Suntrust Robinson Humphries says the stock could nearly double in the first year after the twitter ipo. Adam Warren Buffett got a 10 billiondollar pay day by investing in Blue Chip Companies during the financial crisis. That is according to the wall street journal. Liz bigname investor phil falcone is barred from new yorks Insurance Industry following a settlement with the sec that prevents him for working in the securities business for an entire five years. Adam World Bank PresidentRobert Zoellick is returning to goldman sachs. The latest example of resolving door between the government government sachs and wall street aft after the bell starts right now. Liz you would hardly call it a correction. We had a light day on wall street. Lets break down todays action my cox who says stocks may be heading lower if the stalemate continues. Mike gerka in the pits of the cme. Mike, give us a sense what is going on today. I dare say, 136 for the close. 136 lopped off the dow jones industrials, not too bad at the moment but if we start to see this snowball how much worse could it get . If you want to reference the s p you could take todays close and just throw that number on a net change and then all of a sudden you get down to the 100 day moving average. So about 1662 is where the market starts to teeter into the next level lower. For the same reason you saw 12 higher in gold or the ability to see gold start to catch the bid, that is what really the market is focusing on how the Precious Metals will react. Remember, the 10year bond yield is cementing itself at 2. 62 which is somewhat surprising. A lot of peel are expecting to see that rise but it is not happening yet. Adam hey, jamie, you called for a three to 5 dip if we dont get any reaction or solution to the debt ceiling fight. Do we get a greater correction on friday if there is not any hope in sight . I dont see a reason to go down any farther because people are worried about missing resolution of the problem than the shutdown itself. I dont think there is any chance we will see a 10 correction. There is no way the government will allow a debt ceiling fight to result in debt default there is, absolutely no way we go down that far. Were already down 3 . Well be down closer to five by the time this resolves and people will do what they have done all year which is buy the dips. Liz i can not wait to resurrect the sound bite of you saying there is no way it will happen because i would love not to see it happen certainly, weve seen in the past, remember august of 2011, jamie, all we had to do was get close to it and the market starts to churn, correct . Right. Last time in august of 11 it was downgrade of United States credit. It already happened before. We already know what it feels like. We know what happened. Investors are actually better off buying into that dip. Like i said i dont see there will be a major problem. In fact im more of a, in my mind i think not having taper was bigger deal than the Government Shutdown. I actually believe growth was accelerating. Now we have not proceeded with tapering on the Central Reserve and rates normalize, i think that is more problematic than were dealing with the shutdown at this moment. Adam mike, watching treasurys and see what happens with the yield and where we are going with some kind of a resolution. I would be afraid to venture towards treasurys because there are members of congress who are dead set taking past the october 17th and november deadline. Pretty amazing how the bond yield barometer what i would signal idle threats about that vernacular out of congress or anyone associated with politics. Effectively you have a market hyped us that the rhetoric behind the speak is nothing more than idle because they do expect a conclusion. For that reason it is october. Lets not forget what happens historically in october as far as not just crashes. When we see abrupt moves lower. The fact with the s p still below 1700 we feel a little safer at the moment. Liz but if you look and want to see how the major indices have performed since the shutdown happened, you see fractional moves to the downside. But, jamie, make us some money here. Show us the money. Where would you be investing right now. What looks good . You made a great point t looks better in hindsight to have invested when there are times of trouble. This year is the year of small caps. My view you should rotate out of small caps into multinationals right now. Its a great opportunity. If bernanke will not taper it makes dollar go down. Multinationals have trade. That is good place to be. Just about any multinational is a good one. I like United Technology and some other companies caught up in the shutdown nonsense. I think those particular companies represent tremendous value. I do like Technology Companies even microsoft of all things. So i think that theres an opportunity to own multinationals. Just enjoy energy. Enjoy the opportunity. One of the things happening right now is kind of odd the dollar is dropping and oil is dropping. That doesnt normally happen together. Liz can i jump in about the microsoft leadership change. We still do not have the chief there. There is indesigh sieveness on that level or not a, not a lot of clarity. People dont buy microsoft because of cachet but increase the dividend 10 a year. It is like a money machine. Every bit of Corporate America uses their