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tv   Power Lunch  CNBC  April 25, 2012 1:00pm-2:00pm EDT

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force. "power lunch" picks up the conversation on the fed ahead of the bernanke news conference at 2:00. apple rally today has the markets higher. >> halftime is over. "power lunch" and the second half of the trading day starts right now. >> and what an exciting second half it is going to be. at 1:00 on wall street i'm tyler mathisen with sue herera down at the new york stock exchange. a ton of key earnings reports have traders on their toes. and sue's going to pick that up. we're also watching gold down $13. they were just talking about it on fast. our four squares today, we are one hour away from a key statement from the fed. we're going to get their growth forecast ahead of ben bernanke's press conference at 2:15. apple, no need to say more. coke's board calling for the first stock split at that company in some 16 years. and cnbc's gary kmin ski will
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have that. we start with the fed. here is hampton with the call 45 minutes ago. >> no change in interest rates. no change in interest rates. suggested the economy has been expanding moderately. >> and we are moving the conversation forward now as we get set for the big 2:00 p.m. fed forecastd by bernanke's press conference. sue, take it away. >> indeed, ty. that's exactly what we're watching right now. steve liesman is covering the fed for us from washington. joe, a cnbc contributor and deutsche bank chief u.s. economist, steve, start with you. no change in interest rates. now the focus goes to the forecast. and given the statement that the economy expanded modestly, are you expecting any significant changes in the forecast from the fed? >> no. i think tweak is the word of the day, sue. when i look at this statement
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that just came out comparing it to the prior statement, very, very modest changes. i don't think the -- i think the fed is very conscious of not wanting to change market expectations from where they are right now. i think those market expectations are essentially that the bar is relatively high for the fed to come in and do more. and that that exists until the economy clarifies itself one way or the other. either stronger growth or weaker growth. at the current forecast i think what's going to happen in the current numbers out, sue, is the fed will tweak a little bit. it's a little under where gdp is running so far. we're running maybe in the 2.75, 2.8, fed is at 2.45. employment better than the fed is forecasting, inflation a little worse. i think the real drama, sue, will be the statement by the fed chairman. >> all right. let's turn to joe. at the press conference indeed which of course steve will be at. tweaking is the word that steve is using. do you agree with that? and what will be tweaked, do you
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think, by the fed? what's the language you're going to be looking for? >> we think gdp will revise up lightly. tweak is the right word. maybe 2.4 to 2.8 this year for growth. it's not great. but it's not recession. inflation number be up slightly. on unemployment, they have to lower that. we think probably a tenth pretty much for the outer. so what's ironic the fed lowered gdp forecast since last november, but they've been lowering their unemployment projections which actually tells us at some point, given what's happening in the labor markets, this late '14 language is probably too late. i think it will occur much earlier than that. but right now i think we'll just get some tweaks. >> you'll be with me later. we'll talk more about what to expect in the news conference. and a reminder at 2:00 p.m. the fed does release that fed forecast. we'll be pouring through that.
