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tv   After the Bell  FOX Business  January 16, 2014 4:00pm-5:01pm EST

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solarcity. it will pop more. [closing bell ringing] >> watch it pop left 1/2% to the upvied. david: wow, another 12% for solarcity. lii: here are the bells ringing on wall street. while we're seeing a loss for the dow, and s&p, not the nasdaq. well off the lows of the session. down 62 points for the dow ones industrials. at one point, david, we were down more than 100. david: we've seen nasdaq to the plus size. intel, we'll have cfo of intel on as well. we'll have american express earnings coming any moment. there is lot of action. "after the bell" starts right now. david: let's get right to it. today's action before earnings come in, we have steve holland, holland group-pounder and -- founder and ceo. warning of possible selloff. mark newton, who is here with
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two stock picks for your portfolio. todd coleman in the pits of the cme. todd, let's start with interest rates. they were down a roll again today. you say, we make a mistake these days if we follow interest rates on 10-year. you look shorter term to the two year interest rates. why? >> there is a couple reasons why. one the two-year note will be more tied to short-term interest rates which as we move into the next few weeks, we get, at that today a tahda, the debt ceiling debate on the books. what will happen is issues as collateral as we saw at the late debt ceiling debate of 2013, we saw some of those issues become not qualified to be used as collateral which really saw short-term interest rates to rise aggressive causing volatility to rise which in short dated issues is not a good thing. in long-dated issues is provide opportunity. liz: mark newton, nobody said we
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wouldn't see volatility in 2014. we certainly have. two great days and weaker days before that. do you get any kind of a sign what will happen within the next couple months when you super impose it over the data? what does that tell you? >> it is interesting. year is much more lackluster start than people want. it takes a lot longer to break bull markets than people give credit for. a couple things happened in last few weeks. advance-decline is in bear market territory. you see a span of six to eight months of a peak in advance-decline before the market actually breaks. another factor technology on a relative basis moved back to new high territory and that is also3 quite positive. between financials and tech, both of these sectors comprise about a third of market capitalization. those are obviously two bullish factors. david: steve holland, you have a lot of retired factors you handle their money.
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the stock market has grown so much faster than the general economy. tell us why that is a concern for you? >> many of our clients say we don't see all the growth in the economist we see all the growth in the stock market. so we have two types of clients here. we have clients that were invested in the market and they're happy. they're up 20, 25%. then we have clients who have missed it, who didn't trust it in the beginning. so some clients are a little bit apprehensive they say. i missed the big run-up. i'm not going in right now, the market is too high. same old scenario. you have a crystal ball that doesn't work and investors are nervous of course about the fed with tapering, what does that mean? are they going to stick to 10 billion a month? are they going to ease off of that. a lot of unanswered questions receipt now. so 2014 should be very interesttng. david: okay. by the way, we have intel earnings right out now. we're getting reports fast and
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furious liz, off the computer. liz: expectation for 52 cents. intel coming in at 51 cents but looks like it's a beat on revenue. if you look at revenue, expectation for revenue was 13.72 billion for intel. actually the number is coming in at 13.8 billion. the stock if we show it. david: trading down a little bit from where it closed. 25.66 the bid. end the day at 26.64. liz: i actually see the ask at 25.75. yes, indeed that is coming slightly lower. david: right. liz: the whisper number which matters to a lot of people in the technology world was for 50 cents, two cents lower than what the expectation was. intel coming in at 51 cents. looks like a miss by a penny on the bottom line but looks like a beat on the revenue line at $13.8 billion. important to remember, this company reversing what it had done. not necessarily reversing out pc market. making very aggressive
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predictions for sales when it comes to mobile chips. wry an kranich said we'll do 40 million in mobile chips, when i say mobile, i mean tablet. we'll have the chief investment officer stacy smith coming up in a mmment, first on fox business. we'll ask him about that. we'll ask him about mothballing, apparently mothballing of arizona plant. do they see slower demand or see something else at work. david: about the i was, the 40 million tablets they say they will fill with intel processors that is quadrupling from the current. so that is a huge increase. i want to go to mark newton on this, you're a technical analyst on issues sometimes deal with what intel does and their projections are. they're so tied into the pc market. this week we had jpmorgan's prediction, leap of faith prediction we would see a resurgence of pcs.
