>> just a reminder that we are

watching the vatican very closely. if we get the smoke, either black or white, we will go to the shot live. on the other side of the screen you see a beautiful gem. it's the world's largest flawless diamond. it could sell at an estimated 20 million dollars. it's 101 carats. this was carved from a 236 carat rough diamond. it took over 21 months to polish. >> as we look at vatican square there with the crowds gathered, i was looking at part of my research and seeing that most of

the conclaves tend to last between two and five days with decisions usually coming out on day three or four. >> we're watching it very closely. >> that will do it for today's edition of "power lunch." >> "street signs" begins now. and painting two very different pictures of today's economy. we have both sides of the story. america's budget bonanza, loan one being released in minutes. what the heck is going on in washington? and outrage of the day. inside america's big sugar bail-out. and wait until you hear how much soda the average american drinks every single year. happening right now, we are on vatican city watch. we're still waiting for some

smoke to come out of the smokestack. you can see there, the chimney at the vatican. if we see white smoke that would mean we do have a consensus of a pope being picked. if there is black smoke, that means there is still no consensus on a new pope. we will bring that to you as soon as it happens here on street signs. >> we are holding down the fort here at cnbc while brian sullivan, who has currently picked the short straw is currently in las vegas. hello to you, brian. >> reporter: thanks very much. from the pope to home depot we are here at the company's annual product walk. hundreds of suppliers. and we have got a great show lined up. we're not going to dig into the data. we're going to go into the front

lines. and all kinds of stuff in between. should be a great show. should be with us more than a minute or wo. then we have a ceo panel. so we're going grill. we're going to seed our lawn, we're going to talk about cabinets. they built an entirely out of scratch home depot store in a convention center in las vegas. what happens in vegas will not stay in vegas. we're going to bring it to you. >> all of those things for just one hour of tv. if we can do it, we will be legends. we will get back to you in a second. in the meantime, let's take a look at those markets. where we stand right now, the dow could have its first nine-day winning streak in 16

years. >> maybe the economy here in the united states is stronger than anybody's giving credit for. >> that's the point. the better economic news is causing people to put more money here and a little less men. there is a real trend that has been developing. let me just show you, the s&p 500 versus china. this is just since the beginning of february. there is china which has been steadily to the downside on concerns that they might tighten things. here is the s&p 500 which has been a slow this down trend is

affecting commodity stocks. some of the big emerging markets are also to the downside. here is all your main other emerging market components. this is all in a single exchange rated fund. again, here you go since the beginning. there is the s&p. and here is the eem, which is a basket of seven or eight. bottom line, you're right. we have the best economy in the world. some money coming out of the emerging market countries. >> thank you very much for that. in the meantime, breaking news on america's budget battle. the federal budget just came out as president obama meets with the speaker john boehner. >> mandy, you're looking, i think, at a live picture of the

senate budget committee where the chair woman is laying out her budget proposal. it includes about 1.85 trillion dollars in deficit reduction. half of that from tax increases, half from spending cuts. she has a $100 billion of stimulus put in there. this is while the house republican party is marking up its budget committee resolution. no tax increases. meanwhile the president is meeting behind closing doors now as part of iz his effort to sel his proposal. his own is not coming out until april 8. that is less the point at this stage. all sides are looking at the regular order process as the last potential hope for a grand bargain mixing entitlement cuts

and tax increases for this two year congress. mandy? >> thank you very much for that. and in the meantime we will be watching for speaker john boehner later on in the show. we will toss it over to you in vegas and your very special guest. >> thank you very much. we are pleased to be joined by martha stewart, who needs no introduction but i will give one anyway. thank you very much for joining us here. before i get into retail sales, i will ask about the trial. >> the judge has ordered all parties to mediate. we are working with a mediator right now and we have until april 8th to hopefully come up with a satisfactory solution to this contractual problem. >> i understand there is smoke now coming out of the chimney. >> what color? >> we are not sure if it's white or black. it's grayish. a little bit hard to tell. remember, folks -- if it is

white smoke, that means that they have selected a pope. if it is black, that means they have not. and they will resume voting tomorrow. it's obviously very difficult to tell. it is a 600 plus year-old ition. we are hearing that it is white smoke. but that's not confirmed. let's go to marry thoy tompson. >> it is white and there were cheers from st. peter's square. this means that the 115 cardinals have elected the 266th pope. he will, of course, lead the catholic church. we won't know who the pope is probably for about 65 to 70 minutes. this is basically what happens. once the election has taken place, he is asked if you accept your position?