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and fed chairman ben bernanke will have a news conference live. steven weiss is with us to do that. dicey, steven, because you have two very important events ahead of us. but right now the markets came off a little bit after the decision on interest rates or lack of a move on interest rates. how would you play it? >> well, i wouldn't change the way i'm playing from yesterday. i don't really care what the fed says in their forecast unless it moves one way or the other. they're as bad as forecasting as the rest of us. steve liesman hit it dead-on. the bar is high for qe-3. i love jpmorgan, it's very, very cheap. they're buying good assets from distressed sellers in europe. europe is still melting down. and then i like defensive growth. wellpoint recorded a very good quarter. the stock is up. i think it's incredibly cheap. look to a company like hain, the
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health food company, that's on their own growth track and immune from the cycles that we've seen through it. so go to growth. stay domestic for the most part so you don't have to worry about china and europe. >> all right. and a 2% gain in hain celestials. ty, to you. >> move onto apple. the other huge story of the day. let's take a look at the stock. any doubts that wall street has had over the past few weeks seem to be gone based on that huge earnings report. topeka capital raising price target above $1,000. the blowout result demonstrates how quickly apple fever is catching around the globe. goldman's bill shell p raising his price target from $850 to $750. he says out of all the good news in the second quarter, apple's surprising margin is likely to boost long-term earnings and cash flow generation. "street signs'" brian sullivan has a different take. first turn to scott wapner. scott, you talk to a lot of
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traders. they don't like to admit ever that they got something wrong or surprised. but are they more surprised than the public is by this number? >> i think they're blown away like everybody else is. 35 million iphones. 47%, that was well ahead of expectations. there were a lot of concerns, brian and tyler, coming into the earnings report. you had talk of a technical breakdown. it had breached the 50-day moving average. traders afraid to get in the stock at that point because it had a pullback of 10%. they were worried about seeing another pullback. now it raises the issue of what do you see here? we had some questions from traders today saying if the stock reached $610 maybe it was now the time to sell. just given the technical area the stock has been in. but it continues to defy expectations. >> to me this feels like who needs verizon, who needs at&t when you've got china. but, brian, has apple effectively sucked all the air out of the room in technology? and has all -- more importantly, sucked all of the money that might otherwise with going to
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good companies? >> i think so to a point. apple is 17% of the nasdaq 100. which means the other 99 companies represent about 0.08. if apple gets the 24% of the nasdaq, they're going to have to rebalance the nasdaq 100. they have certain weighting rules. you want to watch that. as the price goes up, if it gets too heavy, they might have to rebalance it which could impact the stock. there's ten stocks in the nasdaq 100 trading with a p/e below ten. i think good companies are getting ignored because everybody's focusing on apple. >> i have nothing against apple, but if you're tempted to come in, i say you dollar cost average. >> names like qualcomm, broadcom, number of stocks riding the apple halo. >> skyworks. >> the list goes on and on. the traders i talk to, they're buying those stocks today too. >> gentlemen, thanks a lot. we'll see you about 2:15 or
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thereabouts. sue, to you. >> don't blink. big stories don't stop today. gary is joining me. he got the interview of the day, i would say the interview of the year with goldman sachs' ceo lloyd blankfein. good to see you. >> thank you. >> nicely done, my dear. >> means a lot from you. >> you cover a lot of topics, certainly. >> we do. >> but one of the keys i think had to do with risk and regulation. everybody wants to know whether there's a future for the investment banks. and you asked him about that. >> let's take a listen to what lloyd had to say in terms of the regulatory environment and how he sees it right now. let's take a listen to that. >> as the market gets safer because certain of these adjustments, there will be no greater beneficiary of that than the firms that manage themselves well. the biggest threat to goldman sachs, ever, the existential threat was the poor performance and bad risk managing practices of some of our competitors with whom we had relationships. >> do you yea with him? >> i do. if you go back to 2008, it was
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really poor risk management. it was not more regulations that would have changed the outcome of what happened. yes, it might have changed the timing of it, but at the end of the day if -- unless you basically regulated away the ability for banks to take any type of risk at all, what happened in 2008 would not have been stopped just by more regulation. >> you also pressed him on the issue of the co-role and ceo of chairman of the board. >> correct. >> and then you went onto say what was his future going to be at goldman sachs. >> yes. we talked about succession. let's listen to that as well. >> i have no plans to read. i read the same papers you do. you may think they get it from me, i can tell you i have no idea where they get it from. my plan is this is a terrific job. it's interesting. you get to be in a lot of different industries. i get tremendous support. >> you got the answer there. lloyd blankfein will -- the way
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i read it is he will continue. he feels he's got a very important mission here in terms of making sure that this institution is well-positioned for the regulatory environment that we talked about and the business world ahead. he feels that he wants to have his legacy as somebody who helped navigate this company through the next ten years. >> all right. so that's just a small portion of what you covered with him in this interview. but if you -- you know, you ran money for a lot of years. >> i did. >> it was a peer-to-peer interview. that's what he does as well. if you have to invest against that, put your investment manager hat on and tell me what you make of those comments and how you would invest against it. >> this is what i think. if you are an investor in goldman sachs or any of the investment banks, what i heard today was we're going to try to manage these businesses assuming that the regulatory environment continues to get even more difficult, but we're going to have to find ways to create new revenue streams and grow the business even with those sort of impediments in the way.
