that so that is a new high for the s&p 500. we'll see whether or not it holds that going into the close. one of the contributors to that is macy's, the biggest winner in the s&p 500. up just about 10%, ty. >> all right. sue, thank you very much. that will do it for this edition of "power lunch." >> "street signs" begins now. ♪ >> it may feel like going in through the outdoor for likely incoming fed head janet yellen. we'll ask bill gross if he thinks the fed can pull off a perfect exit from qe or if the fed may end up looking like a fool in the rain. other hot topics the stock that has quietly been doing great, the ten cities where homes are the most over and undervalued right now. the one market that may have officially gone from red hot to

ridiculous overnight. >> okay. take a look at the markets. what does the independent of america and the s&p 500 have in common? the s&p hitting an all-time high of 1776.35, about ten minutes ago. as for the ten-year yield, post option, let's take a look just shy of two-month highs sitting at 2.728%. let's get down to bob pisani at the nyse. this morning we were complaining about low volume, narrow trading ranges and traders sitting on their hands. anything in particular that sparked that move up? anything that might break us out one way or the other here? >> a little bit of speculation on that. put up the s&p and you're right we're at a historic high here. europe closed, it wasn't a great particularly great close for europe, but after europe closed we started moving up. remember something, janet yellen is testifying tomorrow. a lot of speculation. it's all speculation because we do not have her testimony that she may be very dovish tomorrow

and that would be very positive for the markets. there's speculation about what, if anything she may say tomorrow. that's part of what's moving that. essentially this is extremely light volume. the markets have moved sideways for a good part of the week, put up exactly what you were saying there, mandy. light volume, very, very narrow trading ranges typically, and essentially a sense they're sitting on their hands waiting for the direction of the market to reveal itself. and what's happened all year, mandy, is you move sideways for a few days, the market has generally just moved up. it hasn't moved down that much. we're seeing exactly that trend today. back to you. >> okay. bob pisani, thanks so much. speaking of the markets we are very happy to have pimco's bill gross back with us. bill, not sure if you can hear the top of the show, but we opened with a track from led zeppelin's classic 1979 album "in through the out door" because we thought it was fitting given janet yellen's confirmation hearings tomorrow some might describe it's a

description of her job should she be confirmed. do you think the fed can perform a perfect exit from quantitative easing and what would it look like to you. >> the only led zeppelin song i know is "stairway to heaven" and i don't think that describes of what might be ahead in terms of fed policy to answer your question. what the fed wants to do as they begin to taper, perhaps in december, more reasonably at some point in 2014, is to have the private market take the place of the fed in terms of buying what they by. it is a trillion dollars worth of u.s. treasuries and mortgages. why would the private market buy what the fed is beinging now? only under two conditions. one, you know, if yields were sufficiently high perhaps they've done that over the past, you know, several quarters, but as well, if the funding of those positions was guaranteed in terms of its cost and so that's where janet yellen comes in,

where the perfect, you know, path comes in if, in fact, it can be accomplished. if janet yellen can convince investors the cost of leveraged banks and hedge funds will remain at 25 basis points for the next three, four, five years perhaps she can pull it off. we have our doubts. >> okay. describe your doubts then, bill? >> well, the doubts are they -- the policies have increasingly become rather negative in terms of their implications. you know, it's fair to say that quantitative easing and, you know, five years of 25 basis point policy rates have not really generated much in the way of economic growth. 2%. the new normal as we described it five years ago, and so, you know, if that's the best they can do, you know, what will be done going forward if tapering and quantitative easing pulls back. other negative aspects in terms of quantitative easing and check writing and we see that in a

daily in terms of investment returns in the real economy as opposed to the financial economy. >> couldn't we even say, bill, that tapering or maybe no tapering has become less relevant to the market now that we have and the market has started adjusting to the new reality? in other words, when it all happens, whether it be in december or 2014, it will not be as much of a shock as some have been fearing? >> that's the case. when the tapering hint came out, you know, in late april, as i remember, you know, ten-year treasuries were at 165 and now they're closer to 265, mandy, so there's been some adjustment. there's been 100 basis point adjustment. now if they taper, the conditions that i suggested in terms of the private market taken over for the fed in terms of buying that trillion dollars, you know, is a little more doable. it doesn't necessarily mean that it will be done, but it means that at 265, and a financing rate that's guaranteed quote/unquote in terms of its cost for the next two, three, or

four years, then, you know, perhaps we have a chance. >> so because the market has already been tightening on its own, do you think this does push it out like say to march or further out into 2014? >> well, you know, i think that's the case and i think that's what janet yellen needs to convince investors of. perhaps she won't be doing that tomorrow. she's got to play one side and play the other side. she's got to stress the dual mandate of unemployment and inflation and perhaps does not want to speak to tapering and the conditions of what she calls optimal control, but basically that's what is required. you know, what is required in terms of maintaining this level for stocks and this level for bond prices is simply, you know, a policy rate for 25 basis points into 2016, maybe even 2017. is that a good thing? not necessarily because it distorts capital markets over

