Pace. Saying that closed the 58 which was well ahead of economic forecasts. David companies hired 176,000 new workers in august. Just about exactly matching the estimate. The numbers coming out a day before tomorrows big Labor Department report on august jobs numbers. Cheryl president obama but in st. Petersburg, russia, the possibility of u. S. Strikes and syria is dominating that meeting. Strongly opposing any u. S. Action. European Central Bank President says he is ready to act if necessary to keep Interest Rates low and maintain the economic recovery. The bank leaving its key Interest Rate unchanged, 45 percent. Cheryl and higher after announcing a deal to buy bushnell group. The Worlds Largest ammunition maker. David also the worlds biggest airline, united air, taking back all of the remaining pilots who were on furlough, nearly 600 of them, addressing future staffing needs. A busy day. After the bell starts right now. And lets get right to todays action. Chief investment officer. And in the pits of the cme. I want to start with you and Interest Rates. I said earlier that they are popping in anticipation of the fed tapering. Did i get it right . That is absolutely right. The market has been on the anticipation since the beginning of the summer. You can see it. Straight down in terms of price. Straight up in terms of yield. Really no pullback which is surprising given the macro economic. It will be interesting to see how the uptick in volume, the personnel, up ten to 20 . More interest. More interest both in terms of what happens after we move through that 3 percent level and what happens on the back of the perils tomorrow morning. Cheryl this is a big story, but how is it impacting the bond markets, treasurys that we saw today . Obviously people think that the fed the market may be getting ahead of the fed. It would not surprise me if the comments when they do come out and announce the tapir, they are thinking that they may be behind the market. We have seen a move of 140 basis points. I think we have discounted more than half of any potential normalization. David lets just assume for the momentum that the jobs numbers are not that great tomorrow and the fed does not taper or decides not to as a result of that. Are we going to see at tanking in the rates on interest . I dont think so. The market is telling us that beyond the expectation the economy is getting stronger. That is the message that has been drowned out by all of the talk about what the fed might be doing. A bank credit is starting to go a little bit faster on a monthtomonth basis. We saw yesterday the article about jumbo Mortgage Rates falling below the fannie mae rate which tells me that the demand for bank credit and the willingness of banks to lend is rising as the demand for credit comes back. Cheryl yet this could all change when the fed does make their policy decision next week, and we have had some analysts come on and say they are starting to pull back their expectations. It could be as little as 5 billion. How does the market react in your opinion if that is the number we get . Well, i think charlie is right. The market has gotten ahead of the fed in terms of its expectation. Whether or not the Economic Data that we have seen, and it looks fairly positive, actually being on this gated by the tilts, the excess of monetary policy. And it works like this. You look at the irs and number today, what to most wealthy people buy . Services and lots of them. The biggest benefactor . It is of the people. So when you go and look at that equation you have to be careful about what parts of the economy are actually doing better and how much and how permanent that demand for credit is and whether or not there is a sustainable growth, not only in jobs, but more importantly in income that actually fuels longer term sustainable consumption and more importantly, savings that puts the economy on a much healthier longer term low. David those the numbers, the job numbers used to be a very simple thing. You look at it overall. Picking it apart and parsing it. What specifically are you going to look at in terms of the jobs number . You have the overall jobs number, the Unemployment Rate, labor participation, parttime jobs versus fulltime jobs. What number will jump out at you . The hourly wage number. We have not seen any strength there yet. That would be right on trend. Really have yet to see any growth in wages. That will be the number we watch most closely because that is the number of the pack fed is paying very close attention to. Cheryl what sector are you playing right now . For those that are still interested in stocks, what you like right now . Bay into aerospace as well. Air traffic continues to grow at high singledigit rates. Even throughout the financial crisis and recession it was positive. Boeing, honeywell, parker as far as part suppliers. We think aerospace as a whole lot of runway. Demand for commercial aircraft in china is going to be growing steadily. It is our estimation that aerospace has a lot of runway, even if the economy does not perform all that well. David you said something fascinating. The most important number is hourly wages, whether they go up or down. And he says that is going to indicate what the fed might do. Do you agree . Absolutely. That was my comment earlier. The important piece of this equation has nothing to do with jobs but wages. He just said particularly, other parts of the u. S. Internationally oriented equity complex, the biggest is coming from the emerging market. Actually, the real organic growth over the last five or ten years will come out of the emerging economy. It would show little sloppy and messy and they have underperformed the developing companies, but investors are really looking for value, maybe they should look in that neighborhood. David i dont know. Hard to get any cheaper than argentina right now. Some people i sang that has just about bottoms. Hourly wages. Everyone focus on hourly wages. Both guests say that is the number to watch. We will be checking back with you in a couple of minutes. Cheryl well, the war in syria and the possibility of u. S. Intervention. With the president win over opponents . We you will go live to washington. David plus, the yield on u. S. Treasuries jump to a 25month highs just below 3 . Will the fed begin tapering later this month . How can you protect your portfolio . Also, we want to hear from you. What can you expect for tomorrows jobs report . Long gone. Up or down . Your answers coming later this hour. It. [ male announcer] surprise youre having triplets. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] surprise your car needs a new transmission. [ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. Its just common sense. At od, whatever business youre in, thats the business were in. With Premium Service like one of the best ontime delivery records and a low claims ratio, we do whatever it takes to make your business our business. Od. Helping the world keep promises. But chantix helped me do it. I told my doctor i think im. Im ready. 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Use caution when driving or operating machinery. Common side effects include nausea, trouble sleeping and unusual dreams if i could describe being a nonsmoker, i would say awesome. [ male announcer ] ask your doctor if chantix is right for you. David shares of the clothing retailer are getting a boost following Third Quarter earnings lets head back to nicole on the floor of the new york stock exchange. Reporter well, the last go around was not as good. People were concerned because they spend so much time doing Promotional Items. A lot of concern. This latest set of numbers looks a lot better. And as a result, you are seeing the start popping. The company itself says the product mix has not been spot on. But total sales of showing yearoveryear increases. This is the last point. The chief executive noted that sales of non Promotional Items increased. Potential to represent a larger portion. If you continue to discount and discount and discount, what kind of margins are you making . Things are looking better. Thats where they make the most money. David thank you very much. Cheryl well, the futures are closing. Lets head back and bring in sandra smith. See you. What stood out to you . The fact that this market is in a complete standstill. The big jobs report. An equity market that is basically finishing flat. Gold prices selling off. That safehaven demand has been diminishing. Oil prices are up. Can the yield on a ten year is almost a 3 . This is a market that is pricing out risk ahead of the jobs report in a complete waitandsee. David lets pull back for a second. The fed is buying mortgage bonds in order to keep Interest Rates low. Interest rates have been spiking. Could they be stupid steep enough that it decides not to taper even if the jobs number is good . I dont think so. The scenario that sandra just laid out as the right one. That imbalance between macro risk factors and geopolitical events and the data that actually looks okay. It does not look great. We are not accelerating into the gdp environment, but we are drowning. The risk of something happening seems to me pretty high. The rest of the jobs number coming in also seems pretty high. David i have to stop you there. What are they screaming about behind you . They are just gearing up ahead of tomorrow. Cheryl really quick. The gold contract. The gold miners taking a big hit on the equities side because gold is hitting levels we have not seen. Is that safety play over . Says south they came out and downgraded the industry. This is a market that obviously is telling us that they want to see what tomorrow is all about. Anticipating what the next move will be. They put syria on the back burner, but theyre is a lot to digest. Nobody wants to be long. No one wants to be short. A little bit of a run away from the flight to safety trade. Cheryl thank you. Appreciated. David well, the summit is under way. President obama, of course, facing strong resistance. The chinese are in. Cheryl the president of some leading opposition on capitol hill. Rich edson joins us from washington d. C. At that she told the summit in st. Petersburg. To you first. Well, syria is not even on the official agenda. The president is working on the margin of the summit trying to get support for a military strike. It could change the calculus about using chemical weapons again. As you point out, he is swimming against the tide. Chinese officials warn more violence and syria could have an impact on the global economy. The pope sent a letter urging the leaders here to lay aside the futile pursuit of a military solution. The russian president greeted mr. Obama with a smile but refused to give an inch. Blaming the chemical weapons attack on syrian rebels. Line about the presence of extremists. Secretary carias, as you all know, a decorated combat veteran. More than words and bit him. So he is not losing sleep after such a preposterous, and that was based on an inaccurate. President obamas said yesterday the socalled reset has achieved some things. Most notably the new start treaty. He admitted that it has now hit a wall, and those are his words. He canceled the trip to california. He will stick around, washington lobbying lawmakers. Cheryl all right. Thank you. David meanwhile, u. S. Congressional leaders also debating military intervention in syria. Well, lawmakers are largely undecided. They