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so the idea is from a return on invested capital stanstantdpoint, manage expecting the worst and hold on the upside. there was a lot of transparency and realism and the idea that a lot of mistakes have been made and it's going to take a long time to change the image. by the way, on the image, i must say i ran over here from across over on -- i do know mr. alec baldwin -- >> he was tweeting about you. >> apparently tweeted about me and something along the lines about this discussion with lloyd and i'm not going to repeat what he said, but this is part of that perception problem. you see, guys like alec baldwin don't understand that he thinks he's a champion for sort of middle america and the small business owner. what he doesn't understand is that at this conference i was at today, sue, most of the institutional noviinvestors, th are there managing money for the very people that alec baldwin
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thinks he's out there trying to protect. >> keep that thought. we're going to bring you back. we're going to talk more about this interview and perhaps mr. baldwin as well. >> yes. bring him on. >> let's go to the stocks. and brian shactman. >> thank you very much, sue. listen, people reacting to an upgraded info sis from neutral to buy. word got out and popped to the upside. went from negative to positive by about 1%. tyler, back to you. >> brian shactman, very much. invitation to alec baldwin, we'd be happy to hear from you. mortgage rates dropping to record lows. real estate correspondent, diana olick, is in washington with more. diana. >> that's right, tyler. 4.04% according to the mortgage bankers association. that's a new record low on their survey. and you'd think it would spark refis for sure and purchase apps for sure but not so much. refis fell 5% week-to-week. the purchase index rose 2.7% after an 11% drop the previous week. yes, this is a volatile number.
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take the four-week moving average and you see purchase apps down just under 1% and refis up just under 2%. the trouble is just about everyone who can refi already has. and, remember, it's not always about the rate. but the equity you have in your home and whether or not you can qualify for that rock bottom rate based on real actual documentation. a lot of folks making the argument that these lower rates are helping buyers buy more house. therefore juicing prices. zillow out with a report claiming prices are bottoming. another report saying the housing recovery has taken a step back. you decide, sue. >> well, that's why they have to go to the blog, right, diana? >> exactly. >> thanks a million. two blue chips bursting out of the gate with stellar earnings reports this morning. boeing profit beating wall street expectations. the world's largest aerospace benefitting from increase in commercial airline deliveries. boeing traded on the upside by better than 4%. cat's first quarter profit up
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29%. the world's biggest maker of construction machinery also increasing production outlook for the year. cat stock is on the downside by almost 4.75%. coca-cola's board recommending a two-for-one stock split there. it would be the 11th split in the stock's 92-year history. and the first in 16 years. shares hitting a 13-year high today. and they are up about 1% and change. ty, back to you. >> vegas, baby, vegas. las vegas sands stock is moving right now. a company reports after the bell. shares are up 24% in a year. jane wells is in vegas on the strip waiting for her friends from the gsa presumably -- no. she's waiting for the numbers. jane. >> tyler, yeah, investors today putting it all in the black i guess for sands. analysts expect to see significant growth thanks in large part to kotai island. the concern among some analysts is what's good for coty may
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not -- still expecting 23% top line growth for the first quarter. 2.6 billion and 60 cents. on the call we hope to learn about their plans in spain, et s in asia. wells fargo going against consensus and thinking sands lost share macau. but i hate to say it, tyler, nobody really cares about vegas that much now because it's less than 10% for ebitda for the company. back to you. >> thank you very much. it is a big time day here on cnbc. we have of course covered apple, the fed, lloyd blankfein and earnings. but we're just getting started. next up, walmart and the deal to get in near the pyramids of mexico. we're going to take you there live. more "power lunch" in dos minutos. ♪ stream, stream, stream...