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they were trailing terribly but they will make a comeback. do you believe in jpmorgan's outlook which would help intel right now? >> intel if you look at the trading history last dozen years the stock has been range-bound for quite a long time and has not gotten above 28 since 2000 two. recently you've seen a real resurgence in the shares that makes me optimistic. the shares moved 20% in last couple months. granted they missed by a penny. the stock might be down a fraction. my thinking the stock is starting to gain momentum. that makes me positive on the stock technically. i think far too many people are bearish on intel. i was looking at analyst count. a quarter of the analysts are bearish not only on the quarter but the year as a whole. give the stock is starting to make headway, they might be caught off-guard in the stock moves higher. liz: steve holland, you like apple. there are intel products in apple laptops and things like that. they're coming in, intel's coming in with gross margins for
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the quarter of 62% versus 58% year-over-year and i'm just wondering, that to me looks certainly like an improvement. i know analysts look at all different kinds of metrics but don't you want to see the gross margin number coming up and they have got it? >> yeah, i think so. that looks pretty good to me. my big concern for intel the fact of the matter for the last seven quarters nobody is buying desktops anymore. seems like the desktop sales are going down, down. so you're absolutely right. they have got to make their mark. continue to make their mark in the mobile market. it is nice to see the numbers come in pretty close to what was expected. david: by the way, we have american express earnings in as well. the earnings per share are a bit of a miss. it was expected at $1.26 earnings per share. came in at 1.25 earnings per share. the stock is trading down after-hours. it is now trading, the bid is
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86.25. so it is trading down a little bit. thaa leads to the whole banking sector, steve, big questions about it. we have had mixed results. jpmorgan had that loss compared to where they were last year whereas bank of america came in pretty well. what do you think of american express? it called itself a bank over the past five or six years. >> right, well i look at american express and i say in comparison to a year ago i think they're up about 20% as far as their earnings. so that to me obviously is progress. i'm a little bit concerned about the financials this year. it is not one of the sectors, not one of the areas that i think is going to be on fire for 2014. but, yeah the numbers came in pretty much what we thought they would be at. liz: okay. again, we go back to intel at the moment because it's a dow component as is american express certainly and these are two names that do tend to set the tone for their respective sectors, do they not?
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mark? >> absolutely. intel is a bellwether. american express has had a big run. everybody is looking what these stocks can do. american express already pulled back from the low 90s. at this level a lot of people are being are looking at this stock technically at decent support to move higher. these are two key names. my thinking both can move higher next couple months regardless whether they pull back for a day or two after earnings. david: looks like they will stay pretty much a little lower for intel and american express after-hours. but of course those things change. not really affecting the stock all that much. just a slight miss for both stocks. steve holland, mark newton, thank you very much. todd, we'll check back with you in a couple minutes when the s&p futures close. liz: with intel's results out right now this has massive ramifications for the pc market, for tablets for semiconductors. okay they missed slightly on eps but beat slightly on revenue. coming up stacy smith, intel's chief financial officer in a
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david: american express shares are still falling a little bit after-hours. let's head back to nicole petallides on the floor of the new york stock exchange. it was not too bad, nicole. >> a bright spot the holiday spending looked good for the company. earnings per share, $1.25 a little light. the estimate was a buck 26. revenue versus estimates of 8.54 billion. revenue a little better. saw higher profit from american express. they talked about fourth quarter member spending up about 8%. international card services, that was also higher. so that was good news. they say they ended the year on a strong note with card member
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spending up 8% despite mixed reports during the holiday shopping season. look at macy's and visa going into the closing bell, those were mixed. we saw american express lower. right now the bid ask seems to be slightly to the downside. this credit card company obviously one to watch tomorrow. a winner over the last 52 weeks. david: good stuff, nicole, thank you very much. >> s&p futures closing in what about, what would you say 42 seconds? david: 45 seconds. liz:ed to coleman in the pits of contract me. go, todd. >> i think stocks are coming off a pretty good day all things considered. economic data we got this morning was pretty well-mixed, not too bad, not too good. treasury suggested with low yields there is still fear in the market as far as economic growth comes and looking out the calendar a little bit the january fomc meeting which will be chairman bernanke's last meeting is a cornerstone of the year as we move forward into the