and he changes from his red robes of a cardinal into the white robes of a pope. the cardinal electors approach the pope in homage. there you hear the bells ringing in st. peters. cheers coming up from a crowd that has been standing there for the past couple of hours. this appears to -- this is the third session that the cardinals have had since the conclave began. it took anywhere from five to six votes. again, we will hear, probably within the next hour or we will see within the next hour the next leader of the catholic church. brian, back to you. >> wow, mary tompson with the breaking news. we have a new pope. we're going to rejoin our

interview with martha stewart in just a second. big news coming out of the vatican. >> we are very keen to see whether or not, and i know it could be a long shot, is whether it's one of the north american candidates. mary, i'm going to throw it back to you. >> we don't. if history is any guide. i want to pick up on who are the faifts. three of them are from north america, two of them from europe and two of them from africa and two from south america. two from the united states include timothy doland from new york. and shawn o'mally from boston. just to give you background on each one of them.

he wants to bring back the joy to religion is something he has been focused on. sean o'malley is multilingual. something that is that has provided him with high praise from others in the college of cardinals. he really, of the nine potential front runners, he is the one who is considered the outsider. he has nerved in the vatican as many of the others have. another leading candidate -- we will know who it is within an hour or so. >> thank you very much for filling in the details. we have larry kudlow phoning into us. you are a roman catholic

yourself. what do you feel the church needs right now in this new pope? >> i liked a lot of the things i heard from mary. i just divided this up into a couple of issues. cardinal dolan was my favorite because i happen to know him. i somehow don't think it will be him. the vatican bank is an absolute mess and it has got to be cleaned up. and the new pope has got to appoint brand new people to the board and the key officers of that bank. that bank is such a darn mess right now and it's got to be cleaned up. otherwise they will be in trouble with local authorities. second, i think mary mentioned this. the issue of cleaning up the various sex scandals. there has to be a clean sweep. more people have to be fired. more people have to be changed. the church has to be, really,

has to be absolutely holy and perfect on this issue. it must be cleaned up. and third is the evangelizing that i think i heard mary mention. one of the issues for pope benedict was to bring more people back into the church. those who have left the church. for example in europe, which has become a very secular place. and also to go and recruit and tell jesus' story all over the world, to make the catholic church much more evangelical. much more meaning to people in their personal life, which is one of the reasons that i converted many years ago. >> this is exciting. >> indeed. larry, thank you very much for that very personal note. we are awaiting the announcement of who the new pope is. >> i want to bring something to you. i was speaking to a professor of

management. what will the new pontiff need to lead theture nch the coming years? he will need a strategic vision for the church. in addition he needs team-building skills. he needs to have someone come in and say basically, we need to work on this together as professor o'rourk told me, he said they don't play well in the sand box over in the vatican. it's a very competitive place. third, he does need strong financial skills. this is interesting. it's, i guess you could say, a new quality that they might be looking for many a pope. if you recall, benedict xvi was known more as a thee lo gin.

lastly, professor o'rourk saying that what he needs is charismatic empa think. he needs to convince the flock that he has a better path for them. anywhere from let's say an hour to about an hour and five minutes before he is introduced to the world and to people in st. peter's square. he goes and changes out of his red robes into a white robes of the pope. then he is introduced again on the ball co-ny. it is a bit of a thrill just as larry said, to see this happen. i think everyone's hope is that some of the changes that need to happen in the church will happen

under the next pontiff but of course we will see. back to you guys. >> mary, thank you very much. we will rejoin our interview with martha stewart. it's tough to top that news. you know cardinal dolan well. do you think there is a chance that we could see an american pope? >> there are so many more catholics in other parts of the world that it might be wiser to have somebody leading the church from a more catholic-centric part of the world. i am designing papel white and purple for my new line. >> we're tieing the news together here. you're in pretty much every product line that has to do with the consumer. how are you seeing the u.s. economy right now? >> we're very excited that consumers, homemakers, are

