Company to Ares Management and the Canada Pension PlanInvestment Board for 6 billion. The deal marks the end of a years long effort to sell the retailer. Delta air lines. Stock is surging today on news the carrier is going to join the s p 500. The airline will be added to the index tomorrow. After the market closes. Nicole already her little plastic plane ready to go. David good for delta. Investors ignored downbeat news about kfc and pizza hut parent yum brands and pushed the stock higher. Yum announced a big august sales decline in china following a bird scare and bird flu outbreak. Microsoft is getting red to relaunch the slowselling surface tablet. The tech giant sending out invitations for a event here in new york on september 23rd. David a lot of commercials on the football channels. Google offered new concessions to end threeyear antitrust investigation by european regulators. The company trying avert a possible 5 billiondollar fine. Busy day here. After the bell starts right now there was a good tennis game before the football started. Cheryl pretty good. David lets get to todays action. Anton bear. Who will tell us why he thinks fixed income can become a cancer in your portfolio. Chris is in the pits of the cme with all the news from the middle of the country. Chris, what about this, the fed meeting that is coming up . Its next week, february 18th, that is when we learn, whether they will taper. Are people putting a hold on their portfolios until then . Well, ill tell you what, the volume here is extremely light. They say fed president s about three out of five of them are expecting dovish comments. I can tell you nine out of 10 traders here think there will be dovish comments. That is why were seeing such light volume in the s p futures. Were seeing a flattening in yield curve and 30year really not catching up a. A lot of traders are poised for a huge downturn as we see vix futures really climb these last two weeks. David by the way let me clarify something you said before. For those who dont know, when you talk about dovish comments by the fed, that means theyre more inclined to continue to print more money to buy more bonds. To ahead. Yeah. Individuals here, despite a nan fantastic number come out of japan and china, theyre a little wary what is going on with the fed and just how confident the fed president s are that things are going to not need the sort of capital that, we as traders expect us to make it through the fourth quarter. Cheryl well, start with antone here. Chris is talking about low volume and high volatility. At same time we got strong news out of china today. That economic data, at least for today gave us nice numbers to watch. Is this just a shortterm thing. Nice to have good news for a little while, isnt isnt. Cheryl right. Last week we had a good week and this week we start off with a bang in the market. Nice to have some good news going. You mentioned bond and fixed income being challenging for investors. Weve been sort of in this mode of steady growth and, its not exciting. Its not robust but its consistent. And secondquarter earnings for the s p 500 increasing 10 yearoveryear. We might be seeing a little more good news than people are giving credit to the market for. David but at the same time, anton, if we dont have a pick up in earnings, both on the top and bottom line, can these levels be sustained, stock levels . That came to a bottom in the. In the Third Quarter we saw a negative. Top line earnings coming down, bottom line earnings, net profits coming up. Obviously companies and ceos are cutting expenses. That is how theyre meeting these high growth earnings. But you are right, we have to start seeing consumers. Were going into the fourth quarter, bigtime for retail. I think there will be some telltale signs the next three months how much sustainability there will be in this market rally. Cheryl chris, well have you back when the s p futures pit closes but right now were looking at an s p higher for the fifth straight day and we get delta added to the s p at the close tomorrow. That will shake it up a little bit. What do you expect, a little volatility maybe tomorrow . I think there will be a little bit of volatility. I think more than delta is the apple announcement. Im very confident that apple news is going to be a potential selling event here. Us traders here are really waiting for anything to come through and traditionally, if you look at the history of these announcements, you get a runup. Since carl icahn tweeted about his dinner or lunch that he was going to have when we saw it climb up, this is a, announcement tomorrow about the iphone might be an opportunity to take some off the table if we get a pop off and that might lead to a downturn into the futures. David anton, lets get to your picks, one of which is a natural gas play, chenier energy, llg stock symbol for liquified natural gas. Why do you like it . I think the Energy Sector is an exciting area to be in. We have such an opportunity to turn the Global Markets around with the discoveries we have, the job creation opportunities. I like them with the opportunities they can expand and utilize the infrastructure. We really have no way to get oil and gas from north, to south. We built this whole economy around exporting. So, i like what cheniere has to do. I think it is early. I think there is lot 6 developments in energy. Nice to get a little start. Today it had a very nice day but i think energy is an exciting area to be