there right now. sprint is up 6.75%, cat up 4.33% and robert half international up 3% on the day. be interesting to see in the last couple hours whether this modest advance in the dow jones industrial average holds. >> gather up your ukrainian hirminias and come home. that does it for "power lunch." >> "street signs" begins now. yep. it is a very uneasy beginning to the week. markets around the world still on edge. the dow dropping again. this all ahead of the final fed meeting. we have your full rundown of the latest emerging market turmoil and whether this could cause ben bernanke to give you a big going away present from his final fed meeting. also a winter sticker shock. nat gas is burning money right from your pocket and maybe even the stock market.

there's opportunity here, mandy. we will present the top five stocks under ten bucks a share. you got to find opportunity. that's what we do on "street signs." >> it is. we find the silver linings. let's take a look at the markets. have you got whiplash yet? it's been a volatile day for stocks. i will tell you this. following last week, which was the worst week for stocks since the middle of 2012, as you can see here behind me, the dow has just gone positive by a whisker but still, it is showing green. this is after being down as many as 95 points earlier on today. it is really trying to avoid a fifth straight day of losses. as for the s&p, as you can see, it is still lower but it still could close at its lowest since december 17th if it doesn't get back into the black. it is also on track for its biggest monthly drop since may of 2012. the nasdaq, last but not least, is down 28 points. it is down for the third straight day. it is seeing its biggest three-day loss since last june. those are the stats we know so far. things can change. >> yeah, they certainly can.

we are coming off obviously a very wild week last week, and as mandy showed you, things are a little bit calmer today. we are down but not by much. in fact, a couple tenths of 1%. most emerging markets are holding somewhat steady. that's the good news. some fear this could be the calm before the emerging markets storm. let's bring in our chief international correspondent, michelle caruso-cabrera. nothing is settled just because we're not tanking today. >> no. absolutely not. we are waiting to hear and see about some certain things. first of all, turkey. today they announced they would have an emergency meeting of the central bank. this is the central bank that just one week ago said that they weren't going to raise interest rates because -- they didn't say why, because there was an election coming up. then the currency got hammered. they have to do something. the expectation is they could raise interest rates between 2% and 4%. not a quarter of a percent. 2% to 4%. that would be a huge increase. >> to 10% plus. >> right now it's 9.75%. so yeah. >> they are trying to defend

their currency. >> absolutely. if you are a riskier place, and it's risky there, you wouldn't want investors to leave. >> isn't there a risk in having an emergency central bank meeting? everything's fine, we're holding an emergency meeting, but everything is fine. >> this may be the signal they are willing to act the way many think they should have rackeact. >> do you think these responses will be enough? we have had past crises. there have been all kinds of crises in the emerging world before but now they count for so much more of the global gdp. i'm wondering if these individual central banks can't do enough to defend their currencies. is the fed powerless to help? >> well, i mean, if we see feedback into the united states, i think that's when the u.s. federal reserve will act. i don't think the u.s. federal reserve is going to act to try to help out india or brazil. if we have a problem because of it, then you will see. in terms of whether or not those central banks and the rest of the world can do enough, there's two schools of thought.

they have a lot more foreign exchange reserves to be able to defend themselves, at the same time when the market knows you are level foreign exchange reserves, what do they do? they can attack you because they know how much fire power you have and they can bring you to your knees. we have seen them do it before. >> michelle, fantastic stuff. thank you very much. this is a continuing story. let's take a look at the different pieces of this puzzle. let's take china first up. joining us is the ceo of destination world management and a cnbc contributor. michael, we have talked about the risks in china. i want to know how a u.s. global investor responds to those risks. >> you have less china right now. there is tremendous uncertainty in china right now. we obviously have a situation where china right now is trying to change their economy from export to internal consumption. most investors really are not aware of the massive shift that is happening towards internal consumption from an investment standpoint. they are still out there buying things like the shanghai index,

eem. they don't realize you got to get more internal consumption. that's what's happening in china right now. >> michael, you know i love you. i agree with you a little on china. here's my concern. you said china has already emerged into some respects. per capita gdp, this will blow our viewers' minds, per capita gdp, the value of goods created by each individual worker in china, is less than iraq and only slightly more than namibia. $51,749 a person in the u.s. china is still a third world country that just happens to have a few thousand millionaires. >> well, it depends where you go. if you go to beijing, that's the case. i was in beijing last year. if you drive 25 miles outside the city, yeah, it's emerging. but if you look at basically where the wealth is in china, where the companies are in