buying our kitchens. we have wonderful designs here at the home depot. we're trying to make them simple enough that once you rip out a kitchen you can go and get a kitchen. the kitchens are beautiful, affordable and a good investment for the homemaker. >> are you seeing your customer spend more? are they buying higher ticket items? >> not necessarily. but they are spending on their homes. they are buying paint to paint their rooms, to redecorate. they are buying our decorative items like curtains and curtain rods. they are certainly looking at floor coverings and re-doing things. they are not out there buying a lot of houses yet. if that happens and mortgages become more plentiful, we will see a better year for home depot. >> would you say from your point of view that the consumer is back? >> i think the consumer is coming back. >> i'm an optimist.

i certainly hope that the turn around is occurring. >> do you notice that when the stock comes back the consumer comes back? >> they are tied. they feel more optimistic. >> does it affect your view of the business? >> definitely. the home depot is doing very well. the holiday lines, for example, you can choose whether to spend on holiday or not. we had the best year we have had. >> do you think we will have a better holiday 2013 than 2012? >> i certainly hope so. >> you hope so or you know so? >> i'm definitely more optimistic. >> i know you said at the top and then we had the breaking news of the vatican.

do you stand behind ron johnson? >> he is here and i hope he is certainly here to stay. his vision is strategic and good. it just got ahead of itself. it takes a while to change an institution. i think it all happened a little too quickly. it takes a lot of. >> thank you very much for joining us. a good practicing catholic here. we're trying to tie in the papal news and home depot news. >> we are very excited here on street signs. not just because we have so many ceos coming to you exclusively, but as you can see on our screen right now, the white smoke which shows that we have picked a

pope. the cardinals have decided on the same man. we do not know who it is. we are hopefully going to see who the new pope is when he comes out on to the papal balcony later on in this hour. we're still waiting for that. we have seen the white smoke, heard the bells toll. and now we just have to see who the new head of the roman catholic church is going to be. >> there is another headline that seems to pour ice water on the economy. later on, inside america's big fat sugar bail-out. stick around to see why it's our outrage of the day.

welcome back, everybody. we have seen the white smoke. it is over now. none the less that means that a pope has been elected. we will see the new pope come on to the balcony to make his first address as the head of the roman catholic church. we're going to keep our eye on it. you will see it in the bottom lower corner of our screen. keep on watching. in the meantime, retail sales sure look like the glass

is half full. it's not all puppy dogs and ice cream. why do you have to pour cold water on everything? >> i don't. i just report the news. sometimes its full and sometimes its half empty. i just want to show you one chart here. in a sense it's not half empty. it's sort of 2/3 full but the 1/3 missing is really critical. look how much better expectations are for sales. look how much better capex is. but then look at jobs. no change. if i were to do this, i would have 16, 8, and 0 would be the number on jobs. it's good that they're looking for sales. i have my doubts as to whether or not they cannot increase jobs if you have increase in capital

spending. but right now we're not seeing the kind of hiring plans that we like to see. >> why the disconnect? when is it going to flow through and what are they waiting for? >> it's the lack of confidence. what they're trying to do with that tells me they want to hold their margins the same. >> probably the big question is retail sales number. we are going to talk about this? just a second. they seem to have had an impact. but in thing a gae ing inge agg to be okay. >> we certainly hope so. tomorrow on the closing bell, i believe you will be sitting down with the new treasury secretary. >> yeah. we're going to talk to him about

some of these issues. we're going to go to manufacturing plant down in -- where am i going? georgia? i thought atlanta, which i know. but somehow atlanta and georgia. we will go outside of atlanta. we will take a tour and talk to the ceo of seimens and try to get a baseline for what expectations are. >> you grill him. >> stick around. how investors cut through the cluter and look at what matters most. he marked up his gdp forecast today based on recentent data. joe, michael, great to have you on the show. joe, you have enough to mark up your gdp forecast? >> that's correct. we doubled it from 1.5 to 3.

