world war ii era in which the asia region has been able to stabilize and the conditions in which china was able to grow so rapidly were maintained, and we're very proud of the work that we did after world war ii to help rebuild both asia and europe, to help establish the international norms and rules that facilitated growing global trade and connections and travel and interactions and to help maintain the peace. since i have been president, my

goal has been to consistently engage with china in a way that is constructive, to manage our differences and to maximize opportunities for cooperation. and i have repeatedly said that i believe it is in the interests of the united states to see china grow, to pull people out of poverty, to expand its markets because a successful and stable and peaceful china can then serve as an effective partner with us on a range of international challenges. last night during our discussions, i mentioned to president xi that as powerful as the united states is, the nature of the biggest challenges we face, things like climate change

or terrorism or pandemic or refugees, those are not issues that any one nation alone can solve, and we recognize because of our strength and the size of our economy and the excellence of our military that we can play a special role and carry a larger burden, but we can't do it alone. china, despite its size, still has development challenges of its own, so it can't solve these problems alone. we have to work together. we have to cooperate, and i think that can happen as long as we continue to recognize that there's a difference between friendly competition, which we have with some of our closest friends and allies like great britain or germany, and competition that tilts the playing field unfairly in one direction or another. that's typically where tensions

between our countries arise is our desire to uphold international norms and rules. even as we recognize that we need to update some of these international institutions to reflect china's growth and strength and power. so president xi mentioned imf reform, that's an area where we fully support and want to implement a greater voice and vote for china in that institution reflective of its strength. the same will be true when we go up to the united nations on peacekeeping initiatives. china's able to project its capabilities in a way that can be extremely helpful in reducing conflict, and in all of those issues as well as education, science, technology, we think

that the opportunities for cooperation are there as long as there's reciprocity, transparency, and fairness in the relationship, and what i have said in the past to president xi is that given china's size, we recognize there's still a lot of development to be done and a lot of poverty inside of china, but we can't treat china as if it's still a very poor developing country as it might have been 50 years ago. it is now a powerhouse, and that means it's got responsibilities and expectation this is terms of helping to uphold international rules that might not have existed before. and that is something china should welcome. that's part of the deal of being on the world stage when you're a big country, you've got more to do. my gray hair testifies to that.

julie davis. >> reporter: thank you, mr. president. i know you said you didn't want to prejudge the next speaker, but i wonder if you could tell us what speaker boehner's resignation today tells you about the republican party and your ability to work with congress in the remainder of your term, particularly since it's coming at a time when you're trying to negotiate to avert a government shutdown. does this make that easier or harder, and do you think that you will be able to move forward with the congress on priorities like the budget, planned parenthood, and immigration that you weren't able to address with speaker boehner and his position? and for president xi, you've experienced an economic downturn in your country with the stock market crisis, and investors globally have been concerned about some of the actions you have taken to intervene in the stock market and with the currency exchange rate. i wonder if you could say what you told president obama or what you can say today to restore

confidence that these interventions will not have spillover effects into the global economy in the future. thank you. >> well, julie, i meant what i said, i'm not going to prejudge who -- how i'll be able to work with the next speaker, because i don't know who the next speaker is, and i suspect that there's going to be a lot of debate inside the republican caucus about who they want to lead them and in what direction. it's not as if there's been a multitude of areas where the house republican caucus has sought cooperation previously, so i don't necessarily think that there's going to be a big shift. i do think that speaker boehner sometimes had a tough position because there were members in his caucus who saw compromise of

any sort as weakness or betrayal, and when you have divided government, when you have a democracy, compromise is necessary, and i think speaker boehner sometimes had difficulty persuading members of his caucus of that. hopefully they've learned some lessons from 2011, the last time that they sought to introduce a nonbudget item into the budget discussions. at that time it was obamacare and they were going to shut down the government for that purpose. it ended up really hurting the economy, slowing it down, and caused a lot of hardship and a lot of problems for a lot of people. because it turns out actually government provides a lot of vital services. our military provides us

protection. our agencies keep our air clean and our water clean and -- >> we're going to break away from the president for a few moments while we listen to john boehner who has announced his resignation from the house and speaker effective at the end of next month. >> -- less costly and more accountable government. and over the last five years our majority has advanced conservative reforms that will help our children and their children. we're now on track to cut government spending by $2.1 trillion over the next ten years. we made the first real entitlement reform in nearly two decades and we've protected 99% of the american people from an increase in our taxes. we've done all of this with a democrat in the white house. so i'm proud of what we've accomplished. but more than anything my first job as speaker is to protect the institution. a lot of you know that -- now

know that my plan was to step down at the end of last year. i decided in november of 2010 that when i was elected speaker that serving two terms would have been plenty. and -- but in june of last year when it became clear that the majority leader lost his election, i, frankly, didn't believe it was right for me to leave at the end of last year. so my goal was to leave at the end of this year. so i planned actually on my birthday, november 17th, to announce that i was leaving at the end of the year. but it's become clear to me that this prolonged leadership turmoil would do irreparable harm to the institution. so this morning i informed my colleagues that i would resign from the speakership and resign from congress at the end of october. now, as you have often heard me say, this isn't about me.

it's about the people, it's about the institution. just yesterday we witnessed the awesome sight of pope francis addressing the greatest legs lay at this b -- legislative body in the world and i hope that we will all heed his call to live by the golden rule. but last night i started to think about this, and this morning i woke up and i said my prayers as i always do, and i decided, you know, today is the day i'm going to do this, as simple as that. that's the code i have always lived by. if you do the right things for the right reasons, the right things will happen. and i know good things lie ahead for this house and this country and i'm proud of what we've accomplished, especially proud of my team. you know, i have been here -- my 25th year here, and i have succeeded in large part because i have put a staff together and a team together, many of which have been with me for a long

time. and without a great staff, you can't be a great member and you certainly can't be a great speaker. i'm going to thank my family for putting up with this all these years. my poor girls who are now 37 and 35, their first campaign photo was in july of 1981, and so they've had to endure all this. it's one thing for me to have to endure it, i have got thick skin, but, you know, the girls and my wife, they've had to put up with a lot over the years. let me express my gratitude to my constituents who have sent me here 13 times over the last 25 years. you can't get here without getting votes. but -- and i said this often, people ask me what's the greatest thing about being

speaker? or about being an elected official? and i said, well, it's the people you get to meet. you know, i have met tens of thousands of people in my own congressional district i would never have met other than the fact i decided to run for congress. and over the years as i traveled on behalf of my colleagues and the party, i have met tens of thousands of additional people all over the country. and you meet rich people, you meet poor people, you meet interesting people, and probably a few boring ones along the way. but i can tell you that 99.9% of the people i meet on the road anywhere could not be nicer than they've been. it's been -- it's really been wonderful. it's been an honor to serve in this institution and with that, all right, junior, go ahead. >> speaker boehner, you were noticeably overcome with emotion yesterday --

>> really? what a surprise. >> i'm curious, you reached this decision last night, if the grace of pope francis led you to this decision? >> no, no. yesterday was a wonderful day, it really was, and was i emotional yesterday? i think i was. i was really emotional in a moment that really no one saw. as the pope and i were getting ready to exit the building, we found ourselves alone, and the pope grabbed my left arm and said some very kind words to me about my commitment to kids and education. the pope puts his arm around me and kind of pulls me to him and says, please pray for me. well, who am i to pray for the pope? but i did.