china, the manufacturing, these areas are very, very well developed. all you have to do is look at the price of real estate in shanghai and beijing. i don't think you can look at an average sort of price. it's kind of like looking at beverly hills real estate and comparing it to some other place in the united states. you really can't use the average. i don't think it's a fair comparison. >> that may be the case but if you take a look at the real estate sector in china and the banking sector in china, lot of people feel it is just a house of cards and could come tumbling down. tell us what we do in terms of actual names that a u.s. investor should either sell or buy in this situation. >> first of all, i think what you have to be very, very careful of is buying chinese names. the regulations, the oversight is not really what you might expect. >> you also can't, right? mandy and i can't buy a shares because we're not foreign nationals. we could buy the hong kong shares. i don't go buy stock on the index. >> true, but you can buy multi nationals with exposure to china, et cetera. from that point of view, what would you be looking at? >> i certainly would be shifting

from exports to more internal consumption. there are assets also that pay dividends inside of china, believe it or not. e-give is an etf that pays a dividend. e-con is an asset that is an internal consumption name. then if you want to be in emerging markets and long term, you have to be in emerging markets. short term you probably have to be underweight. we are underweight emerging markets right now. you look at names like disney, at names like believe it or not, apple that will probably report fairly soft iphone sales, but these are names that will capitalize on emerging market growth. we, for example, got out of brazil last year. we got out of latin america. we were very tempted to go into mexico. we didn't go into mexico. we have been reducing our exposure in china over the last year and a half. as you know, we are believers in emerging markets. short term, you got to reduce. >> long term, china's got a bright future. nobody doubts that. every ceo i have talked to

either on this show, privately, bankers, traders, they all say the same thing. the opportunity seems to be there. nobody can figure out how to make money. they get ripped off, all of a sudden a product that looks like theirs hits the market about two years after they show up. they are frustrated as heck by china. >> did you see the comments from the cfo of [ inaudible ]? >> i did not. what did he say? >> a lot of it is distributors, people who would be able to sell stanley black and decker products in china just can't get the credit to be able to finance the purchases. the channel is getting broken. >> yeah, i think that's true. i think again, i think that's a bit of an overstatement. i don't think everything going into china is being pirated from an intellectual capital standpoint. i did a presentation with a government city in china or municipality in china in the auto industry in detroit, a company like johnson air controls which produces tremendous amounts of car seats in the united states actually are expanding into china. what are they expanding into china for? they are becoming partners with

the chinese government and they are not exporting their manufacturing. you know what they're doing? they are actually producing seats for internal consumption in china. that's how you have to play this. that's how you have to position. >> got it. okay. understood. the export play is over. great to have you on the show. we went from turkey to china. now let's look at latin america. let's take a look, because these indexes are trading. argentina is actually down about 2 .5%. colombia is down. venezuela has been all over the place the last couple years. obviously with chavez dying. brazil, the biggest market, down .1%. not a huge, huge uproar there in these markets. let's talk more about why you care about how these do. we have the head of emerging markets research at jpmorgan and

katherine rooney vera. now that we have introductions out of the way, argentina, the entire market cap of the stock market, every company listed, is smaller than yahoo!. do we care? >> the u.s. investors should care, because really, argentina can be emblematic of the rest of emerging markets. unfortunately, and i don't think this should be the case, investors should differentiate but argentina has been the case that has taken down a lot of the rest of the emerging markets. em has been smacked since the beginning of the taper talk but now we have argentina, the straw that broke the camel's back, kind of taking em down along with it. i think argentina is a separate case, kind of similar to venezuela, you named those two. they are kind of more erratic cases. but we have seen the mexican story getting hit, the peso which is a story that we like, a currency we like, and we see value in. unfortunately, we do see contagion in terms of asset prices and investors getting hit