i should also add that we have business inventory data. in terms of measuring output it looks a lot better than what we thought. we think a lot of this will carry through over the course of the year. so we marked up our full year gdp number as well. >> then why, michael, are you not so encouraged? you know, one or two months of good data does not make a good trend and you want to see more? >> i do want to see more. ceos want to see more. they want to know what is going to happen from washington. when you look at the ryan budget, it doesn't stand a chance. were it to go through, it would be a good head wind for near term gdp and hiring. we need a solid playing field that will not shift under us.

i'm also a catholic so i'm seeing the white smoke and feeling bullish. does that make me a papal bull? >> it makes you popeful. >> let me try this idea on. we have had a pretty major adjustment on the market and to me that is doing away with a crisis mentality. essentially the end of the panic. that was worth an adjustment upward. i just feel like to go forward we will have to resolve the issue of fiscal consolidation. we will also have to see hiring on the part of ceos. if this is a level that says i don't fear waking up in the morning and seeing armageddon, then this is a sustainable level. |to push forward, my take is that you will have to see real progress in key areas like hiring in the consumer. >> i think that you're

absolutely right. i hope that joe is right, though i wonder if we did see joe's 3% number, what sort of head wind that would create. i'm with you. i need to see organic economic growth. you figure we're shoving a trillion dollars of deficit spending over the past few years. we're having the fed create a couple of trillion dollars to generate 2% gdp growth. until we see these companies really beginning to grow again, based on demand driven growth, i'm being cautious. i'm always fully invested. so i'm certainly enjoying these gains, but i'm a little nervous. i guess managing other people's money makes you nervous. >> indeed, it does. don't want to burn anybody. thank you very much for participating. in the meantime, within the hour we are waiting for the newly elected pope to come out on to the balcony there where there

are many people gathered including 6,000 journalists from around the world. we will be looking forward to seeing who that is within our hour here on "street signs." but also, coming up -- >> sparks are flying here at the home depot product walk. we're going to get to play with more power tools and speak with the man who runs home depot. stick around. we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. i know what you're thinking...

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>> welcome back. what we are seeing here is the balcony in vatican city, more precisely in st. peter's square. the newly elected pope has gone to the robing room to change from red to white robes. the doors will swing open hopefully sometime soon. the senior cardinal will announce in latin, i announce to you news of great joy. we have a new pope.

and hopefully the world will be introduced to that new pope. it could be any time soon. >> and back to street talk. let me show you what is happening with netflix. this stock is up by just over 6%. it has unveiled a new feature which allows subscribers to let facebook friends see what they are watching. you can see what has been going on. it has added more than $80 in value. let's take a look at another stock. it says that the transition to a multicategory lifestyle brand will work and it believes that the management team is topnotch.

they did lower the fiscal 2013 eps to $3.65. let's take a look at another retailer. we talked about strong retail sales not showing up here. they say they are off to a new start. none the less, a revamped emotion. the ceo says that traffic is down noticeably. and that kpespecifically is weighing on the stock. >> dole foods swung to a loss. they say this is due to a challenging banana mrkt. one-time charges weighing on the stock as well. that's what we're watching.

>> you would think that housing rebound would be good for you. >> it will drive demand for your products. how does housing play into the home depot story. they know they are going to get the value out that they put in. we're -- it's important to us that the housing market come back. >> so fair to say there is a direct tie between the housing recovery and home depot sales and revenue. >> we still think that we are

more dependent. the housing market is going recover gradually. it's going to be a slow process. >> how much do you see each improving over the next 12 to 24 calendar months? >> gdp looks like it will stay you can see knit in terms of housing formation. >> so when you talk to the store managers here. you plan it out. are you planning out for a better 20, late half 2013, early 2014 than an early 2012? >> we're planning for roughly the same thing that we saw in 2012. >> we had some great growth. we're planning for about the same around 3%. >> one thing you have done is

driven same store sales higher. i think in the fourth quarter you had the biggest gap overload since the mid to late 1990s. are you going to continue the focus of gaining market share? or will you focus more on operating margin and profit? >> what we always try to focus on is our customer and trying to serve our customer needs and see what happens from that. that's really the key for us. from lumberyards to paint stores and all the rest. we have a lot of competitors to worry about. >> one thing you have done is you have gotten the cost per store down. are you as lean as you're going to be? >> there are always opportunities to improve our operations. it's one of the things, so we bring all of our store managers in here and we talk to them about it. how do we get more productive in the store year-over-year. identify opportunities to