[ inaudible question ] >> it was never about the vote, all right? there wasn't any doubt about whether i could survive the vote. i don't want my members to have to go through this. i certainly don't want the institution to go through this. and so especially when, you know, i knew i was thinking about walking out the door anyway. so it's the right time to do it and, frankly, i am entirely comfortable doing it. >> mr. speaker, i have heard you say before that a leader who doesn't have anybody following him is just a guy taking a walk. >> right. i have plenty of people following me, but this turmoil that's been churning now for a couple of months is not good for the members and it's not good for the institution, and if i wasn't planning on leaving here soon, i can tell you i would not have done this. >> if i may just continue, there are people who are on the right in your caucus and even outside of this institution who have been wanting you to step down for some time who feel that they

have a victory today. do you feel that you were pushed out? >> no. the members -- i'm glad i made this announcement at the conference with all of my republican colleagues because it was a very good moment to help kind of rebuild the team. listen, i feel good about what i have done. i know that i every day have tried to do the right thing for the right reasons and tried to do the right thing for the country. >> speaker, how can this not be a moment of turmoil. you said you thought about leaving two years ago after cantor. we have to keep the government open in a couple days, debt ceiling. there's going to be one -- >> i am going to be here for another five weeks, and i'm not going to leave -- i'm not going to sit around here and do nothing for the next 30 days. there's a lot of work that needs

to be done and i plan on getting as much of it done as i can before i exit. >> as a result, does it make it easier in some ways to make some tougher decisions maybe relying on democrats to keep the government open next week? >> i will make the same decisions i would have made regardless of this. >> mr. speaker, you have made no secret of your frustration with some members of your far right flank and some outside groups. you have used words like knuckleheads and some other words we probably can't use on televisi television. have you just had enough and how will anything be different for the next speaker? >> let me tell you, i would not describe it as having had enough. and that's not it at all. when you're the speaker of the house, your number one responsibility is to the institution, and having a vote like this in the institution i don't think is very healthy. and so i have done everything i

can over my term as speaker to strer strengthen the institution. frankly, my move today is another step in that evident to strengthen the institution. >> won't the next speaker face the same thing? >> hopefully not. >> that's my question. how will washington be different because you leave this institution? what should people watching this expect the house and congress to do going forward if you're not here? >> well, if the congress stays focused on the american people's priorities, there will be no problem at all. and while we have differences between democrats and republicans, the goal here as one of the leaders is to find the common ground. listen, i talked to president bush and president obama this morning. i have talked to all my legislative leaders who i have a very good relationship with all of them, because at the end of the day the leaders have to be able to work with each other, trust each other to find the

common ground to get things done. and so if the congress stays focused on what is important to the american people, they'll get along just fine. >> can you tell us how your conference reacted to the news? >> oh, i'd say they were shocked. surprised. >> can you elaborate a little more on that? maybe how the leadership itself reacted. >> i told mr. mccarthy about two minutes before i spoke what i was going to do. i had to tell him five times because he didn't believe me. i said you better believe me. >> could mccarthy be the next speaker? >> listen, i'm not going to be here to vote on the next speaker, but that's up to the members. but having said that, i think kevin mccarthy would make an excellent speaker. >> who is the first person you told and what did they say? >> well, i told my wife. >> what did they say? >> she said good.

i told my chief -- my chief of staff and i talked late yesterday and i told him i was thinking that today might be the day, and i told him i'd sleep on it. so before i went to sleep last night, i told my wife, i said i might just make an announcement tomorrow. what do you mean? what kind of announcement? i might just tell them it's time to go. so this morning i woke up and walked up to starbucks as usual and got my coffee and came back and read and walked up to pete's diner and saw everybody at pete's and got home and thought, yep, i think today is the day. so my senior staff was having a meeting at 8:45, and kind of walked in before i opened the house and told them this is the day. it's going to happen some day, why not today? >> do you know when the next election might be held? >> i don't. paul? >> what advice will you give

kevin mccarthy based on your five years, what advice do you give him to avoid the same pitfalls that you have come across? >> well, i'll tell kevin if he's the next speaker that his number one responsibility is to protect the institution. nobody else around here has an obligation like that. secondly, i'd tell him the same thing i just told you. if you just do the right thing every day for the right reasons, the right things will happen. you all know me. my colleagues know me. i'm always straight with them. you know, they may not like the answer they get, but they'll get an honest answer every single time they come to my office. it's just an easy way for me to do my job. >> you originally planned to announce this on your birthday? if it wasn't the pope, what factors sort of weighed on your decision to do this now? >> just all this stuff i read about in the paper and, you

know, i really don't want the institution hurt and i don't want my colleagues hurt. i don't want -- i don't want to put my colleagues through all this. for what? so yes? >> what are you going to miss? >> pardon me? >> what will you miss? >> what will i miss? of course, all of you. i don't know what i'm going to miss because i haven't missed it yet, but i'll certainly miss the camaraderie of the house. let me tell you another story that was really kind of interesting. maxine waters and i, democrat from southern california, came here 25 years ago in the same class. now, you know, there's nothing about my politics and maxine waters' politics that even anywhere close, but yesterday about 5:30 she called my office. i got a note she called so i called her back, and she said,

you know, i have watched you for 25 years here, we came here together and watched your career, and i watched you today and she says i just want to tell you something, i'm really proud of you. you know, listen, i have got the best relationships on both sides of the aisle because i treat people fairly and treat them honestly and -- but i'm going to miss -- certainly miss my colleagues. >> thank you, mr. speaker. to go back to the theme of trying to take turmoil out of the house and stabilize the institution, how do you think that it can become more stable. so many republicans i talk to today said they don't think a new speaker will mean any new outcome, especially with an unprecedented -- how could it become more stable? >> as i mentioned earlier, the fact that i did this with my colleagues this morning, then we proceeded to have an hour and a

half conversation, i thought was a unifying moment, and between that and the pope's call for living by the golden rule yesterday, hope springs eternal. >> mr. speaker, can you talk about what you think your legacy is as you're leaving? what are your most important accomplishments and what are you going to do to november 1st? are you moving to florida? >> i was never in the legacy business. you all heard me say it, i'm a regular guy with a big job, and i never thought i'd be in congress much less ever be speaker, but people know me as being fair, being honest, being straightforward, and trying to do the right thing every day on behalf of the country. i don't need any more than that. >> speaker boehner, you seem very relieved in the your speech

right now. what are your plans next and also have you talked to -- have you spoken to -- >> when you make a decision this morning, you haven't really had any time to think about what i'm going to do in the future. i have no idea, but i do know this, i'm doing this today for the right reasons and you know what? the right things will happen as a result. thanks. >> have you talked to nancy pelosi at all? >> yeah. >> speaker boehner on his farewell press conference on a day that shocked his republican caucus. he announced a decision he made, he says, this morning after some deliberation to resign from the house and step down as speaker. in his words to save the house and his colleagues from the irreparable harm that he saw looming if he were to continue in that role and have to lead

his caucus and a fractious house through some of the controversial items that are on the agenda immediately, most especially the potential over the next few days for a government shutdown and then looming debates over the extension of or the revision of the debt ceiling. he called himself a regular guy with a big job. he said he's not a legacy guy. he did say this was a decision that he had been thinking about for a long time, that his initial intention was to resign at the end of last year, but then when majority leader -- when the majority leader stepped down because he lost in a primary, he decided that it would not be constructive for him also to leave the leadership ranks at that time but that he intended to leave at the end of this year, but then after yesterday, a day where his countrymen saw him very emotional as he hosted the pope

for the joint meeting of congress and then appeared on the capitol balcony with him, he decided this morning wag a good ga to do it and that is what he decided to do. so he says he didn't feel pushed out, and he will be making the same decisions regardless of whether will be in the house or not over the next few days. he thought that he would just be basically sparing the country and the house of the turmoil that could come. we'll talk more about this. he will leave congress october 30th. meantime, at the same time that speaker boehner was giving his remarks, the president and chinese president xi were having a press conference in the rose garden. we broke away from that but michelle caruso-cabrera was there and stayed plugged in. tell us what we missed, michelle. >> so, tyler, president xi answered two questions from american reporters today. one about cyber security and one about the state of the chinese

economy. i'll tell you back in 2011 when his predecessor hu jintao was in the very same position and an american reporter asked president hu about human rights, he ignored that reporter and when a second reporter said can you please answer my previous colleague's question he pretended he didn't understand, that there had been technical issues. it was awkward. we had none of that awkwardness today with president xi. that being said the two questions he was asked, which were spot on, very relevant to the moment, cyber security and also the economy, he's already quite rehearsed on. if you read "the wall street journal" interview as they called it when it was actually just written questions he responded to, they insist it was he who answered them, he's already responded to these questions in some form or fashion and in the speech he made in seattle the other night had already addressed a lot of these issues and he reiterated a lot of what he said. they're not going to do competitive dough valuatievalua

yuan to improve exports. yes, they have headwinds but they're working on it. they needed to intervene in the stock market there to prevent systemic risk, et cetera. so stuff we had already heard before, but the moment that many were wondering would president xi actually take questions from the american press corps, yes, he did. there is clearly tension between the two gentlemen about cyber security. president obama said we know that there is, you know, hacking being done of intellectual property of private companies. i told him that has to stop. and then in a follow-up question, president obama on cyber security said, okay, we've got an agreement today and they did put out a joint statement that they agreed not to steal intellectual property, but he said now we have to see actions. will words be put into actions. i don't know if there was a tone of cynicism but he really wants to see if this will be the truth from the chinese at this point when it comes to potentially government hacking of u.s.

