>> showing strength today. great way to show strength. >> we all worried about japan. but look towards europe. >> all right. have a great long weekend. enjoy the rest of this day. follow me on twitter. power starts now. >> halftime is over. power lunch and the second half of the trading day starts right now. >> good afternoon, everybody. a big change at a big company. a major ceo shake up at proctor & gamble. we're going to talk to a man who has been on the inside of that company. talking the talk and walking the walk when it comes to the taper, is the fed communicating clearly enough or is this already a big mess?

see why the worry level is hitting new highs. finally danger zone. we're going to take a good look at how fragile and damaged america's infrastructure has become. >> good to see you. the douw right now is down. it will mark the first time that that index has fallen three consecutive days since the start of the year. but the big dough component story is the ceo shake up has traded up almost 4%, just a hair under 4%. since the market hit rock bottom

in march of . >> first, of course, the legendary shoes, but also leading the consumer products giant through the economic downturn and fending off competition through name brands and private labels. mcdonald's was criticized as well for not doing enough to cut costs and to improve manufacturing productivity.

the results unimpressive. the share price lagging in terms of both respects. putting the focus on former ceos who come back to run companies. there is mike at j.c. penney. results for his second term remain to be seen. the stock actually fell more than 60%. results have been mixed not necessarily a guaranteed home run when you do this. and some of the analysts that i spoke to say they are not necessarily -- they think it's constructive but they want to see clear results. >> jim is a former chief global marketing officer for p & g. jim, great to see you.

>> what did the board want? >> ty, you know, you can see the sunshining. the reds are in town. things are happy here. the board wanted a confident leader. no one understands a company better than ag. he has been away for four years. i think he has had time to take perspective on the company and he is going to come back better than ever. so i'm really looking forward to seeing it. his first letter to employees and alumni was all about the focus on the consumer, innovation and culture. and that's spot on. there is no one better at it than he is. >> what is the biggest challenge he faces now? >> i think it's two more

consumer relevant information and the second one is speed of decision making. he will come in as any leader would and look at the culture and pipeline of innovation and look at the leadership team. i think that company is full of great brands and people and cash. >> what will this do for company moral. >> he is a great leader. sitting next to a senior guy. he was very happy. ag is very loved. very loved and respected. so everyone is really great to see him back. bob, very popular leader as well. it's a poignant moment but i think it's good for the company. i think bob did the noble thing, taking the distraction away. everyone is very energized. the thing he will do, used the

words a lot, in touch. talking to thought leaders, talking to investors. he is great at that. he will take all of that learning and synthesize it and lead the company to ever higher returns. >> you're an old friend but i'm not going to let you off the hook. i know you have a very nice life these days. would you go back and work with him? >> i have a wonderful life now. i am enjoying what i'm doing. i'm here to help in my way i can. he needs to put together the team for the next ten years. and i think that's what he will do. he does that brilliantly and i will be supportive of him doing that. >> see you again soon. >> i hope so. >> these days anybody who says the word fed think s about tape. and we question whether or not

mr. bernanke will affect what is to come. mr. fed is steve leisman and he is here with clarification. >> i wish. and the minutes these past two days, it seems evident that the fed could use some clarity. let's look at what the different metrics are. the first one is theed if funds rate. the unemployment rate at 6.5% or inflation above 2.5 would trigger a rate hike. but there is a concept that they have improved substantially. here is the problem for the fed. a source of confusion. substantial compared to what the fed might say. the fed has not said. what was interesting about the comment about the possibility of a june taper in the minutes was the line that connected.

views differed about what evidence would be necessary for a june taper. and there is the concept about whether or not some participants want to hit the variable to put markets on notice that qe can go up and down. there is the difficulty. here is the distribution of answers on the fed, cnbc fed survey for bhen the market believes there will be taper. they may decide not to taper quickly but the debate itself would put the feds on hold. the quantitative easing strategy tied to economic goals making it hard for investors to rely on. ultimately, that could show itself up in more market volatility. sue? >> steve, thank you so much.

