, it is interesting to see the news colliding on the same day. Do you think microsoft will steal some of the apple spotlight . Reporter probably not. Its not a fair fight. Apple is so far ahead of the others now. Look at the apple stock over the past year. Theyre getting close to breakeven. Despite being down with several others. Theres a lot of talk about apple losing market share. I want to put that in perspective. Last year, two ipad launches within the past year. This is the first time a Holiday Season ipad launch with a years worth of pentup demand. Well have to see how that goes. Were expecting to see new ipads, sleeker design, faster chips today. Maybe a cheaper ipad mini if they keep the older version around with the retina display. Looking at the ipad, where it fits in the lineup. Around 21 of revenue in fiscal 2012 for apple. The iphone, of course, the big seller. More than 50 of revenue coming from that. Yesterdays ipad lineup, lets take a look at that, the mini at 329. Ipad 2 largely selling into educationtype markets at 399, and the retina display at 499. Today, not exactly what well see, but it could be Something Like this. Apple could keep around the nonretina mini dropping the price to maybe 279, and the rest of the lineup being similar to what it is today pricewise, faster speeds and feeds. The question is, can apple maintain the advantage theyve had in profit share versus all of the rivals like amazon and microsoft trying to get into this market. Guys, back to you. All right. Were getting down to the actual event here, jon. Well see you in a little bit. Jon fortt in San Francisco. We want to bring in david trainer, and tom lesko owns about 28,000 shares. Gentlemen, good morning to you. Good morning. David, prior to going negative this morning, it was up for ten days in a row. Its only done that six times in three decades. This is pattern recognition, isnt it . It tends to do this before the launch of a new device. Thats right. Apple, i think, is one of the great momentum stocks of all time. I think the fundamentals truly dont support the valuation. But, look, that doesnt matter. Look, weve been in a momentumdriven market for almost a decade, i think. And apple is the popular stock, and they ride the tide of momentum until, whoops, it goes away. Tim, what do you make of what theyll say today, and to jons point about tablets, margin, share, are they doing it from a position of strength, or not . Oh, i think theyre certainly doing it from a position of strength. And ill take a second to respond to the other guest. I dont think 13. 5 times earnings momentum multiple. We think it trades at a reasonable multiple, in a business thats increasing the visibility and expanding on the mobile side and fundamental side. Sure. Even when apple was trading as high as it was, its never really been on the multiple. Its always been pretty conservative. Clearly, there was Something Else that was behind the big move in the shares. Maybe it was ownership, maybe just valuing it on a differe different looking at a different kind of metrics. So for you here, how do you justify if its not just priced to earnings . What is the story for apple . Is it innovation still . Well, its a combination of innovation and a really large install base. So you have a lot of people, i think jon fortt mentioned, a lot of people will be upgrading the tablets from tablet 1 to tablet 2, and also a refresh of the mini that i think people have been waiting for. Apple has a strong product line into year end, particularly the christmas season. So certainly, momentum investors are involved. But there are also a lot of fundamental guys getting involved as youve had on your show, people like carl icahn. Were constructive on where apple is going, the ecosystem and the product line. David, some would say theyve crossed through the valley of death. We know what the first part of the year was like when they got into the 300s. We know icahn is putting pressure for Balance Sheet moves, and there could be a watch or television out there. Isnt being isnt leaning too bearish risky here . You know, i dont think so. When you look at apple through the rearview mirror, yes, the profits have been high, the warchest is big. But the margin, theyre losing competitive advantage. Theyre not innovating anymore, theyre evolving. The competitors are twice as many as when they started and growing. The margins are sustainably high. Theyre barely getting on base, in my opinion. Its a large install base, yes. But its getting smaller and the competitors are getting better. As i mentioned before, the current stock price implies around 150 return on capital, in perpetuity. No company in history has done that. And i think a return on capital around 30 , 40 , puts them at maybe 300 bucks. Yeah. That tends to be the metric that bears lean on. Well see what happens in a little bit here. David, tim, thank you. Thank you. Intraday apple is interesting. They had a very brief, short decline around 11 00 a. M. , around 500. Some people on twitter called it a mini flashcrash. Who knows what happened there . But the website, as we tend to see, before a new law enforcement, has gone dark. Well be back as they start updating it for whatever we may see when the new are generally moving higher following the september