precisely because there are some names out there that have risk. >> so i think katherine makes an excellent point here. because of contagion, everything is getting pulled down together but it's very clear there are certain countries in latin america that have stronger fundamentals than others. where would you be investing as a result of this that is giving a better entry point? >> i would say in the case of argentina, i would not play the story of contagion too strongly. i think that what happened last week is that all countries were correcting, also the developed markets were in correction mode, and that is -- it was almost like a coincidence that argentina decided to let the peso go and try to gain a little maneuvering room. i wouldn't say it was argentina the one that drove the entire market selloff here. in terms of a country, certainly we do see different trends within latin america. mexico is certainly a positive

story. it's oftentimes confounded, the mexican peso is being used as a hedging tool, but we still like the peso. our equity analysts are still recommending overweight in mexican stocks, and brazil is a little bit in the opposite side. i think that brazil is going to provide a very good entry point sometime later this year. we're not seeing the policy response we would like to and this is because, again, elections happening in october. i think brazil is a country that investors should be watching to enter at the right time in the next two to three quarters. >> bit of a brief discussion but we got to go. we went around the world in five minutes. give us credit there. see you again. thank you very much. still ahead, will yellen be screaming -- sorry. about emerging markets? steve liesman on ben bernanke's final fed meeting this week. >> later on, apple reporting earnings after the bell. we will tell you the three key things to watch, when they

report. plus we will go bargain hunting with five stocks under ten bucks. "street signs" is back after this. [ male announcer ] here's a question for you: is your tv powered by coal? natural gas? nuclear? or renewables like solar... and wind? let's find out. this is where america's electricity comes from. a diversity of energy sources helps ensure the electricity

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four hours on the slopes.urs on weights. take the energy quiz. and two hours doing this stuff. which leaves me approximately two minutes to get my banking done. so i use the citi mobile app to quickly check my accounts and pay my bills. which leaves me about five seconds to kick back. that was nice. bank from almost anywhere with the citi mobile app. citi, with you every step of the way. if it wasn't busy enough, the federal reserve kicking off a two-day policy meeting tomorrow. it is ben bernanke's last one ever as a fed chairman. could he give us a big january surprise? steve liesman is here. what do you think? >> not in the form of not tapering.

>> you knew where we were going with this. will they look at emerging markets and say you know that whole taper thing we did in december? >> just kidding. >> we're stopping. >> no. i think this fed has fought relatively hard to get where it is right now and i don't think it would give up the expectation of the market out there which is i think fairly well priced for the $10 billion taper. we'll have full results by the way tomorrow from our cnbc fed survey which will show, wink and a nod, pretty much that's what the market expects going on during the year. i brought a little matrix or list, if you want to call it, for how the fed might think of the crisis such as this. i think in the first thing, it's going to ask itself does it change its medium term forecast. all events will be played through that prism of what it expects. i don't think it sees what's happening now in turkey, argentina, south africa, as something that endangers the forecast. second thing that represents systemic risk, i don't think it feels as if there's so much

leverage right now in the system that it would endanger the u.s. system. finally, is there an underlying macro economic problem. again, i don't think when we talk about these things and we have for quite awhile now, we see individual problems. we don't see a universal problem. >> i'm wondering how much, because the fed, believe it or not, in some commentary, is taking some of the blame, if not quote quite a lot of the blame for flight out of the emerging markets. what do you think? >> well, what i think the fed would say is they have a job, a mandate from congress to take care of u.s. monetary policy. you can divide the world into two different types of countries, those that have hitched their wagon to u.s. monetary policy and those who have not. countries like china you can think of from a monetary policy standpoint as the 51st state. if you link your currency to the dollar, you become subject to u.s. monetary policy. that's a choice china has made. the u.s. federal reserve has to make its choices. now, i'm not saying it does so in a vacuum. i'm saying it's going to take a look at what happens globally. but these guys have kind of been on notice in order to take care

of themselves and to deal with this issue which was coming -- >> long lead time. >> you should have done it. i don't think the fed's going to say because of what's happening in those places, unless it gets to a point of endangering the forecast or systemic risk for the u.s. banking system. >> thank you so much. be sure to catch the fed policy statement right here on "street signs." that will be wednesday at 2:00 p.m. eastern or 11:00 a.m. pacific. >> i love those shows. there's no prep. it's just like see what they do, because whatever you've got, they could change it. you throw the notes out and go. >> that's not true. you memorize the statement, don't you? >> word for word? >> i look at it closely, yes. i'm not sure i memorize it. >> like you did those poems in high school. right? >> i do have an unusual memory capacity. >> i know you do. i think you are understating your preparation for this. >> that's how i roll. $1.7 trillion. that's a big number, folks. it is also the value of the etf