we're going to welcome back right now bob brown. chief investment officer who overseas more than 800 billion $s in assets. welcome back, bob. >> so good to be back. >> the fact that there needs to be a little bit more clarity from the fed. asson who has to put money in the market, do you feel they are communicating correctly and in a clear fashion or not? >> we think the fed has done a good job. so, tapering in our minds does not equal tightening. and that's the first thing investors have to take into account. the fed has pumped a lot of liquidity into the global pool. you are still not touching the bottom and that's what investors have to remember. i think they are also clear that they are just as likely to go

back to ten feet as to go to eight. >> i think that is a good point. >> we are headed for years of monetary accommodation. and tapering is just one of the tools in the tool kit. the market may overreact at first but over time we think it's going to be a non-event. >> are you still finding value? >> yes, we still like the market. clearly we are enjoying these incdable returns. we still would expect much better than any alternative in cash or certainly ten year bonds at 2%. that is what investors really have to appreciate.

a 4 to 6% return. keeping everything you have and earning more on top of that will be a good result. we still like high quality dividend stocks. there is a lot of talk about that. it is fully played out. we think in the low rate moderate growth environment, that story has much more room to run. >> thank you bob. good to see you. >> ty, up to you. >> increasing the stockpile of nuclear material. there is new concern that iran is aggressively targeting u.s. companies in an article citing u.s. officials in today's wall street journal. the paper reports the developments show that while chinese hackers pose widespread

ent electual property theft concerns the iranian assaults have emerged as far more worrisome because of their apparent hostile intent. >> the iranians have ramped up their cyber campaign against north american energy companies in particular. the hackers are attempting to gain access to control system software. unlike the chinese who would attempt to steal property, to identify companies. i talked to the white house this morning. they gave me this interesting fact saying that last year the department of homeland security

responded to 177 incidents against so-called industrial control systems and that's up from just nine. the u.s. government is researching at bugs and investigating specific events. but as you know, at bugs, that is figuring out who done it, can be very difficult. a lot of cyber security experts talk about the adversary because they don't know where this stuff is coming from. >> thank you. frank is a former white house official who worked extensively in homeland security. today he is speaking before the united nations on this very subject. thanks for joining us frank. appreciate it. how far do you think iran is capable of going when it comes to this type of sabotage? >> clearly the intend is clear as to whether or not their capabilities are there, we question that. if they have been able to

compromise and access control systems of energy firms, this is a big deal. it's a much higher level of sophisticati sophistication. >> what kind of retaliation does the u.s. have? what can they do? >> a major gap today is yet to clearly articulate the current strategy. what is the penty for what they are doing? finally we are having the discussion on computer networking. with the chinese. but irrational actors clearly we can tern to other attacks. we need to have that conversation. >> does the reporting by the wall street journal and others

this morning heighten that conversation? does it push forward that conversation? >> it is absolutely in bright lights now and shame on us if we don't move on that. >> frank, thank you so much. good to speak with you again. >> ty? >> i was speaking not long ago with jim rodgers and he said the one threat that keeps him awake more than any other are cyber attacks on the power grid. >> understandably so. to him was one of the biggest threats to the united states. it's a story that we're going to keep following here. >> next on power lunch, danger zone. a bridge collapses on a major highway in washington state. how bad have our roads and bridges become and is it fixable?

or are they fixable? i really should use the correct english here. infrastructure is the yahoo! question of the day. go vote. let's see how you think.

>> it is pretty clear that bridges shouldn't collapse like that but this one was built in 19 1955145 hurt. michelle cab rah did a documentary last year about the scary state of american infrastructure. >> it puts us on the crisis. >> a country in desperate need of repair.

>> i'm not an engineer. as a no vif, i look at this and this this looks really bad. >> the bridge has been posted with structural ratings on it. so they posted it for smaller trucks, less weight. >> if heavier trucks come across the bridge what could happen? >> it starts wearing the bridge out faster. it's worse in urban areas. >> just how did we get to a place where so many bridges are in such bad shape? herman says the answer is simple. a lack of maintenance and a lack of investment.

the collapse should serve as a serious wake up call to all of us. >> could the catastrophe happen again? >> it not only could, but unfortunately it could. >> poor and getting worse and the catastrophe in minnesota could happen again. it did last night, thank tli with no loss of life. and casey, i hope i got that right. the managing director with the american society of civil engineers. i'm going to call you casey from now on. i assume you agree with the

source in michelle's piece that the united states infrastructure is, if not poor, it is certainly deteriorating. >> we released a report card on 16 categories of infrastructure this year and gave an overall grade of d to the nation's infrastructure and also found if the nation made proper investments including greater use of the private sector we could start closing the gap. >> you did a story earlier this week on a chinese construction company just across the way here. that is an area. i call it the cross hell. driving it is like driving