invested in for investors to look at. Cheryl it certainly is. Anton you say that is potential cancer for the market. So bullish on equities that you wont get protection on fixed income side . That will be the challenge for investors, cheryl. Over portfolio should have a portion in core fixed income. The challenge, investors i think will miss the 1966 to, 1982 era of the bond market which was consistent rising interest, which was consist tent decline in bond values at a pace faster than the dividends they were earning. So that core fixed income portion of the portfolio i think will be an area that investors really need to Pay Attention to make sure what earnings theyre making on equity and stock side is not being eaten up by decline in bond values on a longer term basis. David chris, all bets are off if we keep having Interest Rates go up. They came down today. That is one of the reince we had a bullish market. What is the best bet at cme where bond are going. Interest rate specifically . We believe Interest Rates are going to stay above that 3 in the fourth quarter. Us traders really believe this climb up i think what youre see something a little bit after breather. I think the yield will continue to climb up. Over 3 on 10year. David any here than that . Chris, any higher, possibility we go to a 4 level before the years end . You know, i guess three traders on the trading desks specifically and theyre talking about 3. 10 to 3. 20 yield in 10year by the enof this year. David interesting stuff. Anton bear go ahead, chris. Interesting to note in 1958 the 10year treasury was at 1. 67 . We hit that earlier this year. I mean, the mountain chart of Interest Rates are right back at the bottom. It is a 30year schedule. Were right on track. David i understand. But if you look at threemonth schedule it is scary. It is straight up. Yeah. David chris, thank you very much for joining us. Anton, well come back to you in a couple minutes when the s p futures close. Thanks, gentleman. Well go back to chris. President obama pressing his case for intervention in syria. Will he convince lawmakers and the American People to support his tough line . You know that red line . Well bring you the very latest on the president s fullcourt press. David indeed. Also why small cap stocks could be a wonderful investment in a very risky market. The founder of the largest Small Cap Firm on the street is going to be here to tell us why the skeptics on this are wrong. If you look at russell 2,000, he appears to be right. Also we want to hear from you. What does apple need to unveil tomorrow in order to get its mojo back or get customers really crazy bit the way they used to be . Log on to facebook. Com afterthebell. Your answers on apple after the show. [ male announcer] surprise youre having triplets. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] rprise 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. 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If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. 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 shares of cliffs Natural Resources popped today, helped by chinas export news. Lets head back to Nicole Petallides on the floor of the new york stock exchange. Nicole. Well, chinas export news as you noted cheryl, was good news an not only helped cliff Natural Resource us but our markets overall. You want to see that economy doing well and bodes particularly well for Natural ResourceCompanies Much like cliff natural. It was up 6 . It was the fourth best performer in the s p 500. Also the fact of a company cliffs owns 60 of the stake in a decker project. The canadian metal exployer, first point machine rales, a joint venture with the company, nickel alloy project in central British Columbia was perceived prefeasibility study phase. The fact it is proceed something good news for cliffs natural, because as i said they own 60 of the that company. They have two good pieces of news. As a result it made it a real winner today. Back to you. Cheryl nicole, thank you very much. David s p futures are closing in just about a minute 1 2. Lets go back to chris gersch in the pits of the cme and our own sandra smith. Sandy i specifically asked you to be in this newsroom. Unfortunately they put you in the other. I did see you in the greenroom. At least for that. Is this momentary pop to the upside or do people see another floor developing and we can build off of that . Something interesting is about to happen. You know, david, when you look what is happening in the stock market. We continue to get these gains, tripledigit gains in the dow today. S p, nasdaq all higher on the session. You have the commodities Market Selling off. Oil is down nearly 2 . Gold continues to sell off, the market is not only pricing in right now, lack after strike by the u. S. In syria, but theyre also starting to price in the fact that the fed may not be willing to do anything at this meeting. Cheryl right. So either it is setting up for a disaster or pricing in reality. So, i mean, either way this market could be taken by surprise. Cheryl you know, chris, it will be a fun moment, always is, of course, on fed day and fed decision but what if the fed is not able to do anying and they cant scale back . If the data shows they cant do it. And they dont what is the reaction going to be in the pits do you think . Actually i think the reaction in the pit will be to the upside. Take a little note from japan. We had great gdp numbers