the long term. but that's what's required if, in fact, she wants to stabilize financial markets and stabilize the economy. >> we know your affinity for card games and black jack and you tweeted out something about these being casino markets. what do you mean? >> well, you know, capitalism has been sort of a casino. the good thing about it it's been that investors have been the house, as opposed to the -- to the gambler what has happened over the past, you know, several decades, several centuries i suppose, has been that, you know, investors come out ahead going forward. you know, at this point in time, with the amount of leverage that's in the system that's in the casino, so to speak, it's not so certain that investors or even, you know, the house so to speak on the other side, you know, will come out ahead. we have, brian, about $100 trillion worth of credit which includes credit and shadow banking credit as well as

equities and that's supported by a thin foundation of capital so to speak that the fed holds. going forward, it's not so certain that the winner will either be the house or the player because of the leverage that's inherent in the system. >> what about the global markets? because i noticed that as u.s. rates have been moving up over the past few weeks, emerging markets have. taking a hit, european markets with the exception of germany have given back their post ecb rally where do you think is the most insulated right now for what's going on? >> well, i think the u.s. is strangely enough, having talked it down in the last few minutes, but the emerging markets countries, let's take brazil as an example, you know, to have problems in terms of outflows in terms of money being withdrawn from their system, likewise emerging markets countries developing countries in terms of growth rates have believe it or not sunk below, you know, what has been evidenced in many of

the developed countries. so, you know, it pays to play it safe when you have a situation such as this when you have a leveraged system which is in balance on a global basis in terms of flows back and forth and so the united states is -- is a good bet in terms of safety and stability. it's not necessarily good bet if you're expecting 5, 10, 15% returns going forward. >> all right. well said. bill gross, i guess brazil's pain may be our slight gain, at least a few percent. thank you very much, buddy. appreciate it. >> thank you. on deck, the most overvalued and maybe undervalued housing markets of america and a stock that has been red hot this month that seems nobody, but us, is talking about. >> later on turkey day travel is coming up fast, so where can you fill up on the nation's cheapest gas? and one more delicious reason to be thankful. "street signs" is back in two. [ male announcer ] once, there was a man

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pulte homes ceo was on cnbc earlier on today talking everything from the new home sales to the rental market and some other things thrown in as well. diana olick is currently at the nyse. run us through the highlights. what really stuck out for you? >> well, mandy, for the builders right now, it's all about affordability which has been hit by both higher mortgage rates and higher home prices. the lower end is particularly tough and the ceo of pulte says

a lot of entry-level demand is shifting to the robust rental market. >> there is definitely a longer term play with the rental category that has emerged. having said that there's a lot of buyers that tell us that they mention they want to own so i think it's a little bit of a delay purchase. >> delayed to the point that he says his customers are waiting, skipping over his entry level syntex brand and going to the higher-end pulte homes. what's interesting about this he says is they are not ready to lower prices to lure those lower-end buyers back. incentives are not out of the question. despite pulte's focus and large market share in move up homes. >> for us i would say maybe we're a little more insulated from some of those concessions than other builders may be. nevertheless, we'll have to see where the market goes from here as to whether or not buyers need that inducement to get into the

market. >> pulte may be more insulated but other home builders are not just looking at incentives but to ease up ons those now very high home prices for new construction. mandy? >> thank you, diana. let us bring the home building analyst at deutsch bank. i want to focus on the markets you cover. you heard diana's interview with the ceo of pulte homes. does it change your view or rating on pulte or any of the other home builders? >> well, the issue for the home builders right now, is that the real dropoff in demand, and we're talking a change in year over year order, to flat year over year in the third quarter. there has got to be some response to that to get demand going again. we think that's going to happen during the spring selling season and going to in our opinion be driven significantly by increased incentives. that is an issue i think that is going to affect both the entry

level side of the market which as richard and diana were talking about has lagged but the moveup parts of the market as well. >> do you have a recommendation on pulte in particular? >> well, the pulte has been a little bit less aggressive about investing so our recommendation on that is a hold. we have been more positive on the names more aggressive into the housing market. >> like? >> names like meritage and ryland have been amongst the most aggressive and dr horton in terms of investing in new community growth. that's what's going to drive their volumes slew the housing recovery. >> you like the west coast? >> no. those three builders -- >> southwest, sort of -- >> i would say most of the builders if you look at the smile markets as they're sometimes called from the west coast into texas and up into the d.c. area, that's where most of -- >> what's a smile market? i've heard of -- what's a smile