companies and their intellectual property. back to you. >> they can grandstand as much as they like but we have to actually see some action, as you say. thank you very much for the wrap up there, michelle caruso-cabrera. let's get some breaking news with hampton pearson on volkswagen. hampton? >> mandy, the u.s. justice department confirms to cnbc that it is launching its own emissions-related investigation into volkswagen and those charges essentially that it had devices on its cars designed to defeat emissions tests of one kind or another. earlier in the day also here in washington, the environmental protection agency announced it was expanding its probe beyond volkswagen and sending out letters to all u.s. auto manufacturers -- or all auto manufacturers that it would be stepping up its emissions testing regime as well. also from germany, volkswagen as expected announcing that matthew

matthias -- mattias muller, excuse me, he is going to do everything he can to win back the trust. he said we stand by our responsibility. carefulness is even more important than speed and the company would introduce even tougher compliance rules in the days ahead. the lead here, the doj, department of justice, launching an investigation into those volkswagen emissions problems. >> hampton pearson, thank you very much for that breaking news. let's take a look at what the markets are up to while john boehner was giving a news conference about his resignation as speaker of the house and from congress. we did see stocks move to their highs of the day. which is ever so slightly off those highs. the dow is up by 1.4%, 226 points. the s&p is up by about 0.8%. the nasdaq percentagewise is a little less than that but we're holding in positive territory

and pretty much over the week despite the various gyrations, we're find of flat. little changed over one week. we'll be right back after this quick break with more on what's happening on this positive day in the markets. this just in: 50 million customers' data was not compromised this morning in a security breach that didn't happen. wall street. not rattled. at all. no. not at all. not at all. i mean, look at the day. sir. sir. what went right? what went right? everything. thank you. with threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. my dad's company wasn't hacked today. cool.

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hello, everybody. i'm sue herera. here is your cnbc news update at this hour. switzerland's attorney general's office says that it has opened criminal proceedings against fifa president sep bladdtter fo misappropriation of funds. the london-based trader accused by american authorities of market manipulation that helped cause the 2010 wall street flash crash arriving in court today to fight extradition to the u.s. to face trial. he has been indicted by a u.s. federal grand jury on 22 criminal counts. hyundai is recalling nearly a half million mid-sized cars in the u.s. due to a critical engine problem. the recall involves 470,000 sonata sedans from the 2011 and

2012 model years. and one of the world's wealthiest people, a chinese real estate mogul who was at the center of a democratic campaign fund-raising scandal 20 years ago, has been arrested and held without bail in new york city. he has been charged with lying about his plans for $4.5 million in cash that he brought into the u.s. over several years aboard his private jets. that's the cnbc news update this hour. back to you, ty. >> thank you very much, sue. let's bring in steve odland, former ceo of office depot among other companies. steve, we want to get your reaction right off the top to the news out of washington today with respect to china, and most especially protections of intellectual property and the issue of cyber crime. china making rather benevolent noises that they weren't going to countenance any enterprises engaging in this? do you believe them?

>> i'm glad they said it because if they hadn't said it would have been worse. our relationship with china is very complex. they are business partners. they provide a tremendous amount of manufacturing, inexpensive manufacturing for all of our companies. they ship us goods that enhance our quality of living. they're allies in a dangerous neighborhood, russia to the north, north korea, the middle east, but they're also geopolitical foes. they're out there on the islands building bases. they've got warship this is our waters. they're threatening us. they steal a lot of our stuff. 30% of the global hacking is done by china. 70% of intellectual property theft is china. 95% of all counterfeit goods that come onto our shores comes out of china. so it was really necessary for us to say, if you want to be the adult player in the world in this modern world, you have to act like one and you need to follow the rule of law, and i think that that was the conversation that happened, and i'm really happy that president xi said what he did. now, the question is -- >> will they follow through and how will we know whether they

are doing what they represent they say they will do. let's transition here as the time goes by quickly here to volkswagen. this is a company that is in crisis. how does a company like -- one this large repair its reputation and protect its brand? >> well, this is very interesting. they've named a new ceo, muller. he's coming in from inside the company which i think is actually good because he's been with the company a long time. he knows all the people. but this was not a rogue employee or an engineer who made a mistake. this is a systemic -- >> this is more systemic that be th -- than that, absolutely. >> he's got to deal with years of lawsuits, the regulatory issues, but more importantly where do the processes break down and how does he transform that culture to make sure nothing like this or anything else like this ever happens again. that is a huge job he has before

him. they've taken out more people today. they're bleeding -- >> this is their version of the bp oil spill. >> it's even bigger because it goes -- that was a mistake. that was an accident. this is not an accident. >> no, no, no, this was deliberate deception. love the orange tie. we'll be back on a rally day in the equity markets. stay with us, this is "power lunch" on cnbc. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here, we're here, and we've got your back. legalzoom. legal help is here. ♪ ♪ (under loud music) this is the place. ♪ ♪ sustainable tea tree eir boil and kale...ade from you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing, you see what's coming next. you see opportunity. that's what a type e* does. and so it begins.

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welcome back to "power lunch," everybody. i'm mandy drury on the floor of the new york stock exchange. just when you thought it was going to be a lazy friday, think again. lots and lots of things happening today, including we've got a nice rally going on in the dow and the s&p. the dow is currently up 1.4%, off its best levels of the day but still up 225 points. the s&p is up by 0.8% or 16 points. let's get to bob pisani who has been patiently waiting keeping me company here on the floor. bob, is this a thank you, mist

yellen moment? >> i think she's the biggest component. the s&p 500, we've been quietly moving up. we moved up as mr. boehner was speaking. look at the internals, 3 to 2 advancing to declining. the volume is only on the moderate size but i think yellen clarifying her stance is the key factor in the particular rally that we are having today. another big factor is the whole german auto situation. i think there's been some relief in germany over the volkswagen scandal. daimler denied its manipulated emissions. bmw, the german magazine that said they might be manipulating their exhaust systems has retracted that. there's some relief rally in germany. volkswagen is still to the downside as you can see. in terms of sectors, financials, consumer staples, and technology leading the way. >> and energy looks like it's positive, too, crude moving higher as well. tyler, over to you. >> after a visit to washington,

pope francis in new york again today. he'll head to philadelphia tomorrow and everywhere he goes, he leaves a huge economic impact. mary thompson is on the story for us. mary, apart from his humility and his humanity, the thing that stands out to me about pope francis is his stamina. he is really, really a strong cat. >> it is amazing for someone who is 78 years old to do this trip the way he is doing it. you know, tyler, the pope left ground zero just about an hour ago where he met with the families of fallen first responders and participated in an interfaith service. he called ground zero a place where grief is palpable and yet he said in the wake of the 9/11 terrorist attacks, new york was at its best. >> translator: at that time it wasn't about blood or neighborhood or religion or political views. it was a matter of solidarity. >> the pope asking attendees to

pray for peace. his address this morning to the general assembly urging leaders to take concrete steps to protect the environment and not impose crippling debt burdens on a developing economy. he says that hurts the poor most of all. this afternoon the pope travels to a school in east harlem and anthony motorcades through central park on his way to a mass at madison square garden. now, many, of course, are seeing a spiritual lift from the pope's visit, but he also is giving an economic lift to at least one city. philadelphia, which is also hosting a world festival of families, says the pope's visit will bring an additional $417 million into the city in large part because 2 million people are expected to attend that outdoor mass on sunday. here in new york and washington, d.c., the impact a little less again because he isn't drawing or attending a major outdoor event like that one. back to you. >> all right, mary. thank you very much. mary thompson reporting and covering the pope so well for us all week long. we're going to take a quick break as the dow is up

230-some-odd points. the s&p up about 15. we'll be right back with more "power lunch" after this. at the trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.