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yellen administration. liz: todd, thank you. we want to do that clang off the bell. david: we finally got it. just in time. best buy of course and jcpenney getting crushed today. best buy posting its steepest drop in one day in 11 years after announcing weak holiday sales. jcpenney saying it is closing regional stores, cutting 2,000 employees. that hurts. where do these two giant retailers go wrong and is there still time for a come back? liz: joining us kevin mullaney, grace and company, former tommy hilfiger v. of development where he led the largest and most successful shop in shop rolllut in retail history. good to have you. >> thank you. liz: the store within a store concept is something jcpenney started toodo. i thought it might be their savior in a way but these numbers and changes look like growing pains to some who are hopeful that the company turns around or looks like nothing
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they can do. how do you see it? >> the idea of putting shops in shops was a great idea for the store, if you look at the brand jo fresh, you walk by the mall see the setup with the presentation, it is powerful. the problem jcpenney is still rebounding from making a critical error pulling out all promotions. retail is about theater. theater includes promotion and excitement. they backed off that. i think that was a critical mistake. shop in shops should they get through this will be one of the better things they did. david: interesting if they survive. let me switch to best buy for a second. that was a huge drop, almost 30% drop in one day. of course they had a 300% run-up over the past 12 months but paced on a .8%, less than 1% decline in sales. is that overreaction bit market you think? >> i think, as i looked at it, when you looked at what their priorities were for' 14, they
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talked a lot about increasing the web. that is like a gimme. they're up 25% in the web business. david: they're competing with amazon which is the king of the beast. >> they're that much smarter than they were last year in earls it of the web. other aspect was integrating all of this together, all their internet, digital and their store. everything else on the list was operational. if you're best buy i don't think you win by being the cheapest. you can only cut costs to a certain point. i don't think you can be the cheapest on electronics. i think what you need is innovation and excite mane. liz: you need a better in-store experience like what apple started to give people. that was a big comparison. when you were at tommy hilfiger what was the number one thing you felt was really important to adopt or do to actually work? because tommy hilfiger is a great case study on a brand with too much inventory. everything started to go on sale. i remember this years ago, and suddenly it got hip and cool
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again. >> my time at tommy goes way back to when we were tommy who, not tommy hilfiger. by putting shop in shops in we controlled our destiny. that was probably one of the strongest things we did. we took ownership of the store, salespeople, everything. suddenly we presented our brand the way it should be presented and i give best buy kudos for doing that with samsung. however looks like in stores i was in, did it with samsung and to the exclusion of apple. i think you need both. people want to go to best buy they want the best of everything. so i'm not sure some of the things they're trying to do really speak to innovation. david: liz mentioned the apple store experience which was created ironically by the man who people say destroyed jcpenney, ron johnson. >> right. david: he created that apple in-store experience which is such a integral part of its success. shows how fickle the retail
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sector is. what works in one arena definitely does not work in another. did you have confidence ron johnson might carry over at apple what to jcpenney or did you see the failure far away. >> it is unfair to say -- david: would i like to know. >> i didn't. because there were a couple of fundamental problems. jcpenney is not apple. it was a white hot brand at the time. single brand and they controlled their entire environment. jcpenney is multibrand, multivendor, multiclassification. it is a very different game. copying that formula for apple over to jcpenney, especially part about removing all promotions, that was the death knell i think. david: yeah. >> he did some great things. i mean within that but that one piece just put it over the edge. david: big piece. liz: kevin, great to have you,. >> thank you. david: great stuff. thank you very much. liz: intel trading to the downside following its q4 earnings just moments ago but