market as of the end of last year. anyone who is everyone or vice versa in etfs is in florida for the annual inside etf conference. bob pisani braved the 80 degree temperatures in southern florida and joins us now from the conference. >> it's sunny and beautiful here. thank you very much for noticing that. you know, this is the biggest etf conference in the world and it's appropriate we've got the biggest etf manager in the world. i want to introduce him to you. he's not on the air much. steven cuciaro is the cfo of windhaven investment management, the largest etf manager in the world. $18 billion under management. that's bigger than most of the big hedge funds that we have on all the time. thanks for joining us. i know you don't do this very often. i appreciate it. the biggest topic here is protecting clients' money right now. it's got a little volatility at the start of the year. you've got a very interesting way to keep the volatility in your portfolios down. explain that to us. >> well, all investors want to pick winners but no one has a perfect crystal ball. we advocate complementing

investments with a core portfolio, collection of etfs, each of which is designed to try to protect on the downside under a variety of scenarios. >> $18 billion, all etfs. biggest in the world. you are owned by schwab. you offered to show us your portfolio. i want to thank you for that. let me show you what the assets under management are for this stock. this is his recommendation, how he weights etfs. we won't show you the etfs individually. put it up here. stocks, i asked what do you have in the stock market right now. u.s. stocks, 17%. international developed market, 4%. 3% emerging markets. you don't look like you like emerging markets very much. why is that? >> well, we actually love emerging markets long term. in the sthohort term, there is d winds. china has a credit bubble and no one knows if it will unwind in a orderly fashion. also, when the fed tightens, it could draw capital out of emerging markets. >> this is very interesting. you have a weighting in short

corporate bonds but just a few, u.s. trips, u.s. treasuries, a little asian local market. why the short and intermediate emphasis? >> we have had 31 years of falling interest rates. if interest rates start to line we want to reduce the risk of people losing money. you don't want to get rid of all your long term bonds because in a recession or deflation, that's what really counts. >> let's go into the hard assets part, the cash part. very small cash, very small amounts in gold and commodities. the important thing is you still have belief that provides some protection. >> that's right. that's right. in a stagflation like the 1970s, stocks and bonds did bad but hard assets did really well. we think you have to own at least some of those. >> i want to point out you do have a small investment in real estate, about 4%, split 2% international, 2% in the united states. that's a very interesting part. i want to move on here and talk about your tactical part. you invest short term in where you think the market will go short term. this is the core of your ideology. i want to show it to you.

you are very heavily weighted in u.s. stocks. you have another 13% of your portfolio in u.s. stocks. japanese stocks, german stocks, uk stocks, again, nothing in emerging markets here. why the overweight in developed? this is where you are putting your money short term, too. tactical money. >> that's right. because the central banks in the u.s., in europe, in the uk, in japan, have enacted enormous stimulus programs and that's been the fuel feeding these markets. first in the u.s. and then in 2013, japan started to catch up, we began to overweight that in january, europe, we began overweight in june. >> your biggest worry right now, what keeps you up at night? >> china bubble deflating. europe deflation taking root. the middle east, instability. >> thanks very much. again, biggest etf manager in the world. this is where he's putting $18 billion. going to try to get him back, get more specific about what he likes and doesn't like in the near future. >> thank you very much. we can all check out more of

bob's great reporting at etf.cnbc.com. still ahead, herb is in the house and is coming up for a special edition of earnings squad. what if the red flag stocks are just about -- >> miracle of air travel. later on, why your heating bill is higher and why it's probably going to go up even more. we are digging in on natural gas and the renewed concern over how to transport it. look at that, following this dramatic pipeline explosion. we will tell you where that is and what happened. (vo) you are a business pro.