tomorrow. Better than expected. That usually means strength in the currency. We saw the currency weaken. Now i mean, to a lot of us traders, counterintuitive what you would think would happen. We saw the dollar actually gain strength against the yen. S p futures, youre continuing to funnel that money into the market and there will be no drawback on that 85 billiondollar mark . You will see the markets pare to the upside. Cheryl whoa. David sandy, you came back from the midwest. You spent a lot of time at the cme you were a trader. What is the general perception with the cme traders like chris and folks on wall street . Is there a difference in perception whether the economy is going in the right direction . For one thing, the new york side i think is much more stock centric. Theyre much more focused on equities market. Theyre in chicago. Chris and toes folks are focused on bond side, currency side, commodity side of the equation and i think commodities markets are major predictors what is about to happen. Chris talks about the positive news out of japan and china this morning. Look no further than copper for prediction what is is happening with the global economy. David good point. Copper prices Third Straight day of gains. Longest rally in over a month for industrial metal. Who needs gold and silver . Look what is happening in copper. It is very telling, copper was there he have about the stats from china came out. Cheryl i dont want to forget what chris said, stocks could tear to the upside if the fed doesnt do anything on the 18th. Goo to go, chris. Were wellrounded here in chicago. Cheryl you so are. Hris. Same on wall street. Sandy smith, thank you. Good to see you as well. Cheryl sandy is shrinking, not expanding. Yeartodate the russell 2000 is outperforming the s p 500 by more than 6 . If you look further back to the bear market bottom touched on march 9th, 2009, the russell is up 200 , compared to a 150 gain on the s p 500, so this is trend that will continue . Now is the time, is it to buy small cap names . David joining us is is a ceo of soditi company ceo and founder. Good to see you, peter. We love small and midsized caps. They represent the real core of the american economy. But, and theres always a yes, we love them, but, the biggest but, but Bigger Companies have bigger cushions to fall on if things go bad, right . Well i dont know if that is necessarily true. We cover nearly 700 companies in our shop and in 1988 we saw the market, saw the economy slow down quite a bit. None of the companies we covered filed chapter 11. None. Companies david not a one. Not a one. And not a one of the companies needed government assistance of the it is interesting when you talk about risk and returns that maybe the risk isnt necessarily as much as people would think. Cheryl peter, obviously you like small cap. I will go ahead and assume you like micro as well. Tell me how you would rate and let our viewers how to find a good small cap name or microfilm. People are a little nervous. If it is apple i understand it. If it is bobs whole sale and dont know the business and afraid to buy that. What is interesting about small cap, while the names are small people will recognize the names where they are. Cheryl is that how you choose a stock . Not how you choose a stock but can give you some comfort like there is a brand much like there is with apple. For us, first thing you want to make sure its a solid franchise consistently. It is like large cap, it comes down to management and Strong Management Team you want to be comfortable. We only cover Profitable Companies so you look at earnings and pes. The last thing is cash flows. When you look at Small Cap Companies the cash flows have been tremendous. David one of the problems in a lot of Small Cap Companies weve been talking to, they say that the, that the Bigger Companies have a lot more lawyers and lobbyists or anything in the washington. The government is getting much more involved in Business Affairs than it used to be. A lot of people would say too much. I would say too much. Still Bigger Companies have the lobbyists. They can cut special deals for themselves that small guys cant. What do you think of that . He small guy has a small business. Understands it well. He seems to operate pretty well this that environment. In general he is much more flexibility in running his business. Sew tends to be below the radar screen, tends to do fairly well. Cheryl you got picks. I want to get to them. We want to hear some names. You like nautilus, Spartan Corporation and delta apparel. Apparel, yes. Cheryl tell me about these three. They all generally have the same characteristics. One they have solid franchises and solid businesses. Company like nautilus we all remember has been around a long time, particularly older people like myself. David and me. Not that look i use it a great deal but nautilus is certainly a good company. They have all low pes and great cash flows. Two of the three have very, very solid balance sheets. David peter sidoti thanks for coming in. Thank you very much. Thank you for your time. David a political tsunami in australia has conservatives celebrating all over the world. Well tell you what tony bab dot, the abbott, the new Prime Minister, means for you the global investor. Cheryl here at home president obama give as barrage of tv interviews todays pushes the case for military intervention in syria. Well go live to washington to find out whether or not the president s hard se