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within those numbers some nuggets of positive news. the company ramping up its spending on plant and equipment. in a first on fox business interview we're speaking with intel's cfo stacy smith. what are intel's plans for this specific spending? will it be enough to win over investors? david: also a high-stakes showdown over unemployment benefits. the outcome could have an impact on the federal reserve and how fast it tapers its bond buying program. we'll explain why. jon hilsenrath coming up, speaking of the fed, tell us what you think, pimco $2 trillion under management is betting that interest rates remain low until 2016? are they right or will they lose this bet? what do you think? ♪
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david: time for a quick speed read of some of the day's other headlines, five stories one minute. saudi gulf airlines signing a $2 billion deal with canada's bombardier with option for 10 more jets. delivery end of 2015 and start of 2016. foreclosure filings fell to a six-year low last year. the report by relate track showed filings stopped by 26%. citibank planning to reissue all customer debit cards affected by target's data breach. citibank is the second major
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bank. jpmorgan will replace two million debit cards earlier in the week. apollo management buys cec entertainment, parent company of chuck e. cheese. the franchises operate 57 chuck e. cheese restaurants worldwide. ebay is looking to go head-to-head with rival amazon for launching a marketplace for brands to sell directly to consumers. according to an analysts report, the site will be called, the plaza. that is today's "speed read." liz? buzz buzz. liz: there is political stalemate to extend unemployment benefits. if the benefits are not extended that would affect the rate and could affect the fed's tapering decision, the bond-buying program that's in place. david: rich edson has more. where is this all headed, rich. >> if 1.3 million people are not getting unemployment benefits which they stopped getting at the expiration the end of last year, a number of economists
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believe they will get out of the labor force. when you're out of the labor force, the government doesn't count you in unemployment statistics. one economist says unemployment will drop from 6.7% to 6.5% because of a result of that. the fed came out with its forecast saying it might consider perhaps raising interest rates at 6.5% unemployment. however, one economist says that there is a major difference between 6.5% unemployment because people are getting jobs and because people are falling out of the labor force and when it comes to the interest rate decision the fed will recognize that. >> i think they will continue the discussions about how do you communicate your intentions on rate policy given all of these complications with measuring the strength of the labor market and i think we're going to see forward guidance which is the fed's main tool now, as they taper and end qe, we're going to see that evolve and change as the data change and as their
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thinking changes. >> the fed next meets on the 2th and 29th of this month. for extending unemployment benefits, democrats and republicans are negotiating a way to try to pay for extending those extended benefits for three months. they reached a stalemate and they're out next week on recess and won't get it done before they leave. back to you. david: not surprising. business left undone. liz: rich, thank you very much. david: pimco is on one side of a huge bet among fund managers when the federal reserve will raise interest rates. literally trillions of dollars are at stake, not to mention reputations. a fed observer telling us who could be right. that is jon hilsenrath. liz: on the left that is pimco. intel reporting earnings just moments ago. the stock is trading slightly to the downside after-hours, there are signs of more excitement to come in this company, this after hitting a 52-week high yesterday for the stock. intel's chief financial officer,
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stacy smith, he is coming on live, first on fox business in just a minute and he will give us way more granular information how this company is expected to ♪ [ male announcer ] e new new york is open.
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♪ david: okay, well that is how hershey's always told us they make the delicious hershey's kiss. a new era of production is on us. the future is here. hershey reach ad multiyear agreement with 3-d systems to explore ways to use 3-d printing to produce food. put a little sugar an comes out way you want it. 3-d systems unveiled printers at the consumer electronics show. the stock ended up more than 2%. i know liz will get one. liz: right away. intel shares, what are they doing? falling in after-hours trading following intel's fourth quarter earnings report that came out. earnings per share, here is what it did. 51 cents, slightly shy of estimate of 52 cents.