enterprise software. That is why you own mike is. The ability to create cash and collect it to pay out retirees. That is what microsoft is these days. Its a great way to buy what you cant get in the treasury market anymore which is yield. Adam jamie, i will pose this question to michael but Pay Attention because you might have something to say. As we were getting on the air, federal government is looking for a new firm to ultimately replace fannie mae and freddie mac. Jamie likes some of the banks based on a housing recovery. Im curious with your take on this, michael. Could this upset what is left of the housing recovery . Those that securitize mortgages and pull off that may pull back to see what the future is looking like . You talk about a great cloud of regulation implementation. There is no way the market will figure out what the heck that means. Really, not the backbone of this type of scenario isnt something that could be positive for the market, but right now at least i think the Housing Market need as lot more than a bandaid or steroid shot right now. It need as complete overhaul. It is a step in the right direction. There is no way we i will be able in Municipal Land or reit land to try to figure out what that means because we know fannie and freddie absolutely benefited the most the last couple years. It is a mystery to me in that regard. That being said i would love to know what your thoughts are on that. Adam jamie, what do you think, what about the picks of some. Banks . Banks have been shellacked last couple weeks but the senator from my state of virginia, mark warner and senator from tennessee, bob corker are trying to come up with a something to create a new system for fannie and freddie the last couple years and have had no success in it but my view is this. I think anything we do will be better than the system we have. The problem with fannie and freddie it creates this huge behemoth they suck out of life of the market and give banks no reason to hold loans. Maybe this will give us an opportunity to resume the Financial Markets using the private sector which is actually something we really need to do. Could i step in there and ask you is that a form of stimulus . Adam Regional Banks, im not sure they would be a big as playwer new Fannie Freddie entity. Go ahead, michael. I was going to ask would that be considered a new round of stimulus since there is no more bullets in the gun. Could be. I dont know exactly what it means at this point. I dont think anybody really does. But my view, housing, goldman had a call about to brothers. Gosh the housing recovery is spreading. We dont need to concentrate our efforts up at the highend. I believe that means a lot when youre talking about Housing Finance and banks in general. Liz jamie, before we go, give two Regional Bank names. Bb t and suntrust. Liz bb t, suntrust. Still believer in Regional Banks. Thank you both, jamie cox and Michael Gerka. Well check in with you in a few minutes when the s p futures close. Adam it is a game of chicken in d. C. Does anybody in the white house or capitol hill know how to break a deadlock. Well go live for the latest what you need to know about the standoff. Liz the pentagon is under siege from budget cutters. Even though they sent 30,000 workers back from furlough, the 380,000. The worst may be ahead. Well find out which defense contractors can weather the coming storm. Adam that takes us to todays facebook question. Who do you think ultimately will be blamed if the u. S. Government defaults . Republicans, democrats or the president . Log on to facebook. Com afterthebell. Let us know your answers. Well be back. Liz how about all of them . [ male announcer ] once, there was a man who found a magic seashell. It told him what was happening on the tradg floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from td ameritrade. 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Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about e only underarm low t treatment, axiron. Customer erin swenson ordebut they didnt fit. Line customers not happy, im not happy. Sales go down, im not happy. Merch comes back, im not happy. Use ups. They make returns easy. Unhappy customer becomes happy customer. Then, repeat customer. Easy returns, im happy. Repeat customers, im happy. Sales go up, im happy. I ordered another pair im happy. both im happy. Im happy. Happy. Happy. Happy. Happy. Happy happy. I love logistics. Liz the terry cloth track suit, invented by juicy coutre. Fifth and pacific, formerly Liz Claiborne are on the rise after it sold off the juicy coutre brand. Head off to nicole petroleum on the floor of the new york stock exchange. Juicy coutre from cloth to velour, so hot, hot. So hot worth about 195 million. This is what were seeing. Fifth and pacific agreed to sell juicy coutre intellectual property over to Authentic Brand Groups so fifth and pacific they can think their brand, highend brand that is popular, kate spade. Fifth pacific are up 4 today. A lot of retail remembers in the red pertaining to sales and margins in the next quarter coming up. And Slower Growth in china and the like. It really bucks the trend with this news. Back to you. Liz are we deciding that juicy coutre is still cool, i dont know . I think it is still cool. Liz still cool . Gold chains and terry cloth suits. That is who made them. Absolutely not. Liz once pam and gila left, the two designers, forget it. Thank you very much, nicole. Adam s p futures will be closing. We want to head back to Michael Gerka in the pits of the cme. Is there any indication what the traders think will happen in washington . The traders are expecting next couple days that the s p will continue to trend lower as we get through three and fourweek lows here. For that reason on your last segment, i wouldnt be surprised to be one of the biggest investors in the u. S. Is europe. The euro continues to test 1. 