improve customer service and more. >> three things we have talked about the consumer is fact over the past months. higher gas prices. the payroll tax reset, 2% plus. and sequestration. do any of those things hurt your business? >> we certainly have not seen it so far. >> you haven't? >> we have not. partly our customer base is a customer base that is a homeowner. maybe a little less effected by payroll tax change. it will be, you think some head wind to the gdp that may impact us. >> you're not making material changes to your forecast? you're not saying let's dial back our estimates because of payroll taxes? >> no. >> we're still looking at overall gdp. that does impact people's estimate on gdp. to that extent it might dial us back a little from what it might

be. >> how many do you have on average per store? >> around 130 associates working at it. >> if you add stores, you're adding jobs for the united states. >> so it's less for us adding stores than it is getting more sales in the stores that we have. so we keep improving the sales in store and as we have more. >> frank, thank you very much for joining us. we appreciate the interview. they really built a store here. it's bigger than any store i have been in here. it recreates a store. and i asked frank where does all this stuff go. and home depot donates all of this stuff to a number of charities. it goes where it is needed the most all over the country.

frank, you have all these managers looking at you. they look nervous. everything's fine. everything's fine. he's fine. okay. >> any moment now the new pope could appear from this balcony. the national police have arrived with the march band. the italian navy and army are arriving as well. everybody is lining up for the very exciting moment that we do see the new pope come out on that balcony any minute now. >> still ahead. how your tax dollars could be used for a massive government sugar binge. >> coming up at the top of the hour, the dow trying for a nine-day win streak. is this rally running out of steam or just getting started? and a consumer group is calling

for an investigation that herbalife is a pyramid scheme. we will tell you whether the pull back is a buying opportunity or not. and the low down payment loan is back. we'll debate whether that's good or bad news for the housing market. that plus -- we may show you the new pope as well. sue is with me today. we'll see you at the top of the hour for "the closing bell." in the meantime "street signs" is back after this break. fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. a talking car. but i'll tell you what impresses me.

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>> it is getting really exciting out there at vatican city. any minute now, that balcony is about to swing open and we will be introduced to the 266th pope who will preside over all the catholics in the world. this is what is going to happen. the senior cardinal will announce in latin, i announce to you news of great joe. we have a new pope.

first name and last name of the new pope is what he will say. it will be in latin, and it will happen any minute now. >> what are you watching? >> watching jc penney, which is having a good pop. that cfo is saying lots of rumors in the market. he's not resigning. he says ron johnson is not resigning. he says we are not going to run and hide. still up about 1.6%. mandy, back to you. >> we're going to keep on watching that. now the u.s. government is ready to step in with what could be the sweetest bail out ever.

>> hello. the agriculture department has had sugar price support for century but prices have fallen so low that one of the government loan programs is in trouble. the agriculture department is considering buying 400,000 tons of sugar to head off possible default by sugar processors. if that purchase does happen, it would lead the usda program with an $80 million deficit. that's according to the agriculture department. that's way below those government price support levels, increasing the possibility of loan default, purchasing sugar before the loans go bad is one of the options. no final decision expected until next month. now the government support of sugar prices has been widely criticized for years, saying it

creates unfair barriers and drives up prices for consumers. >> the u.s. sugar program is a reverse robin hood program, i would call it. u.s. consumers pay about $2 billion more every year to buy sugar in the form of food products like breakfast cereals and candy to the benefit of a small group of very wealthy sugar growers. >> now those price supports also hit companies like hershey and nestle. it's the flood of unneeded subsidized imports that is creating the oversupply and making the job a lot harder when it comes to price supports. bittersweet news. >> it is certainly very bittersweet. ahead on street signs, a power

panel from the home depot product walk. all sitting down for an exclusive interview with our very own brian sullivan. and we are still waiting for the newly elected pope to come out on that balcony that you can see live on your screen in vatican city. the excitement is definitely building in the crowd as we await the news. stick around. [ male announcer ] this is joe woods' first day of work. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up