through hell. it's awful. >> casey talked about a gas tax in washington state. we have national gas tax. here is what we find generally. you and i contribute to that gas tax and it goes to the federal government. when we fly in a plane, there is an extra fee on our ticket that is supposed to go into some big infrastructure pot of money for the nation's imports. if you have this big pile of airport money you would think a lot of it would go to jfk, atlanta and more. >> what do you think of what michelle just said there? is that an accurate view of

this? that the money is not going in the right places and it may not be going where the greatest need is? >> you know, people can have a valid debate about priorities. there can't be any questions that we are under investing. i think we are just now seeing the states gear up. for just an additional $8 billion a year for the next few years up until the year 2028 we could close the gap on deficient bridges. >> of all the categories that you covered last year, what's the weakest. where are we most deficient? >> again, that's up for debate. i would say levees. the inland water way system is a

d minus on our report card. here is another critical transportation system that the u.s. has that compliments very nicely the highway system and the railway system in this country and it is capable of moving massive amounts of raw materials for trade. >> vigorously. >> thank you very much. have a great weekend. be careful on those bridges. >> 13% say highways and bridges should all be privatized. >> that last one is an interesting development. thanks, ty. one of wall street's biggest hedge funds saying women don't

make good macro traders. we will debate that when we come back. plus sticker shock this memorial day weekend. say it ain't sew, jane. >> sue, it is. if you want to make a good investment, buy beef. it's appreciating before our eyes. just don't eat all of your profits. we will talk about the cost of the memorial day bbq when we come back. it's as simple as this.

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>> the wto says that old labels discriminate. tmp y? >> we're going to stay in the meat aisle on this one. >> jane, what's happening. >> they are selling here for $12.98 a pound.

demand is. >> beef prices have probably gone up close to 20% and my suppliers are telling me that we are looking at continuing the price increases throughout summer. >> many darryes killed cows because they could president afford to feed them. >> the american restaurant association says we could see more weakness in the cattle markets because he is hearing that retailers have stocked up through father's day. pork, right now on cnbc.com, learn how to make your own

bacon. i did it for real. i bought pork belly here. >> you know what? nobody but you could do this. have a good long weekend. >> gold prices are getting ready to close. >> looks like it will close around $13.87 an ounce. keep in mind when you look at gold and equities, we have seen a strong move here considering where equities have gone and a lot of it has to do with traders on the floor. very short market and they are now opting for gold in this week rather than equities in large part.

we have seen the dough drop of the last several days. the manufacturing data that we got there. deutsche bank saying that copper is particularly vulnerable. >> bob has been glancing around to see where the markets are going. >> come on 22. yes we're done but not much. the dough has held up fairly well interest rate sensitive names have not held up. they are down about 4%. another interest rate sensitive group.

so far the jury is out. see those dips? recovered quickly. we are down maybe 2, 2.5% from the recent highs and we're stable right now. the jury is still out. >> let's grow up town to seema. >> here is a big story on our radar. i spoke to sources who said that a deal could close as soon as next week.

declined to comment. that's the latest. in other news, speaking of far ma. wac to you. >> i will pick ut up there. thank you very much. it's time for the power run down. >> you will never see as many great women investors and traders. he later apologized and saying much of my adult life has been spent fighting for equal opportunity my remarks offended

and i am sorry. my off the cuff remarks at the university of virginia with were regard to global macro traders who are on call 24/7 and of whom there are only a few thousand in the world today. how did these remarks strike you? >> better at this run down than i am. i think he obviously flies in the face of facts. there was a study done that shows women owned -- i think there is that. he said this was placed on a couple of players and i saw what the women did.

i think that reflects on your hiring more than it does on women in general. so, if you want to see a trade extracted. >> a little too late. you know what? i actually thank i got to tell you, you want to see trader distracted. >> there is a problem with women in finance. there are not enough of them. >> it is furlough friday at the irs. >> i don't think anybody will notice. i remember a decade ago when the federal government shut down. >> we're going to go down to

ha hampt hampton? i ran through the stop sign there. >> okay. >> the started of memorial day weekend. 115,000 government employees off the job. nationwide with the irs. floor agencies where folks are at home today. about 90,000 employees. by the way this is because of the sequester at the irs, not the political scandal. we have got about 18,000 employees not working today. now the pace of the furloughs is really going to pick up dramatically. trying to hit a 650 million dollar bujts target. tiler? back to you. >> apologies for not turning to

you when i was supposed to. that's my fault completely. there are people who literally work extremely hard and in a dedicated way. it is very easy to bash the federal work force. but the truth of the matter is a lot of them do work very hard. on a day like this we don't really notice it. >> i am hoping that i don't notice. i have to say, as furloughs go, it is a tough thing to go through. it's nice to give it to them on a holiday weekend. maybe a couple of executives, kept the workers on duty. to work for. >> this is actually.