36 and above it. I wouldnt doubt if it doesnt come into the real estate market. That is geting a bite taken out of it in the s p. Liz at expense of the dollar the euro is doing really well. Adam they were the basket case next summer. Seems were not in a basket case but headed that way. Thank you, michael. Thank you. The partial Government Shutdown has raised major questions about defense contractors even though the pentagon brought back nearly all of its civilian workers. What us did the budget stalemate mean for defense stocks . In the last hour we talked about names like Lockheed Martin and raytheon but there are many subsectors here and what does it mean to the economy as a whole . Joining us sam pearlstein, wells fargo head of Equity Research and crush nugai, isi head of Global Policy and central bank strategy. Great to have you both. Sam, i will begin with you. We got a sense that it will not be the worst thing in the world especially considering a lot of furloughed workers coming back for these names. Do you see it that way . Certainly i think the bigger issues for the defense considerate oftores are the budget and what happens over the next couple years with regards to the budget. The firms slowed down production when the inspectors couldnt come to the factory floor to keep production going along. Once they were been recalled i think that will be smoothed over very quickly. Liz krishna, you think that is the same way . I think broadly correct for the defense contractors there is still a larger question what it means for the economy as a whole. Liz lets talk about what you feel really will happen here with the individual names. Is there an area where people can really participate in the runup that weve seen lately where these names dont seem to be hurting, sam . The defense stocks have been very strong this year, despite the fact of all the discussion about defense cuts, stocks have been strong. They have high dividend yields. One of the things that i think has become more apparent it takes multiple years for any defense cuts to really start to affect the contractors. It takes multiple years to build a ship. So were still seeing top line come down for a lot of companies but still seeing very strong earnings growth. That is why stocks continued to do well. Liz what is interesting about your perspective i believe, you feel that the nongovernment defense, you like certain names not necessarily the obvious ones. What out there do you think is a real opportunity . Within our coverage universe the companies with large Defense Components that were recommending certainly boeing which is about a third defense. Still has pretty strong commercial aerospace growth. We like raytheon which has a Strong International presence and that is growing and General Dynamics has a Large Business jet operation. A lot of their business and earnings are coming from nonu. S. Businesses. Krishna, therein lie as great idea. You have a country with a major footprint except the toes are in different pools where it is dipped if that is possible. Is that a stretch. Thats right. You go to diversification your other guest is talking about, absolutely spot on right. Investors are looking into the debt ceiling and shutdown crisis. Look ahead to the endgame and think who might benefit from the kind of political compromise we might see if we get out of this . For instance, companies that could benefit from Corporate Tax reform. Potentially Companies Benefit from the keystone pipeline. There are other ways to play this as well. Liz guide as you little bit here . On the Corporate Tax reform youre looking for companies that maybe have a lot of cashing, a lot of earnings overseas. They could be the beneficiaries of Corporate Tax reform that allowed them to bring that money home without having to pay a large amount of tax. That is certainly attractive for a number of names. Of course in terms of the oil pipeline business, anyone connected with keystone, if that is one of the elements that gets thrown into the mix. Were also looking at a possibility, potentially of some relief from some of the most painful sequester cuts. If the house and senate can get together and put in place some of those entitlement savings to replace those. Liz you know, im so glad you brought up the sequester. Is it lost on anyone here . I cant believe how much bellyaching how we heard it was so not patriotic to allow the sequester to happen. That all these companies will get slammed. Lets be honest there is a real effect on smaller defense companies, right, sam . But in the grand scheme of things is it as bad as people were made to believe it would be . Certainly the budget is coming down. There is the whole sequester for the next 10 years is still in place. Until the law gets changed that is currently the law. So we saw most of congress marking up the fiscal 14 bu