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welcome to the earnings squad. i'm melissa lee. joining me, kate kelly and look who made it back from san diego, herb greenberg. got to start off with u.s. steel. the company reporting after the bell today and a lot of people will be watching this simply because ak steel is also reporting after the bell and steel dynamics as well. this is the case of a stock, guys, that has seen a massive run. since the august lows, it's up about 94%. lot of analysts getting more and more positive on the stock as they see operational

improvements, ie raw material costs like coal and iron ore going down. the management team is energized, it's new and in place and we are seeing improvements there. the question is has it been factored into this stock which has had this tremendous run so far. >> there was a good story about this in the journal today talking about the competition from china. china almost equally good quality materials at comparable or better prices, plus we are still looking at a loss. it's just a question of how big. >> it's so much cost driven as opposed to top line. if you look at the top line, it's still going -- >> got to talk about american airlines. fourth quarter earnings tomorrow morning. kate, what are you watching for? >> the airlines in general have been a really great story. if you take a look at just an image of united, continental, southwest, delta, they beat analyst expectations for profit and revenue in all three cases and the same expectation applies here. people are looking for color, u.s. and american, first time reporting today. some people are super bullish on this stock. i was just reading to the effect

this is one of the stocks that could make you rich in 2014. because fuel costs are going down a bit, the seat capacity better managed. >> and the stock has already gone way up. i know people just waiting for this thing to really take a hit because this is one airline they want to own. if it can do a delta -- >> it was bankrupt and left for dead and there has been so much room for recovery. the question is how much more room. herb, you bring your greenberg magic touch to world acceptance year. third quarter earnings to be released. this caught your eye why? >> this was the stock we talked about, the company is an installment lender, consumer installment lender, has a 204% interest rate it charges its customers, sort of one step removed from payday lenders. keep an eye on quality. that has been declining the past few quarters. this has been a company that tried to keep its stock boosted up by stock buy-backs so you can expect talk on that. furthermore, see if anyone asks about the military lending act. in 2007 they banned

lenders on military bases. it would be a hit to their business. >> military members are getting socked with banks fees for overcharges and things like that. this is a growing cultural and social issue. that does it for us at the earnings squad. back to more morning squawk on the street tonight. >> thank you very much. should 800 sick people on a ship make royal caribbean investors nauseous? we will talk numbers on that stock. >> later on, get ready for good old-fashioned stock plays. we have stocks under ten bucks a share that your guest says are the best buy. some of the names. they will surprise you. i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app.

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happy monday, everybody. street talk time. let's talk stories and recommendations you need to know about. let's take a look at what's happening with twitter. this is really falling hard. >> well, you know my views on twitter. stock down to $58.08. mark faber has recommended

shorting the stock. he did that a few weeks ago. more to come on this story. watch this closely. >> mohawk. >> calhoun, georgia carpet maker, $170 target. it's about 20% more than the stock's trading at now. they think there will be more b biorelated synergies. upgraded at jpmorgan chase to overweight from neutral. >> stock number three, cisco systems. >> big call. downgraded to underweight, basically jpmorgan's version of sell. the target goes to 17 from 21. folks, that's about 20% less than cisco shares are trading at riefk now. they cite excessive valuation and weakness in emerging markets. lot of cisco owners not happy to hear that. >> real underperformer over the past year. barclays is also out with homes. >> kb homes and toll brothers down today, cut to underweight

from equal weight. toll reduced to equal weight. in the same call, the analyst was not completely bearish. he upgraded meritage homes to an overweight. >> okay. now to our daily segment. >> today, let's talk about royal caribbean. hundreds of passengers getting sick on a recent cruise. here's what royal caribbean's ceo had to say on cnbc this morning. >> we don't think it's going to have a big impact on our year. we just released our expectations for the year and they're looking pretty good. >> let's talk numbers. gina sanchez on the fundamentals, carter worth on the technicals. gina, first to you. we have seen this happen before with pretty much every cruise ship. it doesn't seem to impact cruising whatsoever. does this change your view on rcl? >> not at all. you're right, this happens on pretty much every cruise line and quite frankly, the cruise ship sector has been an amazing

play that's held up really, really well. but you know, the problem that i have with rcl, they have amazing positive fundamentals, they have their new cruise ship that's set to sail in november, the "quantum of the seas." everyone is really excited about it. it's a great value for cruise ship participants. but rcl is really expensive. over 130 times. there are cheaper ways to play the cruise ship sector. >> do the charts back that up, carter? >> the charts look quite good by my work. if you take a look at just the standard one year chart, the stock acts well which is to say it's outperforming not only the market but it's keeping up with peers such as the hospitality group, hotels, lodging, gaming. what's also really important here is how the stock is acting in relation to its 2011 high. if you look at the long term chart going back five years, this stock peaked in january exactly three years ago, in 2011, and plunged from 50 to 20. we have recovered all that lost ground.