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revenue beat coming in $13.8 billion. the estimate was 13.72 billion. so what do you have? you do have revenue coming up and you also have some interesting headlines here. what drove intel's numbers last quarter? what is next for the chip giant? intel's chief financial officer, stacy smith joining me now in a first on fox business interview. welcome and thank you for joining us. >> thanks for having me. good to be back. liz: i need to know right off the bat because one of the things we saw here that the pc client group revenue, while flat year-over-year was better than expected and that leads me to ask right away, tell me how the pc market which is one of your very, very biggest, how is it doing? i'm so tired of people saying pcs are dead when we know they are not but tell us exactly what you see. >> it was a little better than expected, if i zoom out, q4 was a quarter where we returned to financial growth. specific on the pc side we saw unit growth and we started to
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gain share in tablets. so when you add in our pc units plus tablets we had 10% unit growth in the quarter. we feel good about q4. a nice solid ending to a year of transition for juice get to the tablets. ceo had made a pretty gutsy prediction, this year, 2014 you guys will do 40 million units for chips that go inside tablets. as we wait to see that did you get any sense from the end of think of the think of the to say, you know what, we can do this, we can hit this? >> we had a good fourth quarter in terms of volume when you take that with the pc volume, it was on the order of 10% unit growth. it was definitely a point along the continuum that gave us confidence about the 40 million units and what is even exciting more to us the brett of tablet out there. we're seeing android tablets based on windows and across
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price points and performance levels. so we feel pretty good about the first steps participating in this market. liz: these acer,'s sus, lenovo, dell, which vendors, which companies? >> all of the above. that is our business model. we bring out a technology, what we call a platform. we enable a lot of our customers to go bring great products to the marketplace. it is good for them because i think our technology enables them to play in the market at a rapid pace and we get to participate broadly. it is across eoms and operating systems and price forms and price points. liz: is it in apple tablets? can you say you will be in apple tablets soon? >> i will let apple comment on their product lineup, not me. liz: you guys are in apple laptops. i always have to ask, you know me, stacy. let me ask about the gross margins. before we get all wonky bit the chips going into tablets have lower margins than chips and
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processors that go into things like laptops. how many chips do you have to sell for tablets to equal one processor that goes in there? i heard five for one? >> no. compared to the low end of the pc market it is not nearly like that. liz: okay. >> and, we don't view it that way. you know, if you step back what we're seeing this explosion of devices that compute and connect to the internet. so we plan to participate in the pc market. in fact we're reinventing pc market with two in ones and detachables what not. we'll participate in tablets. we'll participate in things like the internet and machine to machine sensors and things like that. for us we look at it as an explosion of devices and we'll take our manufacturing leadership and participate across all those devices. >> why are you guys predicting full year 2014 flat? what is the disconnect there? >> yeah, you know, our forecast is that even though the pc market is stablizing that we'll still have pcs down a little bit in 2014.
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so, less of a decline than what we saw in '12 and '13. still a little bit after decline. we hope we're wrong but that is our base forecast. we see growth in the data center and some other areas. but for us the pc business is a giant business and a little bit of a decline there offsets a lot of growth in other areas. liz: data centers and servers, that's fantastic. you guys have really owned that. we spoke to arm holdings. they say they make it into the service business. how do you maintain leadership there where the margins are really good? >> i think we are uniquely situated in the data center and as you said all of these devices that i talked about computing and connecting to the internet, they're drive being this massive buildout of the cloud that supports all of those devices. we have a great position. it is where our technology is, kind of blose the doors off the
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competition around we're invading fast in that space. competition is a good thing. a lot of people are coming after it but we feel really good both about the growth we'll see in this business and our competitive positioning. liz: see, i have known you a long time and i never heard you say blow the doors off. that is confident and inspiring. from tablets to wearables i have spoken to bryan chris san nick, how he is getting into the wearable business? do you see strength there, some growth? i know it is early stages because i ask because qualcomm wants in on that. qualcomm made the correct bet way ahead when it came to things like smartphones. how do you win in that area? >> it is a exciting but nascent market and for us we've been in what we call the internet of% things business or embedded business for a very long time. in fact i started my career in that business. gives you a sense how long i've
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been in it. it is big business, over $2 billion in revenue. it is growing quite fast, circa 20% revenue growth when you look at 2013 versus 2012. we're extending our line into low power devices. things like wearables. you heard us talk about architectures like quark where it is a very power-efficient architecture that enables these kinds of devices. >> we saw it. >> it is a natural extension of the business we've been in for a long time. it's a good example how we're committed to be in these markets early. we acknowledge we were little late to the market with regards to tablets. we'll be in these markets early. we'll be there early and set the pace. five up greats from the -- upgrades from the analysts. stock hit a 52-week high. stacy, thanks for coming first on fox business to talk about