jobs report, which came in below expectations. Investors hoping it means Federal Reserve will stick around and not pull back on quantitative easing just yet. Lets expand on this. Geno joins us, former executive Vice President at the new york fed. With us, as well, dean mackie, u. S. Chief economist with barclays. Guys, good morning. Good morning. Dean, let me kick things off with you, because i think you summarized the mood of markets. Youre looking for 200,000 on the jobs number, came in well shy of that, and as a result, youve pushed the taper call out to march. Yes . Thats right. We think that with the 143,000 average gain over the last three months, thats just not the kind of number the fed is looking for. Weve heard fomc members200,000 jobgrowth numbers they want to see, and it looks like we wont get that soon. Were much more comfortable saying the fed is on hold, at least until march. Geno, what this is now doing is spurring a conversation about whether quantitative easing can continue to work here. You look at some of the numbers on longerterm employment, the Participation Rate is not moving. Is there a few that its time for fiscal policy, if only it could take the reins here . So they have tried fiscal policy. Remember in 2009, we had a huge fiscal stimulus, and then, at that point, the private sector was depressed. And now, we have, if you will, the reverse, if the fiscal policy is a drag, and parts are improving. But netnet, growth of 2 now. 2. 2 to be exact. Fourplu 2, forward guidance, et cetera. So it does raise thest policies are and how effective theyve been and how effective theyll be in the future. Are you willing to guess what the economy would look like if we hadnt had it, if we hadnt been so flush . Yeah, so certainly would have been would have grown less. Thats the case. Thats unequivocal. Theres a point where people would be asking, what are the unintended consequences . What are the costs . Are we getting closer to the point where more qe are equaling or exceeding the benefits of qe. Its hard to measure, but its a question theyll be asking themselves. Dean, when you look into the report, it gets into structural unemployment in this country, does it not . If youre not getting payroll growth at 200, if youre not seeing some of the metrics improve, what does that imply in terms of what more or different kinds of policies should be adopted here . I think one of the things that we need to realize is that job growth is going to be a lot slower in this cycle, and it already has been, than in prior cycles. We think the key reason for that is the labor force Participation Rate is in a structural decline, in large part, because of the retirement of the baby boomers. That means you dont need as many jobs as you used to, to push the Unemployment Rate down. We think 75,000, 100,000 keeps the rate steady. Even the 150 numbers arent pushing the Unemployment Rate down. We think that will continue going forward. Maybe different implications of whether the fed can exit as were seeing it played out. Dean and dino, thank you for your time. Thank you. A major turnaround for netflix. The stock is in the red, off aboutbett performers on the s p 500. Hey, dom. The Energy Sector overall, its in the middle of the pack right now, but that doesnt take away from some of the great momentum stories for the e p names. Some of the companies that engage in exploration and production are hitting fresh 52week highs. Among them, familiar, independent name, ones not part of big energy conglomerates. Eog resources up. 50 . Devon energy, up, as well, and qep up the most after activist investors Jana Partners disclosed a 7. 5 stake in the company, and is pushing for a breakup of the units. Overall, carl, energy an important part. But the exploration and production names standing out. Thats good. Good to keep note of. Thank you, dom. Shares of netflix pulling back after hitting an alltime high earlier on today. Netflix did report yesterday it surpassed hbo as the largest u. S. Video subscription service. We want to take a more technical look, obviously what happened intraday to the stock, coming back to 339. Dan fitzpatrick is president of mentor. Com. Dan, i assume youve seen what happened since the open. Any explanation . Yeah, carl, i think the stock when it bounced up this morning, when it gapped up as high as it did, it made it over 300 yeartodate, and thats a stock that just begs to be sold. I shorted it first thing in the morning, though i must, i have to tell you, i already covered the short. The thing is, if we look at the weekly chart i think you have a chart there the weekly chart shows that the stock this morning extended 61 above the 200day moving average. If you look back at 2011, it was it was a much lower extension. So what this really was this morning, when you look at the volume, its tremendous and its been downside volume, this was a stock that gapped up first thing in the morning, because typically a lot of retail traders are rushing to buy it, and then the professionals, theyll sell it all day long. And so, this is just coming back to revert to the mean. Yeah. How i mean, i know you do technical analysis. Yeah. How much how fair is it to compare the extensions given that was really the precursor the last time of the quickstir debacle . Well, its kind of its not a real fair comparison, frankly. The charts were different. That was really a fundamental event where mr. Hastings just you know, he just absolutely made a critical mistake. This is more of a function of buying and selli inin ining pre. Where there was a buildup to earnings. Buy the anticipation, sell the event. If you just think about it from a trading standpoint, if you had bought this stock yesterday, it gapped up so much this morning, why wouldnt you take those profits . And, also, and this is a real important point, the markets themselves, the s p, is up at a point where its just really struggling right now, sand its due to roll over, as well. We really have one of the situations where a rising tide lifts all boats, but when that tide starts stops rising, then youre going to see a real pullback, as well. So thats really what were seeing. Nothing wrong with netflix. Dan, just curious, as well, for your take, as the nasdaq is flat if not slightly lower this morning. It seems as though maybe Collateral Damage across momo name, whatever you want to call them, the high flyers. Would there be any reason to link that to netflix, or does it suggest to you, as you indicated, its maybe the broader index, seeing heaviness this morning . Well, i think if you compare google, the price action on google, on friday, it gapped, and contrary to what netflix did, it gapped and ran. It had a big day from the opening bell all the way to the closing bell. Yesterday, it kind of flattened out. Now, today, whats happening to google . Its pulling back. And so, we do have some kind of a relationship where i think the momentum traders are looking at some of the big names 1, and they tend to be the nasdaq stocks. The momentum traders are looking at these names and saying, you know what, i think its time to pull in our horns. Theyre taking profits. For any particular reason, why now, dan . Were getting headlines the taper may be pushed off till june in the views of some. Why would a momentum trader get nervous at this point . Well, because typically you know, the markets anticipate these events. And when we saw, you know, what happened with the Government Shutdown, it was pretty obvious right away, in fact, bernanke mr. Bernanke even said before then, that they were going to hold things off because of the potential problems with the government. So i think this a lot of this was just baked in. I dont now of anybody who was surprised by the fed saying that they were going to hold off the taper. So i really think that there was a big runup. Now that the news is out, you think about it, typically trading the headlines is the wrong thing to do. The markets really set up to where it hurts the most people in the deepest way pretty much every day, if all youre doing is trading according to the headlines. Yeah. Well, if today does mark the day some of the momentum players change their tune, this will be one to remember. Dan, appreciate your insight. Good to see you again. My pleasure, thank you. Dan fitzpatrick. Staying with netflix, Reid Hastings said last night the euphoria around the stock price reminds him of 2003. It brings us to the squawk on the tweet. What movie streaming on netflix best describes the stocks breathtaking ride . Tweet us squawkstreet. Norfolk southern whats your function . Hooking up the country helping business run build were investing big to keep our country in the lead. Load we keep moving to deliver what you need. And that means growth, lots of cargo going all around the globe. Cars and parts, fuel and steel, peas and rice, hey thats nice Norfolk Southern whats your function . Helping this big country move ahead as one Norfolk Southern hows that function . In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Sometimes they just drop in. Always obvious. 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Obviously, well be talking about the ipads later today, but no immediate news out. I think the netflix issue was a good way to point, and i commend the analyst who was just on our show a few minutes ago. Why was it up 9 , was the bigger question. But the minute this happened here, the minute it dropped below the earlier mornings lows, the volume, unfortunately, you cant see it. Right here, the volume picked up dramatically, and this thing headed south. This is a classic momentum trade. This is what happens when the machines get involved, one side offed trade, and they keep selling and selling and it moves down. This has knockon effects on all of the momentum names. Apple was one of the collateral. Put up linkedin. It doesnt matter. Any of the big momentum names you know about here. And theres the volume pickup. Unfortunately, we should get volume charts, but you can see huge pickup in volume right there. Again, the machines piling on, they sell, sell, sell, and move along with the momentum. They wanted stops, well, it stops wherever it does stop. Put up facebook. Ill drag up 20 of the names. Momentum names. Same thing happened with all of the stocks at the same time. Volume spikes moved down, and the machines pile onto the system. Going into chinese internet stocks. You want to see the momentum names . Does this look familiar . Virtually the same charts. The thing they have in common is big momentum names. Put up sina, the