here we are toying with the 50 level yet again and the presumption is after responding to the 50 level, the stock will exceed the 50 level. we are buyers here. we think it's got 57, 58 written all over it. >> maybe expensive. carter's a buyer on the technicals. guys, thanks very much. check out our online version of talking numbers, part of our partnership with yahoo! finance. still to come on "street signs," we will talk more about natural gas. it's spiking. my heating bill went like this. >> lot of other people's as well. paul hickey is here with his new list of top stocks under ten bucks. first, a big show ahead on the closing bell. kelly evans, why do we say big show? what have you got to back that up? >> it's always a big show. we have stocks largely in retreat after last week's big selloff but the question remains after the sharp decline we saw friday, what's an investor to do right now? we have an all-star team of money managers coming up. we have veteran investor john

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lot of red arrows around the world overnight. our markets earlier were falling prey but the dow and s&p are now holding their head above water. the dow is now up by 48 points. let's see whether it can keep on gaining into the close. brian? >> the best performer is cat. look at this video. pretty scary stuff. that comes from canada over the weekend. part of the trans-canada pipeline carrying nat gas from manitoba ruptured, igniting a giant fire. nobody was injured but nearby homes had to be evacuated. about 4,000 customers were left without heat when trans-canada had to shut off the gas that was feeding that fire. officials say an investigation is under way to determine what caused it. nat gas prices today, let's take a look at what they're doing, hovering around 4.88 after futures on friday soared

to their highest level in more than three years. new data from the cftc shows money managers are going all in on the nat gas trade. they are the most bullish they have been on futures since 2006. joining us is the president and ceo of breitling energy, a man who knows a thing or two about this space. are you bullish? >> i am. we saw retreat today a bit. >> just profit taking? >> i think so. i think the weather has been driving the fundamentals here. i think going into the end of winter, inventories will stay down. i think we might even reach a decade low on inventories. that creates some interesting things going through the summer into next winter as prices could stay high and that does translate to consumers. >> i will ask you the question i think everybody wants to know. we are bathing in natural gas. why are gas prices going up? >> it's interesting because i know the lead-in piece about the pipeline, in certain areas in

the northeast last week, natural gas cost over $90 per 1,000 cubic foot. so these pipelines moving gas around the country, we have bottlenecks and that's creating the dynamics of the pockets of high prices. >> is it safe in light of the pictures we were just seeing? >> it's the safest way to transport oil and natural gas. obviously not timely with the keystone pipeline decision coming and this happening. moving natural gas and oil in this country, pipelines are still the safest manner. >> we've had train issues as well. if you can't do it by train or pipeline, we are stuck. >> you got to move it. so you got truck, you got train or you got pipeline. the reality is that pipeline is still by far the dominant transport facility. >> higher prices bad for consumers. i can't speak for our viewers. my heating bills went like this. i thought the decimal had moved over one spot too many. here's the good news, i guess, is that higher prices are going to cause some of the shutoff wells to come back online. >> it will cause more supply to come into the market. >> which means prices should go back down. >> also, what you will see, we have seen from coal shifting,

going back to coal for power generation. we saw now reversing a two year trend as coal comes back on line being cheaper than natural gas. there is still more industry moving back to the u.s., pulling demand as well, and we have a lot of supply coming online with infrastructure and the marcellus. >> to brian's point, when will prices come back down? >> i think long term for this year, it's a $4 plus commodity. through the winter into the spring, we are going to see higher prices which will translate into higher heating costs for consumers. the reality is can we fix that and get the inventories back up before next winter, or will we see a prolonged increase in supply or prices due to supply and demand. >> a real pleasure. thank you for coming on. nice to see you. tim cook, ceo of apple, said that it was going to be an ipad christmas. was he right? up next, a top apple analyst lays out his predictions for apple's earnings which are due out after the bell.