really need to work. the mcdonald's ceo with a shareholder. i don't think it's fair, she said, when big companies try to trick kids, trick kids into eating food. it isn't fair that so many kids my age are getting sick. is it fair -- is this fair to say? the mother is a nutritionist. >> i have to tell you something. i love that our activist investors are now 9-year-old girls. >> if you're bringing your kids to mcdanlds, if they're getting sick, that's a problem. the parents do need to stand up

and say no mcdonald's for you. even if the kids really want the fries. >> mcdonald's has taken interesting steps in labelling and things. >> i have o. >> what i love is when his response, i thought i handled it really well. we cook a lot of vegetables at home with my kids. and we have apples at mcdonald's. >> have a great weekend. have a burger. >> all right. sue? >> we are going to explain what is behind that and the growing trend for what it means if interest housing recovery. hey kevin...still eating chalk for heartburn?

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>> all right. let's get a check of the bond market right now which closes early today. the focus has been on the ten year note which remains above the 2% mark and it remained there with the volatility in equities which has some people thinking that perhaps the 2% mark is not resistance and has become support for the ten-year note.

and you're up to date on today's bond report. >> there is something very interesting going on in housing right now. more and more homeowners are becoming landlords. and it's not because they want to. more on what's going on. >> life circumstances like marriage, divorce, and new jobs. that has created a new breed of landlord. call them accidental landlords like maria in south florida. >> i wasn't happy about it but i was so upside down, did not want to do a short sale or a

foreclosure so i decided i needed to rent them. >> one of the tennants certainly surprised me. they decided to change a water filter for a holiday weekend and i got the call that 500 gallons of water had gone into my home. and 50,000 dollars later in repairs i had to fix it and then rerent it again.

>> for more on this, go online. realty check.cnbc.com. >> thanks very much. abercrombie & fitch is front and center because its shares are getting slammed today. revenue dropping 9%. that was way below the estimates. and first quarter same store sales plunged 15%. very rarely if ever see that. foot locker getting kicked around as well today. and senator from new york saying he has real concerns about plans by japan's soft bank to buy 70% of sprint nextell. it's up about a third of a percent. delta airlines making a big bet on new york. phil lebeau is at.

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>> the sky club is what caught our attention this morning. this is where the free defense fliers will spend a lot of time. it's designed to lure more business in international fliers. new york is the number one market when it comes to international flying. jfk is number one. delta leads among all the u.s. carriers followed by delta notice that delta has been outperforming the airline index. they have told us that delta can continue to leverage its network here in the united states and its expansion over to europe. here is what richard & anderson

had to say about the new terminal. >> a dramatic difference for delta. first we get to be with our partners in this facility. it will be the preeminent facility. it is the largest international airport in the united states. >> for those of us who travel internationally, who ray for that. >> we have a sneak peek coming up for you next. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives.

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>> cnbc's annual top stakes for business convention is starting now. all 50 states wait to find out what the results are. >> seventh year in a row we have been doing this. the states with the lowest cost of doing business will have a definite edge. especially so in this our

seventh year. >> this year states are overwhelmingly touting their low costs. everyone says they are the least expensive place to do business. this year we're making our cost of doing business category, we're talking taxes and things like rent, wages, and utility. state finances and the housing market. infrastructure is next. maybe because there are fewer available workers, states are putting less emphasis on work force. it's just worth 300 points this year. we look at technology and

innovation, business friendliness, cost of living and access to capital. every state might claim to be the nicest place to live but we measure it using objective measurable data. . we want to know what you think on twitter. use the hash tag. then in a few weeks after we have really dragged this out, we will be live from the mystery location. >> you will be running the data and hitting the road. >> then you will have to guess what i'm at. >> absolutely. >> so will i. >> final check on the markets when we return. [ engine revving ] ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪

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of debt being auctioned. >> have a great weekend. >> what a week it has been. great data pretty much all around. why are we headed to our second worst week for toks? how does a nearly broke nation pay to fix it? we have a plan. one man says made him a millionaire. we have got a new way to serve