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john harwood sits down with some of the most powerful people

in politics, part of his speak easy series. today we get to hear from former florida governor and republican presidential candidate jeb bush. john is live in washington with that story on what a busy news day. john? >> crazy news day, tyler. i sat down with jeb bush to talk about tax policy and in particular how he sifted the evidence of recent presidents, including the experience of his brother george w. bush. >> do you regard your brother's economic tenure which pursued a broadly similar strategy to what you're proposing as a proofpoint that this strategy works? >> he was impacted by some big secular events, the tech bubble, the 9/11. it's hard to tell what part of the economic policy drove economic -- because there was growth in the middle of his tenure after the recession. >> growth, not great job growth or wage growth but there was

growth. >> there was growth and there was job growth. wage growth has been flat for a long time in this country. we have this big challenge that we have to fix. growth by itself isn't going to create higher wages, but higher growth will create more wage growth than no growth and if you do it in the right way where you're putting money in people's pockets, which is important, you can create economic activity. >> griffiven the trend toward ie inequality and deficits, why would you take the risk of a policy that confers a huge proportion of its gains in the immediate sense on people at the top of the income scale, and if it doesn't have the growth effects you're talking about, would substantially increase the deficit. >> the broad tax policy that we're proposing does the opposite of what you're suggesting, which is it provides tax relief for the middle class. everybody freaks out about the deficit. i worry about the deficit, the structural deficit for sure, but

if we grow our economy at a faster rate, the dynamic nature of tax policy will kick in. >> what does eliminating the estate tax, how does that help anybody's right to rise? >> well, it means that a family won't lose their business. we're not -- >> but that tax only applies to people who have made it big time. they've risen. >> or they're dead. they've risen. hopefully they're up there. what we've suggested is that an asset, a family asset, doesn't get taken away. that allows for second generation businesses to continue to flourish. when i campaign, there are a lot of people -- maybe it's just because of my campaign, i don't know, but i don't see a lot of big corporation guys hanging out in the political process. i do see a whole lot of family-owned businesses that are created a lot of vitality in communities and having an onerous tax code, you know, creates problems. yeah, we have an exemption, but

there's people have earned this through good fortune and a lot of hard work and taking risks and i don't think you should take that away from them. >> and you see there jeb bush has got a little humor there to go with that $100 million in super pac money, and he hopes both will wear well along the campaign trail over the next few months, guys. >> john, thank you very much. please don't forget to tune into the next republican presidential debate which is going to be hosted by cnbc right here on cnbc. the day, october 28th. mark your calendars, folks. "power" is back in two minutes. awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks.

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what do janet yellen, the pope, the president of china, and john boehner all have in common? they're all part of the next hour on cnbc. we have more on this yellen-sparked stock rally and whether it can continue. plus what john boehner's exit means for your money and the threat for another government shutdown, and if an edict by the pope is going to force the catholic church in america to give up a big revenue source. very interesting story on that ahead. plus, more on this market rally. mandy, i will send it down to you downtown. >> when you talk about market rally, it's really only happening in the s&p and the dow. take a look at the nasdaq.

the nasdaq you can see there while positive is certainly from a percentage perspective underperforming the other two indices and one of the problems here is health care is underperforming and that underperformance is being driven by the biotechs. let's bring up another board, thei ibb, currently in bear market territory, down 21% from its 52-week high. if you look at the constituents of the ibb, when you look at those with a market cap of $500 million or more, 96% of them are in correction territory or worse. so certainly it has been very difficult for the biotechs recently. the ibb currently down bib 3% on what is otherwise an up day overall. >> mandy, thank you very much. house speaker john boehner announcing that he will resign from congress at the end of the october. and we're here to talk more about that is our friend larry kudlow and john harwood. john, how big a surprise was this? mr. boehner said he wasn't

pushed, number one. he said it wasn't a question of him having had enough. what do you think? >> it's a big surprise to me. i think he had had enough, and he indicated at his press conference that he had planned to retire at the end of 2014. you know this, was a recurrent question that i and others put to the speaker's aides over the last several years as he was grappling with an unruly caucus including a cadre of members who had unrealistic expect tagsesat what he could actually accomplish, whether he might try to walk away and get a few things done before he left. they all said, no, no, he's not going that. he said, yes, i was going to do that at the end of 2014 but i didn't step down because eric cantor was defeated and i thought the house needed stabili stability. there were a couple very good capitol hill reporters like our friend robert costa who were hanging in the capitol last night having heard some rumors that he might be leaving, and

they tried to ask him about that. they got some interesting body language and hint from john boehner that this might be coming but i don't think anybody explicitly called this happening today. >> let's talk about a couple of the sort of issues that are out there. one is the idea that there might be a government shutdown next week. i heard john say earlier today and others have echoed it that the fact that mr. boehner will be stepping aside may well make the possibility of a government shutdown less likely because he will be more free to accept the help of democratic votes to get a so-called clean continuing resolution through. do you follow that line of thought, larry? >> i'm not sure, all right? i want to just put in a potential contrary point of view. that strategy, as you noted, relies on democrats, okay? he only needs 30 or so republicans. they don't know that yet. for example, nancy pelosi wants the xm bank to be reauthorized.

the conservative faction that upset the apple cart with john boehner -- >> mr. hensarling along themong. >> a really key player, they do not want to reauthorize the xm bank. that may be a sticking point. the other issue that's still out there, we don't know how they're going to handle planned parenthood. look, the conservative group wants one of two things. either they want to use budget reconciliation, which at the senate level would be 51 votes, not 60, if they want to do that for planned parenthood or they want to do it for a rollback of obamacare in its entirety. there's an internal debate going on inside the conservative freedom caucus about that. it is not resolved. what i'm saying is you could argue the odds of a shutdown next week have gone down, but that relies on democratic votes, which are not yet certain. >> and john -- >> but, tyler, neither one of those things larry just pointed

to are going to happen. they're not going to repeal obamacare. in fact, they may have a vote to do it, and they're not going to cut off funding for planned parenthood. there simply isn't the underlying support in the country to do that and that ultimately is what we're talking about. we're talking about a group of members in the house who have dreams of enacting policy which they don't have the political support in the country or in washington to make happen and that's true of those two things. >> i agree with that, john. i'm not predicting outcomes. what i'm doing is predicting the thinking of the conservative caucus which has gotten heavily involved. look, at the end of the day, sure, you're going to be right. look, at the very end of any of these days the president is going to veto that stuff and they can't override, but you know, joshn, this is the season of great unrest and trufrustrat among the republican grassroots and the argument they're making is the leadership in the house and senate, we elected you, what have you done? did you put bills on the

president's desk to repeal obamacare for an omnibus energy bill, for tax reform? no, and they're furious and that he helping to fuel the outsiders. >> let's spin the calendar forward beyond -- if many people believe that this makes a government shutdown less likely for the reasons we just talked about, let's spin the calendar forward to december 11th which is the date on which the debt ceiling has to be raised or the government could potentially go into default. does it make -- does his departure, john harwood, make that battle more fractious and contentious? >> i don't think it makes it more fractious. it might make it somewhat less because the scalp has already been claimed, which would have been on the line for the debt limit, but i do think it's a problem, and ultimately republicans aren't going to solve their governing problem until the faction that larry was just talking about comes to an accommodation with political reality and realizes what they can do and what they cannot do.