same thing, big volume charts moving to the upside. All of this is what happens now in the modern trading. Doesnt it make you nostalgic for bandits, remember them . If you do, youve been in the business too long. And coach. It has problems on a fundamental basis here. Listen carefully. Weak traffic in north america, theyve had soft mall traffic overall. And they appear to be losing market share to competitors. Competitors like michael kors or marc jacobs. Were at the lowest levels since april in coach right now. And i think thats probably a major issue. At least, we have some fundamentals here. But id stick with the idea that all of the names had in common was theyre the big momentum names we talk about every day. And all of a sudden, you pile on, the machines just pile on ahead of the trades, take advantage of that, the volume picks up. And as they go, perhaps goes the rest of the market. Bob, thank you so much this morning. Okay. Aopening business on thanksgiving is the new black. Kohls joining macys and jcpenney, trying to get a jump on the Holiday Shopping season. What does the extra sales time mean for the major retailers . Well ask the ceo of vf corp. In just a moment. [ male announcer ] the founder of mercedesbenz once wrote something on a sheet of paper and placed it in his factory for all to see. Four simple words where the meaning has never been lost. The challenge always accepted. And the calling forever answered. Introducing the allnew 2014 sclass. Mercedesbenz. The best or nothing. [ passenger ] airport, please. What airline . United. [ indian accent ] which airline, sir . [ passenger ] united. Whoa taxi [ british accent ] what airline, then . [ passenger ] united. All right. [ spanish ] what airline . [ passenger ] united. [ mandarin ] which airline . [ passenger ] united. [ arabic ] which airline . [ passenger ] united. [ italian ] where are we going . [ passenger ] united. [ male announcer ] more destinations than any other airline. [ thai ] which airline do you fly . [ passenger ] united. [ male announcer ] thats great, big world friendly. The european markets are closing now. Welcome back. Lets bring in simon hobbs, as the markets continue to move around. Bill gates becoming the latest american to feel the value in europe, spending 155 million to enter one of the spanish construction companies. company. The theme is the same on both sides of the atlantic. Weve seen the nordic financials doing well. This insurer is paying 70 of its profits in dividends, and you can see the reaction. The earning misses are more common in the United States than in europe. Here are two that have warned today. This is the secondlargest Telecom Operator in sweden. On the upside, record bank, you know the brands. They have said that they will actually spin off potentially the pharmaceutical business, and you can see the reaction here, up over 5 . Thats all corporate news. The big two for tomorrow, on the one hand, the ecb will unveil the detail on its new stress test. Huge issue moving forward, and how we recapitalize, and the second thing that happens tomorrow, is in london, prince george, will be christened, remember him, he will be 3 months old. And prince louis, starting at 10 00, or will start at 10 00 our time, tomorrow eastern time. The big question for many women around the world is how will Kate Middleton look. Kate. Kelly. On her first redcarpet appearance since the birth. Youre taking a clandestine look at the show tomorrow, simon. I dont know what the plans will be. Only 60 people invited. I dont know if its private, tv cameras, youll see tomorrow. Simon hobbs with a look at everything happening across europe. Thank you, sir. Kohls is the latest retailer to announce it will open its doors at 8 00 p. M. On thanksgiving. They, of course, follow the footsteps of macys and jcpenney. So what impact will it have on inventory . Lets ask eric wiseman, chairman, president , ceo of v. F. Corps, responsible for brands like northface and timberland. He joins us live now on first on cnbc. Good morning. Good morning. Thank you for having us back on the show. You raised the dividend, 4for1 stock split, we understandment before we get into the financial details, can you tell us about your expectations into the Holiday Season, and whether the moves that to some smack of desperation on part of the large retailers, will be a boon or a headwind for you. I think bigbox retailing competitiveness in the United States. Theyre really important businesses, and theyre all fighting for consumer dollars that are hard to get at. And as a result of that, you know, theyre going to open up on the evening of thanksgiving. And i think at the end of the day, American Consumers will decide if thats something that they want to see. What that means for us, of course, is we sell to all of those people that you just mentioned, so our products will be in there and part of the activity. And i guess what i mean in terms of being a headwind, if theres any pressure to discount, to mark down the merchandise. You know, obviously i imagine theyd still be paying you full costs, full wholesale costs for the items. Do you worry at all about pressure coming on, and about being able to hold your pricing . Well, one of the other things we announced yesterday, kelly, is we are investing