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welcome back to "power lunch." brian shactman here. if you're a stat geek or chart geek, you got to look at gold. it sold off sharply after the fed with maybe the assumption of no qe-3 and maybe risk-on off interpreting a little bit we went down sharply from flat and peaked in positive territory seconds ago. another reversal, tyler, in gold. >> brian, thank you very much. a close eye on disney and dreamworks animation shares today. two of the film companies reportedly under investigation now for their dealings in china. julia boorstin digging in on
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this story. julia, why is this such a big deal for the studios? >> well, tyler, these reports the s.e.c.'s investigating whether studios paid bribes to chinese officials is a big deal because hollywood is relying on china for growth. china is now the second biggest movie market and the studios are finally making headway. disney's bob ieger and dreamworks animations jeffrey helped broker an agreement with china to raise the number of foreign-produced films that can be shown in the country. both studios recently announced major investments to produce movies in china. and right now bob is in china. neither the s.e.c. nor any of the studios would confirm the reports, but it makes sense that as the studios step up their presence, the s.e.c. would be increasing
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s&p 500 up about 1.25%. wonder why? look no further than apple. we are looking down to the close of metals in a couple of minutes. after a big selloff earlier today, gold is coming back. basically erased most of those declines from earlier today. three minutes away the countdown to the metals. a fast acting fo. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. [ male announcer ] while others are content to imitate, we'll continue to innovate. the lexus rx. why settle for a copy when you can own the original?
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welcome back to "power lunch." brian shactman here at the market's desk. look at shares of southern company. they reported an earnings miss before the opening, but things have been climbing back ever since then. we just got word that the q-2 guidance for eps lower than consensus. another leg lower in the stock. momentum heading toward the flat line now taken away. sue, back to you. >> brian, thank you very much. right after the fed decision on interest rates, the metals
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market sold off aggressively. sharon epperson's tracking all the action from the nymex. hi, sharon. >> hi, sue. we have definitely seen seesaw action in the gold market plunging to 1625 an ounce. but holding that key support level and rallying all the way back to 1645. and we're only a couple dollars off of yesterday's close right now. the seesaw action has a lot to do with traders really trying to digest what was in that fomc statement and whether or not the fact that there's no more qe-3 on the table for right now. that is something that was expected, but the inflationary comments was something that a lot of traders were interested in hearing. tell me what you're seeing in the fed and what you're anticipating with the press conference what that will do to gold. >> i think it will be interesting to see what happens in the press conference in the q & a. the initial language seemed very bearish that the economy was doing better than anticipated. but in reality the fact that they're keeping rates very low
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is kind of a pseudo qe-3. and i think that's why you saw gold hold at 1625. it's held that number a few times now. now trading 1643. i think it's very bullish for gold right now. >> sharon, what does he want to hear from the fed chief? >> what do you want to hear from the fed chief? >> i think status quo. i don't expect qe-3. the fact that they're going to keep rates low until 2014, if they follow through with that, should be very bullish for gold. >> sue, another thing traders are talking about is central bank buying. that's also been supportive of gold. regardless of what the fed is saying, that buying action is keeping prices well supported. >> indeed. thanks a million, sharon. >> sure. >> wall street's love affair with apple is back on after being in correction mode. shares are dramatically higher in today's trading session. we can see that apple right now is up just under 9% on the trading session. jon fortt's been working on apple's rise since the minute