what tactics will be counterproductive that will hurt the republican party, hurt their cause, and what things that they can effectively do to advance their party, advance the conservative cause. they haven't figured that out yet. that's the key question. >> 15 seconds. >> just remember this, they don't necessarily want to govern. they might want to make messages instead. and the personnel issue is unresolved. look, kevin mccarthy is the favorite to replace him as speaker. okay, but other -- jim jordan is going to run. jeb hensarling may run. tom price may run. i'm not saying he will. the personnel side of this may be subject to greater changes than people realize and the center of power may shift to the right enormously. it's really hard to predict right now. that's all i'm saying. >> larry, john, thank you very much. what a day it has been and don't forget to tune into the next republican presidential date on cnbc october 28th. it's at the university of colorado in boulder.

mandy, that is the first hour. >> it is, indeed. let's hand it over to brian sullivan back from beautiful nantucket and into the glories of a windowless, cold studio back at hq. brian, take it away. >> thanks for reminding me. appreciate it. have a good weekend anyway, mandy and tyler. it's 2:00 on wall street, 1:00 p.m. in oklahoma city. crude oil is fighting to stay above 45 bucks a barrel. i'm brian sullivan. this is "power lunch." we're going to have more on this friday market rally in just a moment. a lot more to do, but we have to begin in washington, d.c., today. house speaker john boehner saying he will resign from congress at the end of the month, and as you just heard, the news comes with just days to go before congress needs to make a deal to avoid a government shutdown. let's get back to our own eamon javers live in our washington newsroom with more on this sudden and rather stunning development out of congress. eamon? >> it was sudden and it was

stunning. nobody expected to see this coming this morning. the intentions had been long running, but we expected to maybe see the speaker would get through this latest government shutdown fight before we saw any announcements about what his political future would be. obviously that not the case. the speaker saying in a press conference just a few moments ago that he woke up this morning, said his prayers like he always does, and decided you know what? today is the day. he seemed light-hearted. he seemed at peace with the decision. now the scram bling begins on capitol hill to find out who is going to succeed john boehner as the speaker of the house and who is going to govern the seemingly ungovernable republican conference. earlier today we heard from president obama who was meeting with president chicago jinping. president obama was asked about john boehner. he called him a good man and a patriot and he also had this to say. >> he is somebody who has been gracious and i think maybe most importantly he's somebody who understands that in government,

in governance, you don't get 100% of what you want, but you have to work with people who you disagree with, sometimes strongly, in order to do the people's business. >> brian, the challenge for whoever becomes the next speaker of the house will be exactly that point. what will they be willing to settle for? they clearly many of them thought that john boehner was willing to settle for too much. the question is where is the appropriate balance and can they make a deal? >> eamon javers, thank you very much. let's bring in politico's chief economic respond ben white for more on what this means. sort of the prevailing school of thought is that this move will decrease the chances of a government shutdown in october but maybe increases the chances of a government shutdown in december. >> yeah. >> do you believe that line of argument? >> i do believe that line of argument. i think the government shutdown next week is pretty much off the table. boehner as his last act will get through a clean and continuing resolution, but i think

december, i know john harwood was on earlier saying maybe it will be a little less pressure in december. i don't think that's true. i think it's more pressured. kevin mccarthy if he gets the speaker's job -- >> do you think he will? >> i think he will. but he will have to make some promises to republicans in the conservative wing of the house caucus that he's not going to roll over to democrats and obama. december got to raise the debt limit and you've got a continuing resolution to fund the government. the fed racing interest rates. there's going to be a con flew wans of challenging events. i don't see a clear path to republicans being able to solve all those things particularly with mccarthy as his first act, he's not going to cut a deal with democrats. >> since there are all these events coming in december, does this clear the path more towards a rate hike in october? does that give janet yellen more of the all-clear because the thinking was before the government shutdown was looming and that could play a role and you don't want to do it in december because of volatility. now it looks like october might be the best month.

>> october is on the table certainly. i think it would require them to add a press conversation in october. it would be an unusual move to do that and do they take all this political dysfunction into account? even if they say they don't, of course they do. i think that's a good point. there's a possibility they'd want to move before all of this happens. i don't know if everything else will line up in terms of markets and the economy to allow them to do that. i think the more likely scenario is they wait until december and then if things really blow up in d.c., they're just going to have to wait longer. >> i want to push back a little bit, ben, maybe not push back is the wrong word, everyone assumes there won't be a rate hike in october because there's no press conference. >> i don't assume it. >> i was in that camp for a while. now i wonder maybe it's more likely that's when it happens so that janet yellen sort of gives herself a break from the line of questioning that she's gotten a hundred times. >> that's true, although she said at the last meeting in the press conference if they raise rates in october they'll add a press conference so i don't think if gets her out of the line of fire. i don't think they could go to the markets and say we're boosting rates and not explain themselves. >> we out. >> exactly.

drop the mic, yellen says rates out, i'm out. we got a bad december coming up. there's no way around it. >> thanks. >> yeah. >> boy a lot of good news five minutes into the show. ben white -- >> welcoming you back to nantucket. >> mandy is like you're in a dark room. you're like merry christmas. sullivan out. cnbc will mark the next debate from colorado. that's a big day, wednesday, october 28th. also the fed decision day. you've got the possibility of a rate hike, then you've got the republican presidential debate. melissa, october 28th, it's a big deal. >> that's going to be a doozy, brian. meantime, we have a nice rally on wall street today on this friday with markets higher across the board right now. the dow is up by 1.5 points, a gain of 235. the s&p 500 just a few points off session highs up by more than 17 or 0.9%. it is the nasdaq that is bearing the worst of the three.

up by only 0.25%. the ibb is a market underpmp underperformer. officially in bear market territory. let's go to bob pisani at the new york stock exchange with more on this market action. bob? >> and pfizer and merck are also underperforming. health care in general has been a problem the last couple days. let's look at the markets in the middle of the day. we are just off the highs for the day, and i think it's fair to say yellen clarifying her stance was a major factor in the move we saw today. 3 to 2 advancing to declining. and the important thing, volume very much on the moderate side here. take a look at the dow leaders. important thing is the dow is outperforming because nike is doing much better than expected. john -- if you take a look at the regional banks, you can see

we have a bit of the yellen rally because as the interest rates moved up the regional banks are moving to the upside. i would mention the s&p 500 essentially is unchanged for the week, down only 0.3%. back to you. >> bob, i'll pick it up. thank you very much. yesterday we got a chance to speak with some of the smartest minds in business up at the nantucket project on nantucket island, and one of those folks was starwood capital groups barry sternlicht. i asked him about his overall thoughts on the global economy. he had a pretty strong answer. here is what he said. >> to me it feels like we're standing on quicksand right now. i don't think -- there are smart people who are confused, and there are people who say this blip in china is nothing. china is rich. and there are other people who say, equally smart people, who say this is the beginning of the end. >> we also talked about the fed and without any hesitation, barry sternlicht said the fed must raise rates and do it soon. >> i think keeping rates low

actually is just creating such bubbles and such distortions and such bad behavior in the capital markets that it's time to raise the short end. i don't think the long end goes up that much. >> you know, melissa, sternlicht obviously a smart guy himself. he said later in the interview he was confused, that they weren't exactly sure what was going to happen but he made this point, a 25-basis point hike on the federal funds interest rate is not going to hurt anybody or anything. >> and that's from a reit owner essentially. it is perceived that reits would have a headwind if there were an interest rate increase and historically if you look at the data, reits perform well in a rising rate environment. so it's interesting to hear from him, bri. >> we tried to get it on the air, his speech ran late, so we did it later on. the vagaries of television. let's bring in katie nixon with northern trust management. i think sternlicht's point is an important one. i'm not saying a rate hike wouldn't be a big deal.