an additional 40 million in advertising behind our brand. Ten million spent in the Third Quarter, additional 40 in the First Quarter. Were going on any, digital, print, and get the consumers to pay regular price, and we think thats a good way to go. Weve tried it in the past, and its worked very well for us. You also have the benefit, of course, of commodity cost, such a headache for retailers a couple of years ago, generally moving into the right direction. How much is that helping profit margins, and do you expect it to continue . Well, weve had, you know, really strong growth margins this year, in the Third Quarter, as well. The Gross Margins up 90 basis points and weve been diligent about cost controls, and that was the source of the 40 million we had. We could have taken the earnings to a different level, but we chose to invest in the brand behind the future. Were not talking about product costs 2014, but weve been at this for 114 years. Were pretty good navigating through changes in product costs. Eric, everybody argued the 4for1 was overdue, given the market float, does it really mean anything that someone can get in at 50 instead of 200 . Whats the advantage . Well, heres how we thought about it. And that is the debate, carl, and youre exactly right. As we talked about it, we said theres absolutely no downside to doing this, and there is a potential upside. Were very focused on weve had great run financially, and we think this is a big statement of our confidence in our ability to hit the 2017 plan, growing our company to 17 billion in revenue and 18 in earnings per share. We thought, well, this is a great way to make we would not have done this had we thought we were concerned about our fiveyear plan. We thought and in so doing, we would open our stock to some Retail Investors who are reluctant to pay a high price for a stock. Yeah. So nothing but no downside and potential upside. Eric, just a last word, because you have a lens into the consumer and were void of data to some extent lately. What surprised you most about the quarter in terms of Shopping Behavior . Actually, the quarter came out we grew our revenue 5 in the Third Quarter. And thats right about what we thought. We actually had the original thinking was thick, so it was softer than we thought. But nothing dramatic. Were seeing across the globe, the first, second, Third Quarters of this year have played out, and we thought wed grow 10 in the fourth quarter, and thats what were aimed at. All right. Well leave it there and see if you can achieve that goal. Eric wiseman for us this morning. Thank you so much. Thank you. Apple is expected to unveil a new ipad a little later on today. Its been more than three years since apple introduced the original ipad, and looking back, you might forget the reviews initially were mixed. If you originally got the smartphone, who will carry around a third machine . Walt mossberg sounded a different tune, saying, i believe this beautiful new touchscreen device from apple has the potential to change portable computing, and the primacy of the laptop. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. But at xerox weve embraced a new role. Working behind the scenes to provide companies with services. Like helping hr departments manage benefits and pensions for over 11 million employees. Reducing document costs by up to 30 . And processing 421 billion dollars in accounts payables each year. Helping thousands of companies simplify how work gets done. Hows that for an encore . With xerox, youre ready for real business. Coming up today on the half, stocks are soaring, and were looking at the high flyers, including netflix, which is down. Is it time to sell . The tablet wars are heating up with big events at apple and nokia. Which new products have the potential to help or hurt your portfolio . Plus, with stocks at alltime highs, we have one guest shouting buy bonds. Wait until you hear the reasons. Its coming up on the half. And well talk to dave rosenburg, reflect on the big article yesterday in wall street journal, taking off the bear suit, at least partially. Yes. A great piece, scott. Thanks. Were a little over an hour away from the big unveil. Apple is expected to launch new versions of the ipad today. Apple store is down, as usual, as it always is before a big announcement. Coming from the event, Walt Mossberg is the columnist for the wall street Journal Technology second. A pleasure to have you, as always. Great to be here, carl. Whats important today, walt . Is it retina . Is it weight . Is it the cover . What are you looking for first . Well, you know, i think what i think what im looking for is what i always look for and i know this sounds corny but whats good for users . Whats going to be moving users ahead in the ability both to use tablets for, you know, consumption, but also productivity. And i think its interesting at the iphone event, only about a month ago, apple made it clear, although they werent talking about theism pad itself, theyd start making the productivity apps like sort of the Microsoft Office equivalent apps free, as well as their creativity apps for editing photos and videos. And i expect to see a continuation of that theme. Ipads already are being used for a lot of business purposes and productivity, and i wouldnt