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let's talk a little segment i am entitling best and worst.

we will give you the best performer of the s&p 500 and also the worst. the best one is that stock right there. if you can only hear and not see because you're on the radio, it's caterpillar, c-a-t. profit coming in ahead of expectations although listen, all you bulls, i get it. keep this in mind. lot of cost cutting going on at caterpillar. something to watch. on the flipside, the worst performer right now in the s&p 500, copy that. it is xerox, down 4.6%, 52 cents to $10.72. big trucks in, copiers out today. let's take a look at apple shares. they're up about 25% over the past 12 months. can they beat earnings expectations this afternoon? let's bring in our analyst. what's the most important thing to look out for? >> the march guidance. the reason is that since apple came out with their new guidance guidelines, their methodology, there is not as much whispers around the december quarter.

let's kind of mail in the december quarter and talk about guidance. that's the critical part here. most likely, they will probably guide a percent below the street, the midpoint, but since they typically beat the midpoint, i think you could actually see analyst estimates increasing by a couple percent tomorrow. i realize a lot of numbers confusing but that's going to be the key, the revenue guide for the march quarter. >> what about gross margin, gene? >> yeah. that's the second most important piece. for the december quarter, most are looking for about 37.5 which is the high end of what their guidance was. as far as the march quarter is concerned, it's probably going to be 36.5. the reason is that you have a lower mix of iphones which obviously is their most profitable. i think that's just generally stable and then you are obviously coming on the back half of the year with a lot of products this year so the setup's actually really good for the stock over the next six months. >> talk to us about the expectations for new products, because what i'm hearing is that finally, apple will try and keep up with the joneses or the kims,

because obviously the samsung larger displays are very popular. people are surfing the web more, they are doing all kinds of things, watching video on their little screens, so apple i believe wants to try and get bigger, finally. >> that's right. the research we have done, it's about a third of people in the u.s. say that they want a bigger phone, bigger iphone, that are iphone owners. there's definitely a market out there for a bigger factor. on top of that you have some of the expectations tim cook has put himself, the last couple earnings calls, he talked about new product categories in 2014. i'm sure there will be questions on the call about that. you put the combination of the bigger phone you're talking about along with a couple new product categories, the setup seems pretty good. at least the news flow for the back half of 2014. >> your price target is $640 with an overweight. thank you very much. we are all watching after the bell. >> thank you. time now for a little bargain hunting. a new list out from our friends

at bespoke investment group on their top stocks under ten bucks a share. cofounder paul hickey is with us here. we can't go through your entire list, plus you have your client stuff. we will give our viewers a taste of this. when i say taste, i mean what in the world are you doing recommending denny's? >> it's the home of the grand slam, sully. that's right up your alley. >> the rooty tooty fresh and fruity. that's herb's alley. i'm proved economy should help denny's breakfast. it trades at under 20 times earnings and it's forecast to grow earnings in double digit percentages the next two years. >> we got into financials, cowan group for under ten bucks. >> when you see a strong equity market like we saw last year, these smaller tier investment banks, they get more business, and the bigger banks don't have quite the cachet they used to have, so a company could you

wans getting increased revenues as you see the market do well and continue to do well as we think it will do notwithstanding this last weak period. we think cowen will benefit. they shifted profitability. >> i didn't want to start off with the next stock. this next stock was 20 cents five years ago. considered one of the worst run retailers out there, had been. rite aid. it went from 20 cents to $5.40 so people have gotten rich, but do you believe they have really turned it around? because this company's stock chart has been heart attack inducing for about 15 years. >> yeah. you know, it's the ugly stepchild to cvs and walgreens. they have a ton of debt which they've -- they're working themselves out of, but they've been remodeling some stores. their sales are improving at a

faster pace relative to their peers and the affordable care act you're going to see stronger prescription drug growth in prescriptions and that's going to be benefiting all three of them, even the worst viewed companies out there. >> and another one you have is monster worldwide. despite all the past concerns about energy drinks. we have to leave it there, unfortunately. thank you very much. we're going to take a quick break. we have herb who just sat down. we have one of his favorite stocks coming right up. became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade.