market? it's not concentrated with dentist and zip code. >> draw a smile across the u.s. map you would get the west coast through the central markets like texas into florida and then up into the east coast. >> these stocks are also all of them are very interest rate sensitive, right? as rates i can assume at some point will continue to move higher or up quite a bit, so which ones would you avoid in that situation? which ones would not withstand that? >> well, interest rate volatility that we have a seen through the summer and early fall has affected all parts of the market. it's not really affecting some builders more than the other ones. the order disappointments that the builders reported for the third quarter were uniform across the sector. >> all right. nishooh appreciate it. >> thank you for having me. >> simmering not bubbling how your next guest describes the national housing market. continue our discussion with jed of trulia. before i get to your list of under valued and overvalued what

do you mean by that, simmering not bubbling? are you starting to get a little nervous? >> brian, we're seeing prices are still rising fast, by any normal standard, prices are up much faster than we're used to historically. prices are up almost 12% year over year. because prices fell so much after the bubble burst, places still look in line with our long-term fundamentals, when we compare prices today to incomes and rents. prices if anything look a little und valued about 4% nationally but huge differences across the country in individual metros about whether markets are over or under valued today. >> what's so different now compared to last decade's bubble? >> the biggest difference right now compared to last decade's bubble is that prices look much lower compared to incomes and rents now than they did then. so last decade, if we look at the end of 2004, which was when prices were also like they are today, rising at about 12% a

year, at that point, almost every market in the country looked overvalued and prices nationally looked overvalued by about 25%. that's very different from now where prices, if anything, looked a little undervalued. remember, last decade, there was a lot of construction going on whereas now construction is running at about 40% below normal and it's very hard today to get a mortgage, whereas during last bubble, it was if anything too yees to get a mortgage. >> come in, diana. >> >> i just got to jump in. how can you talk about some markets being overvalued, some undervalued whether we have bubbles anywhere when we have a bifurcated buyer's market that is a huge number of investors using all cash and then your regular home byers who need to get the mortgage, need the large down payment where affordability is a huge impact for them? i don't understand how you can draw these delineations of bubbles and under and over valued when you have the market fueled by two completely different paths is?

>> what we see when people are looking to buy, invest or sell they face the prices in the market right now. some parts of the country like southern california, prices look more than 10% overvalued which means they're at greater risk longer term for seeing price declines. other parts of the country like ohio and florida still look under valued today. that means longer term, we're likely to see prices rise there as the market gets back to normal. but, of course, it's different for different types of buyers. it depends on whether they can qualify for a mortgage and as we've always said, even at the point when housing looked most affordable, about 18 to 20 months ago, lots of people couldn't get a mortgage, couldn't -- hadn't saved enough for a down payment and couldn't take advantage of that peak in affordability. >> very quickly then, here because you mentioned ohio, jed, what's wrong with ohio? four of your five most undervalued markets are in the buckeye state? >> ohio is an area that saw price declines after the bubble

burst, but has not yet seen a big home price recovery. like other parts of the country, still some foreclosures left to come. that's holding back price increases. in some states including florida, and other parts of the northeast and midwest, and again, that's where i expect we might see prices get closer back to fundamental value, in the next few years. >> jed, always good to see you on our show. thanks very much for joining us. >> thanks, mandy. >> still ahead, it's been all good news if you've been filling up your tank, but could gas march toward 3 bucks a gallon coming to an end? >> later on, christmas came early for macy's. are they the hands down retailer to watch this holiday season? we'll discuss that and get a stock pick from one of your contributors who says this name should do well and it's a name that might surprise you. you should be called folk art specialties. do you know who it is? let us know. ♪ ♪

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higher now. what does it mean for what you are paying at the pump joining us is chris and andy, gentlemen, great to have you with us. chris, is the trend still down for gasoline or is the good news over? >> look, i think that the trend will continue in the near term as we switch to winter blend. we've got good stockpiles of gasoline on hand. going into the turn of the year, we'll see, you know, gasoline prices remain range bound, may come down just a hair more. i don't think we're going to see them plummet but i think, you know, folks can get used to nearly for $3 gasoline prices and i think that's a welcome as we enter the new year. >> how much welcome is this going to be? do we overstate the impact of oil and gas prices on america? it's nice but is it going to change anything, 20, 30 bucks? >> well, i mean as oil prices, you know, move down, it's interesting because $20 in the price for barrel of oil as it moves up or down can translate