be surprised to see them push that theme a little more today. Walt, you know, people look at the yearoveryear market share figures, and they say look how far android and samsung have come in tablets. Yeah. But some of the buy recommendations on apple say the android, samsung aggressiveness is beginning to slip. Where are we in terms of apples comeback, or the degree to which they protect market share . Well, i mean, its not a comeback. Theyve always led in tablets. They continue to lead in tablets. They have a lot of competition. And thats good for consumers. I cant you know, i cant figure out where some of the analysts get some of their points of view. But apples job is to make money for shareholders. Some of that involves market share. Some of that involves margins. You guys know that kind of stuff better than i do. Im looking at the products, and i think if they put a better screen on the ipad mini, which i personally think is actually more of the sweet spot for a lot of people in the tablet business, that kind of size, that will give them a boost, as long as they dont make it too thick and heavy, because that retina the retina screen adds power drain and some weight. True. Yeah, walt, from a consumer point of view, what do you think the main thing of the people who use the devices now whether apple or another product are looking for . Is it something as simple as batdry life, or more of the product activities that youre talking about . I think boat, and its a great question. Let me talk about battery life. I run battery tests that are extremely harsh, and i run the exact same test on everyones tablet, whether its the Microsoft Surface or the google nexus, the samsung ones or the ipads. One of apples big advantages is they are hours of battery life ahead of everybody elses tablet. Whether its the mini or the fullsized ipad. And apple needs these new models need to maintain that edge. Because when youre carrying around a tablet, one reason you do it, instead of a laptop, is they have better battery life. Its a big edge for apple, particularly because they price higher than some of the competitors. And i think they need to make sure they dont lose that battery life edge. In terms of productivity, they have about almost 400,000 apps that have been specifically written for tablet, which is way ahead of android. And some of them are game, and some of them are, you know, entertainment, all of that kind of stuff. Cnbc probably has an app like that. Oh, yes. But some of them are some of them are real business and productivity apps, Companies Like oracle and salesforce. These kinds of Companies Make apps for ios and apple. We found your initial review from the first ipad. I believe this has the potential to change portable computing profoundly and to challenge the primacy of the laptop. Will that story continue as tablets improve . Absolutely. And thats not just apple, but other people as well. I think its already been proven out. And what i said, a paragraph or two later, was this will depend on whether consumers find enough scenarios that they currently use their laptops for, that they would that they can use tablets for. And i think its already proven out that there are so many scenarios that you grab your tablet for instead of your laptop, it has accounted for the decline in laptop sales. Yeah. So were already well under way on that trend, and that covers its mostly been ipad, but, of course, it also covers android and things like the windows tablet that nokia released yesterday. Walt, well see you in a little bit. Thank you so much. Walt mossberg. Take care. Joining us from the apple event today in San Francisco. Netflix has been a big mover in trading today. Its not the only one. Companies like Lockheed Martin and coach are some of those making news on earnings. Stay tuned, because earnings squad will break it all down for you in just a moment. [ female announcer ] who are we . We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Welcome to the earnings squad. Everybody is helping you trade the stories you may have missed. Joining me is dominic chu and herb greenberg. Lockheed reporting better than expected profits this morning. A 4 drop in sales. We know this. The government is spending less money on planes, missiles, boats, everything else. Its all about the profit picture, and theyve got a 79 billion order backlog, stuff that they have gotten orders for but havent made or delivered yet. Thats bullish for the company. Remember, all of the defense contractors will be dealing with a lower revenue environment. Its going to be about maintaining the profit margins. But you know whats interesting . Hmm . They didnt blame the Government Shutdown no, but they did comment and say they want them to fix their fiscal situation in a way thats not piecemeal. Right, going forward. Of course. Looking at shares of coach, trading lower after releasing the firstquarter earnings, and a lot of negatives, especially off a weak fiscal fourth quarter, samestore sale, a drop of 6 . It also saw 7 inventory increase, so thats also really concerning. Bright spot here, if there is one in this report, is china. Because sales are up about 35 . They did open six new locations. But there is a real concern about share loss, not just of michael kors, the obvious