anytime anything is the first in nine years, it's a news headline. a quarter point interest rate hike isn't going to hurt anything, is it? >> absolutely not. i agree it would be a good thing for the fed to get off the zero and it's clear they want to start normalizing policy but it's complicated, right? you referenced its the first interest rate hike in nine years and the world is watching. we've had developed global central banks following our playbook and pulling out all the stops on zero rates and quantitative easing, so all eyes are going to be on the fed and how this exit strategy plays out. we cannot afford a policy mistake and potentially hiking rates only to have to walk back in a couple months if the economy doesn't support it. >> i think it was about a year ago we spoke and you had a piece about ten reasons the u.s. stock market was not in a bubble. we're about at the same price we are then, we didn't collapse so you're right on that. what's your fundamental bullish argument for the u.s. equity markets now or are you bullish? >> i would say we're

constructive on the u.s. we know this year will be a wash, energy is taking six points off earnings -- >> you can't look at the overall number. that's an excellent point. you have to look at every sector or stock. overall number might be bad. >> it's quite distorted. the correction we've seen the valuations come back done to historical averages which does troud provide us a nice tailwind to future earnings. >> before we let you go because ben white of politico was talking about a terrible december. mandy was talking about cold windowless rooms. it's a beautiful day. give us a reason for optimism and hope from an investing perspective before i let you go. >> all right. so we're very optimistic because we see green shoots of recovery in the eurozone. good macro data out there. we see continued improvement although at a slow pace here in the u.s. yes, there are some near-term tactical issue this is the

emerging markets but a lot of value has been created there, so if you're a long-term investor it's a great time to be in stocks. >> like it. every day sunshine to quote fish bone. thank you. appreciate it. still ahead, five reasons china's economy may also be better off than you think. we're in a good move today. and the mystery metal mover in the wake of the emission scan l scandal. and later on, ungodly profits, what the catholic church is doing right here in america that doesn't square with the pope's take on environment. that's coming up when "power lunch," this fine show, returns.

welcome back to "power lunch." i'm melissa lee. weigh tonight bring your attention to the xlv, the etf which tracks the health care sector, a popular trade on wall street these days. its hitting its intraday session low as we speak right now. the primary reason behind this is the downturn in biotech shares. the ibb is officially in bear market territory right now. it is down by almost 4%. meantime, president obama wrapping up a joint news conference with the chinese president. michelle caruso-cabrera is there with the latest. michelle? >> hi there, melissa. right now there is a state luncheon hosted by john kerry secretary of state and vice president joe biden ahead of the big black tie state dinner tonight. the big event of the day was the joint news conference as you talked about where president obama announced there is an agreement related to cyber

espionage between the two countries saying specifically they've agreed neither country's government will conduct or knowingly support cyber enabled theft of intellectual property including trade secrets or other important confidential business information. president obama, however, during the question and answer session, made it clear that he's uncertain as to whether or not china is really going to follow through with it. >> what i said to president xi and what i'd say to the american people is, the question now is are words followed by actions? and we will be watching carefully to make an assessment as to whether progress has been made in this area. >> we were waiting to see whether or not president xi would take questions from the american press corps. when his predecessor was here in 2011, hu jintao, ignored a question from an american reporter on human rights and said later, i didn't hear it, there was a technical issue

before awkwardly answering before having been reasked by a second reporter. they were questions he has already answered in seattle about cyber security and also about the state of the chinese economy. back to you. >> all right. michelle, thank you. let's look at how the chinese markets did overnight. the shanghai composite down more than 1%. take a look at some of the china stocks trading in the united states. alibaba is down fractionally. baidu is up 1.7%. for months all we seem to hear is that china's economy is doomed. after all, that gets headlines, but what about the other side of the story? andy rothman is investment strategies with matthews asia, the largest dedicated asia-only investment arm in america. andy, welcome back. you have lived in and worked around china for more than 20 years. you recently returned from yet another trip there, and you brought along a few economic points that you say point to

that fact of things may not be as bad as many think. they have to do with retail sales, gasoline, and even the movies. please explain. >> that's right, brian. i think it's important to keep in mind that there's been a lot of rebalancing or restructuring in the chinese economy. if we focus so too much on the heavy industry and construction and manufacturing, that stuff is definitely slowing down. there's definitely a rest belt in china but we lose sight of the fact that this is an economy driven by the consumers and services and that's doing really well. that was apparent on my last trip. if you look at some of the numbers, they're pretty good. retail sales up 10%. suv sales up 30%. new home sales up 20%. chinese shoppers in europe at tax-free stores, their spending is up 76% year-over-year according to global blue. >> you know, and in your notes to us e-mailing back and forth, you made a really salient point which is americans seem to be more concerned about a china

slowdown than the chinese in china. >> that's right. as i said, i spent a month traveling around china, and, you know, it was pretty hard to find any chinese person who was concerned that the chinese economy is doomed whereas you come back here and that's pretty much what everybody is focused on. remember that this is a place where income adjusted for inflation is still rising at 7%. manufacturing is weak but manufacturing wages are still rising by 5%. >> i guess the bears or the escape ticks would say this, that the data you brought was great, we appreciate it, but it's backdated and we don't know what's going to happen 6 or 12 months from now. >> sure. well, good time to remember yogi berra who just died recently who always said predictions are really difficult, especially about the future. but we do have a lot of data to look at which tells us that the largest part of the economy is doing well. now, it's not to ignore the difficulties. there is, as i said, a distin

distinctive rust belt. there are five provinces in the northeast where gdp growth in the first half were 4.5%. but the other 26 provinces, gdp growth was 8%. if wages are still rising in manufacturing at 5%, manufacturing may be week but it's not classing. if we look at msci china industrials, profit growth was up almost 40% year-over-year. >> it was a real pleasure to get you on and get the other side of the china story. thank you. have a great day. >> thanks, brian. >> melissa, you have some negative news. >> the nasdaq just turned negative and that is primarily because of the action we're seeing in the biotechs. brian, five minutes ago i was talking about biotech. it's down another half a percent, down to session lows, intraday lows right now. down 4.5% and the concern, brian, is that biotech is a big component of the health care index and health care, as you know, is one of those sectors that a lot of analysts and strategists like to point to as

a safe area. biotech is 20% of the health care indexov overall. we're seeing the s&p 500 pare its gains. it is now up by 0.4%. >> you're putting you right in the camp with ben white and his long december. you're getting in the bear barrel. >> i'm just reporting facts, just conveying what's going on in the market right now. >> fact, it's friday. >> it is. >> up next, the one commodity getting a nice pop thanks to the volkswagen emissions scandal. we're going to name the mystery metal ahead. as we head to break, let's look at some of the names that might be in your portfolio. google down a bit, apple down very fractionally, but microsoft and jpmorgan chase are higher. the dow is higher. we're back after this. but i couldn't do it on my own. i needed help and chantix was there. and i did it. along with support, chantix (varenicline) is proven to help people quit smoking. it reduces the urge to smoke.

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welcome back to "power lunch." vw tapping porsche's matthias muller to be the new ceo. check out what's been happening to pa laid yum. we don't just randomly bring these two things together. we talk about palladium because it's tied to the story because it's used in gasoline engine cat latic converters. it's up 9%.

it's on the optimism more people who were thinking going diesel will go to gas. platinum is down 3% because that's the metal used no catalytic converters for diesel converters. stillwater mining mine platinum and palladium. the palladium story is winning up more than 12% since that emissions scandal broke last week. time for "street talk" on "power lunch." five analyst recommendations that you need to know about. at least we think you do. first stock, intel. jmp securities upgrading it to a neutral. melissa, normally i hate neutrals. >> why? >> well, it's just like neither here nor there. admit to something. it's a widely owned stock, had a lot of problems. maybe it's the beginning of something more positive. jmp notes industry checks suggest intel pros jekts apekts

making a subtle shift to the better. >> intel has been an outpmper. it's up 12% in the last month. second stock we're watching, jay bill circuit. take a look at that. up 14%. raymond james is raising estimates maintaining the outperform rating and 27 price target. it's continuing to gain share at apple. >> i didn't realize how much their soles had gone up. in 2009 they did $11.5 billion in sales. this year they're on space to do just about 18 billion in sales. stock three, big lot. citigroup starting coverage with a buy and a $56 target. they say that big lots is undergoing is turn around. should be able to drive higher earnings growth. >> and you take a look at that chart, specifically since the end of august because that is when they raised their guidance for the full year and that's when there is a lot of positive

action in the stock. fourth stock we're watching american tower. bullish on amt reiterating the $114 price target. the analyst says it's one of the highest quality companies trading at near trough valuations. he urges investors to aggressively buy. >> this is reminds me of a peter lynch-type stock. like one of those things where everybody has a cell phone now. six years ago not everybody did. it was a $19 stock in 2008. now it's an 89 -- it's just like when you have more phones, we need more cell towers. finally today's under the radar name, nevro. california based medical device company focusing primarily on implanting devices to treat chronic pain. bmo capital markets starting cover yaage with an outperform.