may support the president s request. It is up tsell intervention in o the rest of congress. Administration officials are Briefing Members of the house and senate. The california constituents are overwhelmingly against military action in syria, but she supports the president. Once the Administration Made this call i think there is a real need for us to back it up. Or america becomes a paper tiger. The Senate ForeignRelations Committee has already advanced up resolution granting the president limited authority to attack syria. Under this plan he could have 60 days to conduct military operations and then authorize an additional 30 days. The full Senate Considers the proposal on monday. The house also returns to consider the president s request delaying debate on government funding in the debt ceiling. David out of the vacation and into the fire. Cheryl the big jobs report is less than 24 hours away. Is the american jobs machine humming or stuttering . We will get a reality check. David Interest Rates are surging. Ben bernanke and fed policymakers getting ready for the big decision on whether not to taper asset purchases. How can you protect your portfolio with a higher interestrate . Higher Interest Rate portfolio plans. You dont want to miss this. They are changing. We will tell you coming down. Thank you orville and wilbur. Amelia. Neil and buzz for teaching us that you cant create the future. By clinging to the past. And with that youre history. Instead of looking behind. Delta is looking beyond. 80 thousand of us investing billions. In everything from the best experiences below. To the finest comforts above. Were not simply saluting history. Were making it. Cheryl time for a quick speed read of some of the days other headlines. Five stories, one minute. Pershing square lost over three and a half percent in august. Barely positive showing less than a half percent gain. Listeners to pandoras online Radio Service last month, over 1 billion, up 16 percent compared to one year ago. Topping facebook and youtube as the most popular smart phone application. Google maps has 54 percent of the global smart phone population. Social network ramping up with a premium subscription service. The new service will allow users to access all of the stickers and filters for 1499 per year. Madison square garden is paying 125 million to create a new jointventure, managed artists, Music Publishing rights and marketing and tv production. That is the speed read. David good work. As you notice, yields on u. S. Treasuries jumping to 25month highs after a strong report in the u. S. Services sector triggered another round of selling. Rates continued to climb. How can you protect your portfolio . Joining me now, we need is a vice now more than ever. How high you think rates will go . It depends. Right now rates are going up my anyway. Its an interesting little giveandtake. They want to project this idea of Economic Growth and stability. Hopefully things will be good. The market is acting differently right now things are at three. They could considerably go higher even without any move from the fed. David has the fed lost control of the rates . Are they going up right now because they suspect were going to have a good job number . Trying to get ahead. I think thats it. That raises an interesting question. I think right now we have seen a bunch of data that is highly encouraging. Rates are going to rise. If the fed decides that it does not want to actually tighten policy you have the market saying one thing and the fed saying another which is a dangerous position. Maybe the market corrects. If the fed says rates should not go up, they want. The scenario. It. David we are looking at the chart right now. That is a scary chart. Obviously 3 percent is not as scary number. But when you look at increase, the rate of increase. If it doubles again, were going to have higher rates one way or the other. In a 96 . How do you prepare . If you own bonds duration right now, you just, you know, pay to own a bond and get your interest, thats fine. Mortgage on their house, fix the interest. If youre in a bond fund you have to remember that they keep rolling. If you look at the chart from may to july, the rate for the 10year went from 2 to roughly 3 . When the rates went up only 1 . If youre only getting three or 4 percent and come returns but capital disappears as rates go up, well, you need to protect yourself. Its important to remember that they are treating these. You run the risk of losing capital. The actual capitol, investment bonds. David hold on to the bonds that you have that are giving you dividends. What about buying new bonds . Obviously stay away from longterm. That is a given. Do you buy into shortterm bonds . There is always a tradeoff. Your portfolio is a makes. I would never advocate moving everything. Yield is not as big. What you do is protect yourself against the loss of capital. You may be one to rotate part of your portfolio. The income is not as good, but you wont take it once rates rise. David how short . Where looking at one to three year treasuries. Well, it depends how much you can give up on the income. In that kind of take it. You can afford to make 1 or less. Its a balancing act versus loss of capital and income. David you want to diversify. You say you obviously dont want all bonds. There are some stocks that kind of act like bonds. Thats right. Diversified portfolio for income. Now was a decent time to consider a dividend type stocks. David for example . Well, we want to look get some of the big telecoms. Things are not so grand. Again, if youre going to lose capitol, the devil you know maybe better of the devil you dont know. The need to think about this as an investor. There is in come out