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intel and what we know is brilliantly-run business. we'll watch it closely. thank you. >> thank you very much. liz: david, you have breaking news. david: we have breaking news about sprint's efforts to get t-mobile, one of the real sticklers for sprint where they would get the financing for this. it will cost a lot of money. now they say they have received proposals for banks from financing a bid for it. mobile. as you can see the stock is rising pretty quickly after-hours as a result of the news. sprint says it has confidence it could finance the t-mobile bid. this is really critical. that's why t-mobile is going up right now after-hours. if they, if sprint is successful at getting that company, you can bet that price will go up from where it is right now. so sprint is happy about that. and we don't know yet what the banks are, which banks are coming in to help out sprint much. we'll report on that news as soon as we get it here on fbn. liz: charlie gasparino talked about this very issue yesterday
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and how dish is interested certainly. t-mobile is the one that everybody wants to date and marry at this point. david: $31 billion. ain't going to be cheap. that's why they need the financing. meanwhile bond king pimco's bill gross is making a gigantic bet what the federal reserve will do with interest rates. trillions of dollars is at stake. "wall street journal's" jon hilsenrath whether gross is likely to be a winner or a loser
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♪ [ male announcer ] you're watching one of the biggest financial services cpanies in the country at work. hey. thanks for coming over. hey. [ male annouer ] how did it come to be? yours? ah. not anymore. it's a very short story. come on in. [ male announcer ] by meeting you more thahalfway. it's how edward jones makesense of investing. david: in the history of investment there is probably never been a bet like this large, hanging on one decision made by one central bank. pimco, the world's largest bond investor with over $2 trillion in assets under management, is betting that the federal reserve will not raise interest rates until 2016 at the earliest. a lot of folks are on the other side of that bet so the stakes could not be higher so who's right? "wall street journal" chief economics correspondent
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jon hilsenrath joining us now with the answer. jon, i didn't know you had the answer to this! you have the trillion dollar -- >> i don't know i had the answer either. david: tell us, 2016 is a long time. >> right. david: do you think that bill gross is safe in making a bet with that distance? >> well, i don't know bill gross's full position so i don't want to speak specifically about pimco but i can say a few things about 2016 and kind of where the fed stands. david: first of all, let me for our viewers -- hold on a second, jon. jon, hold on. for our viewers sake i want to make clear what the stake is for this guy. he did not have a good year in think of the think of the. when your annual return shows a minus sign clients wonder why they pay awe fee to lose money -- 2013. that is what the stakes are for bill gross. go ahead. >> press bill gross on that. as far as the fed where i have
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insight i don't know what his positions are. david: right. >> if you look what the fed expects it is right there in writing in the last minutes of their last meeting. 15 of the 17, i'm sorry, 12 of the 17 fed officials who were asked, when do you expect to raise interest rates said, 2015. so the vast majority of fed officials think it will happen in 2015, not 2016. david: that is very interesting. i guess what he is betting on that janet yellen is even softer on the issue of inflation than ben bernanke was and will insist the rates remain low through 2016, or at least up until 2016. >> there is assumption there she could get anybody else to go along with her. what he might be betting on, that he knows more than janet yellen knows and that inflation is going to be much lower than the fed is expecting it to be right now. so that the fed has a forecast inflation will gradually rise
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back towards its 2% objective. if inflation, depending where, which number you look at, it could be 1% or maybe a little higher, if inflation stays down around 1%, maybe bill gross is right and interest rates don't start going up until 2016. really depends on what happens with inflation and the economy and this is the other observation i'd make. i think, if there is a risk right now in the markets, because i think a lot of people have this view that inflation isn't going up. that it is kind of stuck well under 2%. if there is a risk right now in the market it might be a surprise on the upside on inflation. what if, you know, right now it is around 1%. what if it gets to the fed's objective by the end of the year? the fed has to start rethinking a lot of its timetable about when it starts to raise interest rates. i think a lot of positions in the market in other words, could change pretty quickly if inflation numbers start picking up. so, you know, we had a cpi
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report today which was pretty benign. david: right. >> it is not going down anymore. i think we have a keep a really close eye on that. david: well, you brought up an interesting point, which is that janet yellen is no paul volcker. she may turn out to be very strong in the end but she doesn't appear to have the kind of influence that volcker or greenspan had in bulling bullying their way through the fed board. if in fact she has majority of people, people like fisher who will become another voting member or even more moderate members, look we will have to do something about inflation, will she budge to the majority even though it goes against her interests and her beliefs? >> i say a couple things. one is something changed very importantly under the bernanke fed which is the fed as an institution became much more consensus oriented place. it has become a lot more important for the leader to have as many people on board as possible. so, i think that, janet yellen
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like bernanke, is going to have to work really hard to convince people to go along with her. bernanke had to do that. the other thing i would say, we shouldn't overdramatize how much sway, particularly paul volcker had, but volcker had epic battles with governors on his own board appointed by reagan. at one point he threatened to resign because these reagan appointees wanted fed to cutting rates and he didn't want to be doing it. he had epic battles with that fed. david: that is very interesting. this hasn't always been a chairman-dom neyed place. david: you brought up reagan. some people think if the economy does grow, even janet yellen saying the economy will likely grow above 3% than 2% next year the question whether growth immediately means inflation. >> yeah. david: under ronald reagan we saw growth go like gangbusters yet inflation came down.