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welcome back welcome back here at the home depot product walk here in las vegas, nevada. and we are waiting to hear the name of the new pope. could happen at any time. but in the meantime, let's dig into the consumer and the economy. ceo panel, kind of de facto one. jim steven, ceo weber. you know them because you love their grills. tim wattins, ceo of masco, cabinet maker, and jim hagidonor, ceo of miracle-gro. jim, you're all the way from the mid-range consumer, how is the consumer doing right now? >> we think the consumer is doing really well right now and has been for our category of product. they've been very connected with

weber and our business has been growing. >> how do you explain that? you didn't have a downturn at all? if i keep on hurting, i'm not going to buy a $500 grill. >> but we have a full range. we have everything from a $30 smokey joe all the way up to a $1,000 barbecue. we have a range in that area. i just think people buy quality in a downturn when things a tough. and we have a great history of servicing and taking care of people and our weber consumer is really loyal to the company, as we are to them. >> jim, your stock's the 445% from the market lows of march 2009, okay. because with your cabinet businesses come back, you've reduced your exposure to europe as a percentage of your sales. how important is the housing recovery to masco and where do you think we are in the housing recovery cycle right now? >> housing recovery is important. we would estimate about 30% of our top line, 25, 30% is tied to housing. and housing has implications for the repair/remodel side of our business as well. if someone's going to move into a new home, they're usually

going to sell an existing home, which often repairs some repair/remodel type quiactivity. so we're excited about housing. my sense is housing is going to improve over the next four, five years, probably a couple hundred thousand units a year. >> so the next four, five years you think the housing recovery will continue? >> yes, i do. >> and over home transaction, is it a double transaction for masco? i'm going to fix up my kitchen to sell it, to look better for a potential buyer, and then move into a new home and then fix up the new kitchen. >> a homeowner who is going to sell will fix up a little bit and a new person moving in may not like the razz berspberry pa the kitchen. >> you heard from jim stephen about loyalty. it's not like people are going to let their lawn die during the downturn. but we saw millions of

foreclosures, we saw properties being neglected all over this country. are things better now than they were a year ago and will they be better a year from now than they are today? >> i think since the housing crash, our business is a lot better. that being said, i think we look and think the consumer is not in great shape. we think the consumer is pretty fragile. i share frank's view of the consumer, that is kind of flat sales right now. and so -- >> but you hear things are getting better. gdp, while slow, is growing. housing, while not booming -- >> i'm not saying that business is declining, but what i'm saying is, i think there's a lot of fragility out there. i think that gas prices, the stock market, just the political dialogue, and whatever goes on in d.c., i think has a major affect on the consumer. so i think they just -- if things are good and they're optimistic, they'll spend money. if they feel bad, they won't spend money. >> you know, jim steven, when we look at payroll taxes went up the beginning of the year. gas prices, as jim haggerdorn

has said, we've got sequestration fears. do you notice these things? is it a direct correlation on your business at all? >> yes, we do, but i would argue that all of the uncertainty we've had coming up to this period right now, is pretty much vaporizing. now, is the picture perfect? no, i don't think it's perfect, none of us do. but at least the picture is clear. and i think i as a consumer and most consumers can now start to move forward, albeit maybe not exactly the way we want to move forward, but we can move forward. >> tim, what's the greatest threat to the economy right now? from masco's point of view. >> from masco's point of view, i would say a major problem in europe might be an issue that we might be concerned about. i think your point about the consumer is certainly one that has not played out yet, but possibly could. just in terms of, you know, less disposable income. on the other side of that, though, i think that you've got to take into account home price

appreciation and the wealth effect from the stock market in proving. so i think that things are more positive than negative at this point. >> very quickly. one-word answers, please. jim, tim, jim. one year from today, is the economy better, same, or worse? >> a little bit better. >> same. >> same. >> better, same. thank you, thank you for not wearing a tie. mandy, a little better, better, same. j, t, j. >> thanks very much, brian. in the meantime, we're still waiting for the appearance on the st. peter's square balcony of the new pope. it's now been 49 minutes since we first saw the white smoking showing the pope has been elected. last time, by the way, it was 45 minutes. so 49 minutes and counting, hopefully any time soon, we're going to find out exactly who the new pope is. we'll be back.

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