>> we should note it's a relatively new company. nice performance. it's up 29%. >> there you go. "street talk" on a friday. let's send it to dom chu. >> we're watching what's happening right now as certain industries are starting to roll over a bit going into the close. one of them is the transportation index, also thei yt. that's the etf that tracks those stocks. you can see here still positive but taking a bit of a turn in the last 10 or 15 minutes. it joining biotechnology, also small cap stocks that seem to be rolling over a bit. among some of the big names, look at the airlines, united, southwest, and rail companies like cf x and norfolk southern. >> even as diesel prices

continue to fall. the oil close is coming up after the break. "power lunch" will be right back. it's time for the "your business" in your opinientrepre not surprisingly technology is at the heart of the new trend. for more watch your business sunday mornings at 7:30 on msnbc. we thought we'd be ready. but demand for our cocktail bitters was huge. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding. fast.

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hello, everyone. i'm sue herera-here is your cnbc news update this hour. the environmental protection agency is toughening its stance on emissions test after volkswagen deceived regulators and violated standards. the agency telling automakers it will begin road tests on all new and used vehicle models to examine their emission claims. the dalai lama is canceling all his planned events in the united states next month for medical reasons. the office of tibet in washington releasing a statement saying after receiving a medical evaluation in the u.s. earlier this week, his doctors advised him to take a complete rest. amazon has put its amazon prime membership program on sale today. only new subscribers who sign up can purchase a $99 one year membership for $67. that honors the 67th prime time emmys and the company's first emmy wins. and a picture may be worth a

thousand words but how about trillions of dollars? on wednesday in seattle take a look at that, chinese president xi posing with 30 top chinese and u.s. executives for a group photo. the total market cap of the companies that they lead, $2.5 trillion. that's the news update this hour. brian, back to you. that's nothing to yuan about. >> i endorse that. awesome. sue herera. thank you very much. >> you're welcome, bri. >> that is fantastic. in january crude was at 45 bucks a barrel. right now crude oil is the 45 bucks a barrel. jackie deangelis at the nymex. >> it's hard to follow sue's joke there but let's talk about these prices. we did get a little bit of a pop today closing at $45.70. so off of session highs but tracking along with equities and the positive momentum in the market after the back of that q2 gdp number. there are still some baeearish

factors the market is shrugging off. yellen bringing back the notion we could get a rate hike this year. at the same time you have the iranian oil minister talking up the fact that exports are going to start to ramp as soon as november. most of that oil potentially going to china. having said that, we got the rig count numbers this afternoon. four oil rigs came offline. that's a little supportive of crude but ending on a positive note here. back to you. >> all right. >> thank you, jackie deangelis. want to look at the markets because we're losing steam on this friday session. take a look at the s&p 500 just off of session lows at this point. it is up by 2 points. the dow holding on to a 122-point gain. it's the nasdaq where the most pressure is being felt. take a check of the nasdaq intraday move. a dramatic move and this closely follows the move we've seen in biotech down by more than 5% as well as the xlv, the etf that

tracks health care. health care taking a dramatic intraday move to the downside. let's get to bob pisani at the new york stock exchange with more on the action. bob, it was a dramatic rollover that we saw midday. >> i noted yesterday that health care in general has been under some pressure, and i know we sort of obsessed about the biotechs and you're right. the reason nasdaq has moved down is because of pressure on biotech, but i want to point out what's been going on just generally with the health care. put up some of the health care stocks, for example some of the hospital stocks and some of the hmo stocks today. this is today. now, we saw this happening yesterday, and i pointed this out, that this is a little bit of an anomalous situation because it's moving independently of the rest of the market. look at sectors. health care is down 5% as a group. this is not just biotech that's down. this is the overall health care group down 5%. materials are down almost 4%. industrials and consumer staples are weak as well. you see health care is a real outlier there. then you have big names in

pharma like merck, for example. merck's well, well underperforming the rest of the markets there. merck is down about 4% this week. pfizer is down about 2.5%. now, melissa, i'm not sure what's going on. i can tell what you some of the speculation is. the speculation is that there may be some rotation going on and that health care, which are very easily liquid, the big names i just showed you, the mercks, et cetera, are used as sources of fund to buy other sectors and the speculation is that is going to be financials now going into the fourth quarter. again, nobody is sending out a postcard saying what they're doing but that's some of the speculation. >> all right. >> i'll pick it up there, bob. have a great weekend. the new apple iphones hit stores today. many phone fanatics no doubt thrilled, but does that mean anything to apple stock? well, max wolf is with manhattan venture partners. walter, do you think first weekend sales are going to be strong enough to move the needle on apple stock monday morning? >> well, if you look at the

monday stock performance, it typically doesn't actually go up or down by more than a percent and a half. i think back when i think it was the 5s and the 5c launch you had a 5% move. beyond that every other year has been a pretty kind of tame response as far as when the monday numbers come out if they come out. >> how do you think they're going to do? >> they added china. last time they added china for the michelle launch, the numbers went up 4 million. they went from 5 million the first weekend to 9 million. but, of course, in that year they were double counting meaning they were counting the 5c, the legacy model. you should see some uptick. i think the street is around 13 million relative to the 10 million they did last year. max, welcome to "trading nait n nation", what is it going to take for apple to break out. >> i think people have to decide it's a value stock. we think the multination open and the strength of the model is strong. also they did a little bit less

of holding back supply than they historically have. so they're going to be able to meet that demand. less buzz about unmet need, more units shipped. we think 12 to 13 million is the right area. but we want to be a little bit cautious only because we're not seeing a sea change where they finally release phones in the full-size factor format which is what we got with the 6 series in the last big round of releases. >> all right. max and walter, we're going to leave it there, guys. apple, it's a big weekend. we'll probably see you very soon on cnbc. thank you, guys. for more "trading nation," tradingnation.cnbc.com. >> coming up shutdown showdown. does the sudden resignation of john boehner make a government shutdown more or less likely. and take a look at the biotechs. down about 10%. much more on this sell-off here when "power lunch" continues.

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welcome back to "power lunch." i'm melissa lee. we have a big interview coming up on cnbc this monday. former president bill clinton sits down with our own becky quick live from the clinton global initiative. you can catch that interview monday noon eastern time right here on cnbc. brian? >> it is a big one. melissa, thank you. does john boehner's departure raise or lower the odds the federal government will shut down again sometime this year? let's bring back in larry kudlow, and we have brian gardner. brian and larry, welcome. larry, first off, do you think it will raise the odds of a shutdown in december. most agree october gets pushed back and what's your overall take on this stunning news? >> i just want to raise a contrary view. i'm not 100% certain that it avoids a shutdown october 1. >> why? >> i want to make this point. it will require for mr. boehner's last actions to get a

coalition that includes democrats, okay? and many people will tell you that nancy pelosi wants to pass the ex-im bank as part of this deal and the republicans do not. presumably kevin mccarthy may be the new speaker. he's against it. certainly the conservative caucus is against it. that's a stumbling block for october 1. another stumbling block, brian, is the highway bill. they don't have financing in the house locked up yet for the highway bill. so i'm going to buck the consensus and merely say it's in a state of flux right now. there is nothing certain. >> you know, brian, politics always sounds complicated until you realize ultimately it's just math. i need "x" votes to get this done. when you look at the math of the democrats and the republicans that may go with boehner, assuming he goes the way we think he might, do they have enough to avoid a shutdown and get some of the stuff done that larry was just talking about? >> you know, i'm very much in the consensus. october they have the votes