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the numbers came out last night. what do you hear -- you know how wall street is, jon, they're looking at the next quarter. what are you hearing? >> the next quarter on the call tim cook said it's going to be heavy macs and ipad. on the mac we're expecting new macs to come out redesigned, probably. more like the mac book air. good time to use flash. flash is cheap. we've seen that hurt sandisk. ipads are supply constrained. they're selling those as fast as they can make them. expect a big ipad quarter. >> the developers conference is going to be june 11th. what are you looking for from that particular event? >> well, the developer conference usually isn't a time for apple to announce new hardware. they haven't done that recently. they've taken out time to talk about the mac os and more importantly ios 6. that's going to be the new operating software for ipads, iphones and that kind of family of devices. i also expect an update to
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icloud. i was talking to an apple executive not too long ago who was saying now the application teams, people from iphoto to imovie know they have cloud to use. i wouldn't be surprise today see that built into more products, sue. >> jon, thank you. who's making money today in apple's surge. maybe you are if you have invested with these mutual fund giants. top apple shareholders. fidelity, blackrock, vanguard, state street t. rowe price among others. tech having one of the best days since december. >> that's right. apple's providing strength to the overall apple ecosystem. take a look at some of these chip suppliers. we have broadcom and qualcomm moving higher today. avago has many times dubbed as apple's number one friend with benefits. it's amplifiers are said to be in the iphone. that stock sharply higher today. and switch over to nuance
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communications posting gains speculated to be the maker of the popular siri, which is an attractive feature of the iphone 4s. lastly, look at zag. doesn't make parts used inside the iphone. basically a popular maker of the accessories like cases, screen protectors. that stock also coasting on the good news from apple. >> seema, thank you very much. action here at the nyse ahead of mr. bernanke. bob pisani joins us. you're watching the real estate investment trusts at this point because you said there's been a change in leadership. and they're it. >> it is. they're the new leadership group. the fed's had a low interest rate policy for years. and the real estate investment trust community is the big beneficiary. they're able to borrow rates and refinance at exceptionally low numbers. reits at a four-year high. also improvement in the fundamentals, guys. look at the chart here. we're seeing apartment building, terrific rents are through the
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roof. the business there is outstanding. we're also seeing high quality malls recovering as well. that's also helping the real estate business. you've also seen business travel strong. so the hotel business is doing exceptionally well. suburban office buildings, so-so. overall we're seeing real improvement in the real estate business. how about the laggards? sue, we have a new laggard. all the big name financial groups. all the big names, morgan stanley, jpmorgan, citi, sue, ever since earnings came out, this group has been underperforming everybody else. still not a lot of growth out there. >> no, there isn't. thanks, bob. let's go to brian shactman with news on exxon. >> sue, it's fascinating. coke might split, we have buybacks all the time. what else can you do? you can increase your dividend. we had a nice pop in exxon mobil. they're increasing dividend by 21% from 47 cents to 57 cents.