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we got some news coming out in relation to herbalife. scott wapner i'm looking down at nigh screen. herbalife shares are spiking. >> stock is up more than 6%. there's a new development in the story. analyst tim ramie of d.a. davidson, he is without question oneherbalife's biggest bulls, he's leaving that term for another opportunity. i have an idea what that turnt is, i'm not ready to go on the air with what that is. the biggest news is ramey is leaving davidson. this is big ackman's nemesis in many regards. he has on many occasion defended that stock under varying circumstances. today we see it moving up.

now it's up more than 9%. herb, you're there, right? >> i'm here and some would say he's my nemesis as well. >> he's been on this show a lot. you guys have gotten into it big time. >> we've gotten into it. if he's leaving it really depends where he's going. is he leaving -- you know -- >> he says, herb, in a letter i have in front of me right now that he is going to do some consulting on strategy, m&a, and corporate development for a significant company working with executives where i have had a long and productive relationship. there has been many questions, as you know, as to what the next step in the herbalife story is going to be, whether it is a buyback of some scale, whether it is a take private transaction -- >> hey, i'll tell you right now with the stock having been hit, i would expect the company would come out and talk about a buyback by now. new skin is up 6% as well.

the stock cannot be up because tim ramey is leaving. >> the stock should be down because he's living because as scott said, he's one of the most bullish analyst and most vocal out there. now from my point of view, guys, herbalife which needs a defender, has now lost one of its biggest public defenders on the sell side and in the media. >> brian, i think when you find out ultimately where ramey apparently is going, it may shed some light on why the stock is reacting the way it is. i'll just have to leave it somewhat vague like that, but i think there's more to the story and we'll understand it completely. >> let's hope it doesn't call into question the independence of his prior coverage. >> scott, i'm sure there's more on this story. herb, what's your two cents worth? >> it was down so much. with these stocks i don't know. look, the stock is off from its highs in a big way. people looking for reason --

>> listen, ramey -- i don't know where he's going to go. he's clearly going to a hedge fund or something like that, right? you unless he goes to work for the company itself. wouldn't it be great if ramey joined pershing square, worked for ackerman. that wapner tease was good because scott has a relationship with ackman. if scott knows, maybe it's icahn, maybe it's ackman. >> scott has relationships with everybody. >> i know, but given his relationship -- maybe tim ramey is going to work for carl icahn. i'm trying to think who scott would know that would know that. >> i'm just sitting here -- >> whatever it is, it's a damn good tease. it is a good tease. now i'm interested. >> it's a very good reason to stay tuned to cnbc because all will be revealed recently. >> scott should hold that for his show tomorrow. >> that's what he's doing. >> he's not doing ge"the closin bell"? >> scott wapner is not just a fraet face.

we're fountain dar days away fr crowning a winner of the stock draft. you are not even close to having a good team like scott wapner. what about keeping your mouth should so people tune in on friday. >> tune in to find out who wins by a ton. i will say this. it's been a good stocks draft. i'm still bitter my personal pick of best buy we didn't extend it. i would have clearly crushed everybody in that pick, but our viewers should tune in, a, just to see the trophy. >> it's spectacular. about the same height as me. >> the figurine on top takes it above your -- it's 5'2". >> i have to tease my hair just a little bit higher. >> is that possible? let's get a quick check on the markets. we have a big close going up. a little easier today. we're up 55. a lot of emerging markets turmoil thankfully calming down a bit today but it does not

mean, mandy, that everything is fine in em world. >> it do you see not mean everything is fine, but, of course, we'll continue to watch this story. in the meantime, thank you very much for watching "street signs." "the closing bell" is coming up next. scott wapner is out there, too. stay tuned to cnbc. and welcome to "the closing bell" at this hour. i'm kelly evans at the new york stock exchange with scott wapner. >> i'm in for bill griffeth today. this is not the snapback rebound investors were looking for after a very ugly finish to last week. feels like things have stabilized a little bit more but the buyers are not coming out en masse yet even though the dow from being down 80 or 90 points is positive by 50. >> the action midday did not look so good. now the s&p 500 has turned slightly positive, so it isn't just caterpillar which is pushing the dow up 50 points at the moment, although that's certainly the lion's share of it. so coming up, we'll get some