because it's a kick the can down the road scenario, and people leave their options open for later. december is the more important time. so in the short term i kind of -- i'm probably in the karch with larry that it's not 100%, but it's a very high probability that the government is -- on october 1 the government is going to be open. >> brian, you may be right and you are the consensus guy and you know you well enough to know you're not always in the consensus. >> i like contrarians, larry. i want to be contrarian. >> that's why i love you. i'm just putting these things out because talking to people today, now, it's hard to get ahold of all the members i want to get ahold of because they're all in meet, and caucuses and conferences. but the leadership battle and the messaging they want out of this battle may still get in the way. i'm just going to say, ex im-im one issue. planned parenthood is one issue

and the issue of the highway bill. the senate has financing. it's a little hokey but they have hfinancing. no such deal has been made in the house. >> again, if it was for a long-term deal, i don't think there would be much of a chance of getting a deal by the end of next week. since it is short-term, i think republicans will hang with their leadership just enough. you're going to have the rebels who are going to go out there no matter what and vote no, but, yes, boehner can now put together a coalition with pelosi. it will complicate things a little bit with mccarthy, but there are enough republicans that will hang with boehner and pelosi will bring along. boehner no longer has to worry about retaliation because he's heading for the door. so a short-term deal is quite -- i think is quite logical. i think it's quite likely. >> very quickly -- >> for all the reasons larry just mentioned, december gets really tough. >> i don't want to obsess about it because i think you may be right. december 11th is going to be the

more difficult, so i buy that, but just one other point. you're trying to create a coalition now to replace speaker boehner, okay? yes, kevin mccarthy looks like he's the guy. but there are all kinds of jockeying going on for majority leader, for whip, for deputy whip, et cetera, et cetera. >> absolutely. >> composition of that coalition and the representation of the conservative caucus is crucial. so if a deal is struck and they all revolt against it, all hell could break loose. >> by the way, hold on for one second. i need to mention because we are cnbc, i need to mention that the s&p has just turned negative. the dow is still up but only 85. we were up more than 200 earlier today so bid is drying as we head to the close. is any option whether it's jordan, whether it's mccarthy, whether it's a wildcard for speaker, does any option take the main part of the conservative party and make it more conservative than boehner?

does anybody bring it back to the left at all? >> no, not to the left. -- >> not to the left but more toward the center. is any move more extreme? >> i think, brian, your question is is it going to go more center right or more right right? >> that's right it, thank you. >> and i don't see it going back to center right, and really, you know, the fault of this belongs on the far right because they have bucked their leadership and they have emboldened a minority leader who was able to keep her coalition, her conference, totally united. there is no unity on the republican side -- there's fractured republicanism and then there is disunity on the democratic side. it's quite ironic that the tea party, who, you know, want more limited government, want a more conservative government, they're actually collaborating with nancy plea nancy pelosi. it's quite perverse but they're going to be the ones that prevent going back to a center

right -- >> politics makes strange bedfellows but don't forget this. this is not necessarily about governing. this is tied up in the 2016 election. there is a revolt by the grassroots, by the base of the republican party, and what they're saying is that they want action from the senate and the house. they want repeal of obamacare. they want repeal of planned parenthood. they want tax reform, et cetera, et cetera. what the base is saying is gosh, darn it, stop making all these deals, do what we elected you to do -- >> politics are deals. >> political message on the table. look, that's why the outsiders are winning in the -- not in the primary, in the polling going into the primaries. so you've now got -- >> sick of the normalist -- a group of people who have shut the government down a couple times over the last ten years.

that's why nobody has any faith in anybody. >> circle back to the original comment -- >> whoa, whoa -- >> circle back to brian's original comment on political math. >> schoolhouse rock -- >> don't forget that the shutdown in 2013 was followed by a total republican takeover of the senate -- >> but there's no causal -- larry, there's no causal relationship there. it happened despite the shutdown, not because of it. >> well, i don't know if that's true. >> very quickly, super, super short answers. very quickly, yes or no if we can. larry, does joe biden get into the race? >> yes, i believe he will. >> brian? >> larry and i agree. >> now, ask me if he's going to win. >> no, i'm not going to ask you that because i tell you what, brian said that the democratic party is very united. if biden enters, you might see a less united democratic party as they go like this. we'll see -- >> can hillary hold on with the fbi investigation? this is a huge point. that whole race on the

democratic side could be tumultuous. >> last time i was in d.c. i took the intlt washington parkway to avoid as much of the beltway as i could. >> no, no, no. you never avoid traffic down here. >> as much of the -- >> you never avoid traffic there. >> thank you very much. you can watch the next republican presidential debate right here on cnbc. same day, by the way, as the fed meeting and decision we could get an interest rate hike october 28th. >> no. >> yeah, circle it. mel sa, no, can't have that day off. >> brian, the s&p 500 now officially negative, we are losing steam as we enter into the final hour of trade, the dow is holding on to a gain of 74 points, well off of session highs, nasdaq is now down by more than a full percentage point, biotech the big culprit. more when "power lunch" comes right back.

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welcome back to "power lunch". i know you've been talking about the biotechs weakening, it's worse than we thought. 144 members of the ibb biotech ebt, none are up. all 144 members are down right

now. you've got arena pharmaceuticals down 15%. >> and this is part of a bigger trend, brian, because the iv bchlts is in bear market territory, 78% of its components are in bear market territory. for those of you long we're talking about eye bye owe tech too much, is healthcare in your portfolio? it's about 20% of the healthcare. with this downturn in biotech we're seeing that downturn in healthcare which has been a popular sector to invest in this year. >> i count slowly more than 30 are down more than 10% today. more "power lunch" right after this. excellent looking below the surface, researching a hunch... and making a decision you are type e*. time for a change of menu. research and invest from any website.

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that's the power of active management. just off the session lows for the nasdaq composite but down a firm 1%. much more behind today's selloff on "fast money" at 5:00. >> bio biotechs now he has seen this movie before. pope francis continuing his visit to new york city today, earlier this morning he addressed the u.n. general assembly and visited ground zero. in about an hour from now he will visit a school in harlem before heading to madison square garden for a mass for 20,000 people. the hope has been speaking out on climate change and our dependency on fossil fuels, but in the heart of america's oil country some catholic diocese are faced with a problem, they lease land for oil and gas

drilling to help pay tuition for those who can't afford it for catholic schools. here is the president of the st. patrick's city skool in oklahoma. thank you for joining us. does this put you in a bit of a quandary? >> well, to some extent. the reality is that we've owned these mineral assets for years, decades. most of them acquired through, in fact, all of them acquired through gifts and donations made by ben factors of the university over the years and so it has been a good source of income for us. less so now with the decline in oil prices, but, you know, it generated nearly half a million dollars a year in -- when the prices were higher. >> there are obviously many catholic schools in the united states, you are probably not the only one that has oil and gas on lands that they own or has been

donated lands, but, mr. maine what, would it take for you to have to stop to do this? right now the pope is discussing the issue, you have not been sort of issued a direct order from the catholic diocese of the united states so what would it take to change what you are doing? >> well, it would take some prudence for one thing. if we were to divest ourselves in sort of a fire sale basis it would be a tragedy because the value would be gone at a point where the value is lower because of oil prices are lower. so in the event we are to do so, we would want to do it over time, manage that asset like we manage other assets and usually making sharp, quick decisions isn't the right way to manage your assets. so i think what we would want to do, and we will do this, we will review the pope's encyclical and whatever other direct testifies may emanate and we will attempt to implement those over time in a prudent fashion.

>> it's a difficult question. do you disagree with the pope on this issue? >> no, i don't, as a matter of fact. i think the issue of climate change is real, i think it's something we need to pay attention to. we are paying attention to it in a variety of other ways. the abby, the ben dig stein abby at st. gregory's a making changes, we're making changes in our energy use. so i think it's something that we all need to pay attention to. >> all right. thank you very much for joining us. have a good weekend, sir. >> thank you. >> have a good weekend. "closing bell" starts right now. hi, everybody, and welcome to the "closing bell." i'm kelly evans. here is the new york stock exchange. >> i'm bill griffeth. what a busy news day. just as the opening bell was ringing here at the new york stock exchange this morning we had a shakeup in washington. house speaker john boehner