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look at the dividend yield. at 2.2% before the hike. it will be a healthier one after that gets invoked. >> thank you, brian, very much. we'll watch exxon mobil as it goes through the trading day and see whether or not the street rewards it for that. let's find out how bond traders are positioning themselves ahead of the fed's economic forecast. minutes from now. and then of course we have mr. bernanke's news conference. rick santelli's tracking all the action at the cme. ricky. >> well, i'll tell you, the fed announcement and statement put a lot of volatility in the markets. but it really didn't alter the landscape of the established range. that was really more the 5-year note auction. look at the intraday charts as you move down the curve. the 5s dramatically effected at 11:30 eastern with the really positive auction. but basically the range was in tact. the federal reserve meeting incited the markets. the 30-year, which involved
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directly in the twist in terms of buying, people are a little euphoric the twist would get extended. how do i know that? look how it rallied right before the statement. and then it came straight up and broke six basis points. dollar index, it can't hardly hold positive on the day. very little volatility. back to you. >> rick, thank you very much. less than 30 minutes away from the fed's latest economic forecast. it's set to be a market mover. and with rates on hold as the economy actually getting better than perhaps the fed thinks it is? chief u.s. economist at deutsche bank, good to see you. welcome back, joe. >> thank you, sue. >> we talked a little about this at the top of the hour. tell me what you think the economy's doing versus what the fed interprets the economy's doing. >> i think the fed is acknowledging things are better than what they thought earlier in the year. when i think behind closed doors they were more worried in europe than they let on. they extended the language fed on hold until late '14 to get extra stimulus into the markets
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and treasury. as things are getting better and the world isn't ending, thank god, the fed is starting to mark those numbers ever gingerly higher. >> what do you want to hear from the fed chief? either in the forecast or in the news conference? >> what i want him to say he won't say. i don't think rates should be where they are. i think it's causing more problems than it's helping. but i think dallas president fisher said something on cnbc three months ago. i thought it was important. he thought the january fomc statement talked the economy down. i would like chairman bernanke not cheery but acknowledge things are getting better and moving in the right direction and not harp so much on the downside risk because i think that really does hurt business confidence. >> on the other hand there's europe looming out there. spain's teetering on the edge. the dutch government basically fell. they couldn't come to terms on austerity measures. it calls into question whether or not europe is going to adopt the austerity measures that many people think they need.
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>> that's true, sue. that is a risk. i don't think at this point given the ltro and ecb's extraordinary actions that's as big a risk which the funding markets is not showing the tightening that was there before. yes, that's a risk. but the u.s. is a relatively closed economy. exports are only about 12% of gdp and we've never had a recession led by some other nation or bloc. >> that's a very good point. and a great place to leave it. thanks, joe. >> thanks, sue. >> appreciate it. just a reminder that the fed chief, mr. bernanke, holds his news conference at 2:15 p.m. eastern time to explain his outlook for the economy. "street signs" of course will carry it live. stay with cnbc throughout the day. there are a lot of other big headlines we want to recap for you driving today's trading session. shares of coca-cola hitting a 13-year high. the soda giant board recommending a two-for-one stock split. fellow dow member dupont moving higher. boosting dividend 5% to 43 cents a share. and harley davidson revving up
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earnings. beating the street on strong u.s. sales. it expects to ship more bikes this year than previously expected. coming up next on "power lunch," goldman sachs' ceo lloyd blankfein laying it all out on the table. the firm's muppet scandal and will this hurt or help his image. alec baldwin weighing into all this as well. stay tuned. you don't want to miss this. ♪ dave, i've downloaded a virus. yeah. ♪ dave, where are we on the new laptop? it's so slow! i'm calling dave. [ telephone rings ] [ male announcer ] in a small business, technology is all you. that's why you've got us. at the staples pc savings event, for a limited time get up to $200 off select computers.
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joins us as well. let's start, gary, with your interview. very interesting with lloyd blankfein. alec baldwin tweeted about it. let's look at what he said. he's casting you as the most highly plaid launderist in the world. he said he was watching the interview and you did everything but wash his socks. were you attempting to wash his socks, gary? >> tyler, we've known each other a long time. you know this is exactly what is wrong -- >> gary, we're having a problem with your audio. let me turn to john carney. john, part of the problem with goldman has been its public relations work here and even mr. blankfein admitted that. do you think they're starting to turn it around? >> i do. i think this is a major change for them. we haven't seen lloyd blankfein talking to cnbc or anybody else for that matter for about two years. having him come out publicly i think should help the firm.