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is it possible if we grow above 3% or even better than that we can keep inflation under control? >> that's what they're expecting at the fed. one reason for that is because there is what they call so much slack in the labor market. you don't see a lost wage pressure right now. it is easy to understand that, when you think about the global pressures on labor. when you think of the hundreds of millions of workers who are streaming into the workforce in places like china and india. there's a lot of downward pressure on wages globally. that could hold inflation down and give the fed some breathing room. then they have another issue to wo was the problem last decade, what happens if we operate in an environment where inflation stays low but we get some new asset bubbles. they haven't figured out really how to address that. david: jon hilsenrath, people of pimco should listen to you. the majority of the fed says 2015, not 2016. >> i don't have a beef with bill
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gross. he has trillions on the line. i don't. david: he does not have 2 trillion under assets for nothing, that's for sure. appreciate night thanks a lot. liz: hills len rath one of the best in the business. glad he is with our family. mystery solved over months of trying figure out who bought a francis bacon painting. we'll give you details of the billionaire buyer in a few moments. jeff flock looking at a surprising trend in the housing market. what are you doing? >> i hold in my hand what could be the future of the home construction industry. i have the expert right here with me. hold my microphone and tell you, what you need to know about the housing market going forward. ♪ [ male announcer ] this is the story of the little room
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david: well the latest homebuilder sentiment dipped slightly but confidence in the housing recovery remains solid close to levels not seen since late 2005. liz: what were you doing? you're in wisconsin. this is amazing. >> i'm holding up what they call a sip. structural insue lated panel. this is the way a lot of homes
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are built. we have a developer with majestic estates. you're watching one go up right now. you feel good about this industry. you're building this home on spec. >> we're building it on spec. we're positive into the way future is going. we think a lot of new housing interest is out there and we're here to show new technology that is are actually happening in the building industry. >> this is one of the new technologies. take a look at this video because i want you to see this in time-lapse. this home goes up real quick because of these sips, insulated panels. not like a stick-built home? >> no the not like a stick-built home. there is no waste on the job sight as you notice. we don't have a dumpster on the site at this time. everything comes pre-done, all the windows, openings are all done. and there is no thermal bridging in the house. >> in other words get much better heating and cooling, that sort of thing. you talk about a tick down in the sentiment today. despite that, look at
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homebuilders stocks. no loss of sentiment on the part of the homebuilders. still a lot of excitement out there about the housing industry. that's all we have got time for. i'll tell you, this is a fun way to build. who needs wood? david: when you have innovations in housing you understand why the home market continuing to do well. extraordinary stuff. >> exactly. david: jeff flock, thank you so much. tomorrow will be an interesting day. we see what happens to american express and intel after-hours. this market is looking some kind of direction. perhaps we'll get it from intel. liz: we'll watch both those stocks. meantime, thank you for joining us. we have "money" with melissa francis next. a lot of economic data tomorrow. you have to get it here on fox business. david: stay tuned. we'll see younsta tomorrow ss crd with amazing rewards. with the spark cascard from capital one, i get 2% cash back on ery purchase, every day. i brk my back around here. finally soone's recognizing me with uimited rewards!
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melissa: would you eat cloned meat? they're doing it in china and we're headed to a pig farm after this to find out how soon you could buy clones of bacon. even when they say it's not, it is always about money. melissa: remember when cloning animals sounded so outrageous? a company in china is cloning pigs like crazy. they're turning out 500 of them a year. a lot of bacon, right? what are they planning to do with all those piggies? if they wind up in a grocery store would you eat them? joining me now is pig

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