one, but kate spade and torrey birch. Out in space, right . Be wary. This is part of a multiyear transition. Remember, they talked about the accessories business. And the moving the ceo position to another guy who will come in january. They say in the fourth quarter, it will be a fuller expression of coach. We dont know what that means. What does that mean . And now, shareholders are abandoning the stock, because they want to see results here. Were watching shares of nuskin, and, herb, you like to follow the mlms, multilevel marketers. You know how i feel about multilevel marketers and there should be more oversight. This companys sales this quarter up 76 . The Company Effectively talking china is the big push. You need to understand china has been the place where a number of critics, sitron research, andrew luff, claiming the way they operate in china doesnt fit with the multilevel marketing rules there. The company says this is hogwash, nothing to it. And i find it interesting, the company made a very big push in its Earnings Release about its new weightloss product, which, of course, would be taking aim at the other big mlm company that which one is that . Uhhh herbalife. Yeah, starts with an h. A electric of a run, as it is with the multilevel marmers. You talk about mm. Momentum. Yeah, thats the earnings squad for this morning. Tweet us earningssquad. Coming up, new york state comptroller says problems in washington will hurt wall street profits and new york states coffers. He will explain why in a first on cnbc interview, and that is next. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. Welcome back. Wall street got off to a profitable start this year, but political gridlock in washington could cut into earnings and the coffers in the second half of 2013. On that note, Thomas Dinapoli joins us with a look at the figures. First of all, thank you for joining us. Thank you. Nice to be with you. Can you give me the sense, talk about the timing of the release. Is the main concern to draw attention to how big finances is to the economy, or to highlight risks coming out of policies in washington . We do this report on an annual basis, because wall streets secure industry is so important to our city and our state, and we want to track the performance. It has an impact on the revenue, in very short order, the state budget will be coming out, and the revenues are an important consideration in that regard. We see the first half of the year being a strong year, estimated 10 billion in profits. But we project, as we go to the second half of the year, a weakening in the profit picture, probably in our forecasts, around 15 billion. So still a good year relative to other year, but we see factors weakening the profits of the street as we head to the end of the 2013. Does this suggest to you that new york needs to diversify away from Financial Services or new york needs to do more to protect Financial Services . Well, probably a combination of the two. You know, certainly for the economy, the diversification is good. But wall street has been a very key driver of our economy, our city, and our state. So keeping new york as the national and Global Capital for finance is very, very key. Keeping a close eye on the big trends out there that are hurting profitability, you know, certainly the impact of litigation costs and fines, changing Interest Rate environment, and the dysfunction that we just went through in washington and the threat that that could come back again, those factors are threats. But long term, we want the street to be healthy and strong. We want oversight to strike the right balance between protecting consumers and investing, and still investors, and still have the street make money for us. Thats very important to new yorks future. When goldman puts backoffice operations in utah or florida, do you applaud that, because it helps the profitability . Or do you denounce it, because the jobs are leaving new york state . Well, neither. You know, what i want to see is the street and all of the big firms to be continue to be well situated in new york state. It doesnt mean theyre going to have every one of their employees or all of the operations located here. But its very, very important that we keep a close eye on the fact that unlike other recessionary times where the street led the way in terms of growing employment, we have a different situation now. In fact, when you look at the employment levels, compared when the markets tank, were down about 13 . So thats an area of concern for all of us. All right, thanks to Thomas Dinapoli this morning. We appreciate your time. Thank you. Apple event a few moments away. For that, well get back to headquarters and scott wapner and the halftime. Thank you so much. Ragged retailer, coach, the latest stock to get hammered. Is it time to throw in the towel on christmas . Tablet wars with pcs getting punked. Which new device unveiled will be a winner for your money . We begin with the markets. Another day, another high for the s p. The fourthstraight day its reached a record. How about this staggering stat . 80 of stocks in the index now up at least 10 this year. But its a comment from the ceo of one of the stocks that got us thinking about where the overall market is. Every time i read a story about netflix