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they tried to sort of hide behind the scenes for a long time. that didn't work out. it's actually been a disastrous policy. so having lloyd sit there, smile, show that he's a human being, that he's willing to talk, that they have nothing to hide is a very, very good thing for the firm. >> and, gary, back to you now. just pick up there on the thought. this looks like goldman trying to turn around what had been notably bad fortunes in the public affairs area. >> i agree with john. and john knows. this is an attempt, and it's the beginning of an attempt for people to understand more about the business. go back to alec baldwin, exactly why this is a good strategy. alec baldwin tries to come across as though he's there as a representative of middle america, main street, small business owners, goldman sachs is a bad institution, what alec baldwin simply does not understand, tyler, is the conference i was at today, the goldman sachs asset management conference, the clients they are managing money for are the institutions, the retirement money, of the very people that
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alec baldwin thinks he's coming out and representing. that's where this disconnect is. >> that makes the pr job all that much harder, doesn't it, gary? that's why he needs to talk to cnbc, he needs to talk to you. if that perception is out there among well-educated people, it shows that they have a big battle ahead of them, doesn't it? >> well, i think they've made huge moves. and i think that the clients as lloyd pointed out this morning, the clients have stood by them. they just reported quarterly numbers. the business is facing challenging times, but this idea that goldman sachs is going to be used as a poster child for some of the things that happened in 2008, what i say to alec baldwin is, alec, it's game over for that. move on. >> the invitation stands. please give us a call. we work for the same company after all. give us a buzz. move onto apple, shall we, john carney? there was a lot of concern before the announcements of earnings yesterday that apple was going to suffer because some of the carriers were going to end the subsidies that reduced
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the cost of the iphones very, very dramatically. did tim cook dispel those worries? >> he did a very good job of saying, look, people want the iphone. if the carriers stop subsidizing them, people will move to other carrie carriers. in other words, competition is going to ensure this carrier subsidy for the iphones that adds up to hundreds of dollars, they're about $850, you pay about $200 when you buy them. apple pockets about $600 from that. a lot of that comes from the carriers. they're able to keep that subsidy in place because it really helps them sell the phones and it's not going anywhere. >> sue, who needs at&t, sprint and verizon when you got china? >> well, that's a very good point. i think that's what everybody missed in their numbers except john carney, who predicted that they would have blowout numbers. and indeed they did. kudos, john. >> as i said earlier today, i think apple deserves to be a core holding in your portfolio. it probably already is if you're
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in an index fund that matches the s&p 500. but, gary, is there any way to buy this other than to dollar cost average right now? >> ty, every time if you go back over the past couple years there's been a sort of correction in apple, it's been a good opportunity to average in. if you want to look at it, as you point out as sort of a separate asset class, something i've been ridiculed for mentioning over the years, it's such an important company, such a large component of all the indexes. i think when you do portfolio construction, you have to think about -- just in terms of china, what you saw last night with apple is that the real growth, whether verizon or at&t want to cut subsidies or not, the real growth here in terms of iphones is going to be international. it's going to be those growth markets. that's the focus now. >> let's move really quickly to our final topic. it seems more and more colleges are hiking tuitions for harder majors. ucla, florida state, growing number of public universities charging more money for math, science, engineering students, the so-called stem curriculum on
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the grounds those graduates will get higher paying jobs. is this a good plan or simply unfair? shouldn't we be charging, john carney, less for these majors because that's where we want people to be? >> yes. it's ridiculous what the colleges are attempting to do. basically they have a broken business model. they have inflated the price of college education so much that people are coming up with all kinds of new alternatives. they realize that on a long enough time horizon their costs have to come down. they're trying to milk it out by having computer science majors pay more. this isn't going to work. a lot of the most brilliant minds in, around, coming into technology didn't even graduate from college. the more expensive they make it for people to pursue a degree in computer engineering, they won't have anywhere to go. >> colleges have to cut costs because they have gotten very bloated. gary, would you pay more if your child wanted to go to one of these schools and want today go into applied mathematics? >> if he's going to get a higher
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return on that invested capital and it was going to cost more but a better investment outcome, surely. stay with the acting theme for a second. my friend alec baldwin. if i go to college and major in aktding and drama, am i going to pay the least amount of money? i'll leave it at that. >> take up yoga, gary. let's switch gears now and turn to rupert murdoch. he's been hitting back hard against allegations against him. he's back testifying before an independent panel in london. kayla tausche is there with the latest. kayla. >> well, ty, the inquiry of rupert murdoch was the most highly anticipated appearance of this -- call it interrogation since it began.the committee to the task at hand. challenging a storied mogul not only on a scandal that's taken on a life of its own but also on claims he kept cozily relationships with the revolving
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door at number 10 downing street. >> frankly, i welcome the opportunity. i've never asked the prime minister for anything. >> today murdoch distanced himself from prime minister david cameron's conservative party but also for allegations that his news corp only sported candidates most likely to win in order to protect his own commercial interests. now, today that laundry list of officials included former prime ministers margaret thatcher, tony blair, gordon brown, scotland and michael bloomberg who's re-election he supported as well as barack obama. and he said his newspapers in the u.s. took an opposing stance to that. but given 60 years of empire building and political hub nubbing, ts committee has a lot more work to do tomorrow even though it's only a half day. and, tyler, we'll report live throughout the day in a very windy and rainy london town.
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back to you. >> looks like a perfect london day there, kayla. thanks. up next on "power lunch," investors gearing up for the latest fed economic forecast just minutes from now. it's going to be a market-mover. how traders are positioning themselves. that's next. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years. [ mujahid ] there was a little bit of trepidation,
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not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪
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here's sue herera. here's steve grasso and matt cheslock. we've been talking about the meeting. what are you guys looking for? >> put it this way, the market was done a service today because we didn't hear about uk, double dip recession, first time since '09. we didn't hear about that. we didn't hear about anything ugly coming out of spain. what we did hear about was apple and the chairman of the fed reserve. so i think the market has been dealt a little bit of a respite right now. i just want to hear what their bias is, what their length of time is. >> how important is that to you, matt? mr. grasso here is in a better mood because of the fed chief
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and you seem to be too. everybody seems to be cautiously optimistic about this point. >> i would use cautiously optimistic in my tone as well. i think what we're looking for now is the only place where you can find a yield right now is in the equity market. >> right. >> that's what people are searching for. we just saw exxon raise their dividend. that's a good thing for the market right now. we can outlook, apple right now. focus on other things towards the end of the week, chevron and exxon will set the tone. i'm not looking for anything out of the fed right now. we trade from headline to headline to headline right now. i'm not looking for anything forward from them. >> people are looking for yield. you saw the volatility spike a little bit. but when you look at what's really perplexed me and we spoke about it yesterday was apple. i was shocked to see this bounce. i saw that move from 6.44 to 555 and then all those things that created that move, they still exist. but it's all about the margins. and guys who were talking short, you're looking at one of them right here, we're really run over. >> you still have a smile on your face though, right?
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thanks, guys. appreciate it very much. reminder cnbc will carry that news conference and the forecast live starting at 2:00 p.m. eastern time on "street signs." you don't want to miss it. "power lunch" is back in a couple minutes. ♪ i'm making my money do more. i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. [ rodger riney ] at scottrade, we give you commission-free etfs, no-fee iras and more. come see why more investors are saying... i'm with scottrade.
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you are looking live at the podium where fed chief ben bernanke just a few moments from now will be holding his news conference. cnbc will carry it live. previous to that the fed's economic forecast will come out updating the markets. on the upside on the dow by 63. the s&p 500 by 16 and the nasdaq by better than 2%. ty, over to you. >> sue, thank you very much. steve weiss, i can't get used to the idea the fed chief holding news conferences. is there anything you would like to see him say or specifically not say? >> what i would like to see them say is pay some attention to europe and china other than just the throw away statements. to me in my mind that's clearly what's controlling our markets. you take a look at cat's report. very good except what's happening outside the u.s. so address it and let's hear what's going on. >> england in a double dip recession. >> absolutely. >> as of this morning. steve weiss, thanks very much. that will do


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