to 50 cents a gallon difference in gasoline prices. i think it changes but keep in mind, you know, when president obama was elected gas was $1.89. $3, $3.50 has become accepted. recall back before when gas hit $4 the world came to a standstill almost. i think folks accept it, but is it a massive difference? no. it helps. >> what's going on with the crude market, it's getting colder and colder and used to think of winter perhaps as one of the peaks in the year of oil demand through heating oil, but as heating oil has been replaced by natural gas so what degree is summer the peak? >> well, summer has become the peak and we see that had in world oil demand and really it's being driven by air conditioning demand which translates to electricity demand which overseas is fueled by oil. >> will crude keep going down through the winter? >> i don't think so. i think one of the biggest support factors is the fact that libyan oil production continues

to be off the market and we don't see a resolution in sight and in addition, the market is really looking at the negotiations with iran and saying, even if they are successful and an agreement has come to pass, we're not going to see iranian oil on the market any time soon. >> at what point do prices keep going down where opec, meaning, saudi arabia, says all right, boys, dial back the production tap, prices are getting too low for our standards? >> it's a great point and keep in mind that saudi arabia, for example, who's kind of really in the front chair on this thing, they need expensive oil to run their budgets and their economy. 92% of their budget hinges on oil and after the arab spring they bailed a lot of countries out, spent a lot of money and here's an interesting thing, by 2018 if you look at the numbers almost 20% of the oil that they produce will be used domestically not exported meaning they could be in a financial crunch. they're going to keep pricing

the price of oil up. we have $10 in the price of oil due to iran so if that gets resolved and the crude starts flowing mid to late 2014, we've got an oversupplied market and the prices could come down. it's interesting to see what saudi arabia does at that point. >> even if there is a resolution we hear that, you know, oil isn't going to flow any time soon. thank you for joining us. andy and chris. >> thank you. speaking of gas, we found the cheapest in the nation. sharon epperson is on pump patrol. . >> the slide in gasoline prices has stalled for the national average but prices are falling in many parts of the country. and you'll find the cheapest gas prices today in columbia, missouri. at $2.78 a gallon according to aaa. missoury is one of nine states where the average price of gasoline in that state has fallen below the $3 a gallon mark and there are many other states getting very close to doing the same. but meanwhile, the national average actually rose over the

last 24 hours. it's at $3.19 a gallon. that's up almost a penny. the biggest one-day jump we've seen since the middle of october. and it's been about two weeks since we've seen a rise in gasoline prices but it happened today. that's today's pump patrol. back to you. >> all right. sharon, thank you very much. on deck, starbucks on the hook for a $2.7 billion bill. we're going to talk the numbers behind this venti size settlement. >> as your "street signs" lulu lemon in full transparency and a steel heavyweight thrown in for fun as well. "street signs" back in two.

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welcome back to "street signs." i'm bertha coombs. developments on the affordable care act out of the white house today. jay carney the white house spokesperson in his update this afternoon saying to expect at some point soon some sort of announcement with regard to the issue of people losing their health care plans. when asked about enrollment numbers which the hhs secretary kathleen sebelius promised would be released this week, he said he believed that hhs would have an announcement later on today. there is a 3:30 conference call the daily conference call this afternoon will take place at 3:30 and brian, of course, we will be monitoring that call, if any numbers do come forward we'll bring them to you right away. no let's get street talk time. as stock number one is lululemon and no jokes about the new rating either. >> i figured a little led zeppelin would be great for this

segment. talks about sweet talk which is like street talk. lulu lemon with an overweight rating at jpmorgan chase which has gotten sideways glances. after plenty of bad pr analysts believe they will see top and bottom line -- in fact talking about the big bottom line, growth accelerating, $84 target, so they see about a 20% upside to lululemon share price. >> the founder did come out and apologize for those comments he made about how those pants don't fit every -- >> not the brightest comments. >> nonetheless he did apologize. stock number two, coal is hard money u.s. steel getting an upgrade. >> the x up 1.5%. an upgrade to an overweight to equal weight at morgan stanley. they think the u.s. steel has room to improve their margins. kind of quietly u.s. steel up over 24% in the past month. by the way, in the same call morgan stanley downgraded nue to an equal weight.

>> this is a big one, qualcomm, a lift from goldman sachs. >> i heard jim and carl talking about it. jim had funny comments about the super duper conviction buy list. qualcomm was added to goldman sachs's conviction buy list. they said expanding margins should allow qualcomm to accelerate earnings growth. a market laggard, it's up but less mandy than the nasdaq or the dow on the year. kind of a disappointment to some. >> an under the radar pick, one of the nyse's newest ipos and so many ipos to choose from but we chose this one. extended stay america. hotel chain. >> hey, listen, people are staying in the stock right now, up 16.5% on its first day. began trading on the nyse. opened at $22.75. stock right now at $23.28. if you got in congratulations. hotel stocks overall have been decent this year. wind ham worldwide and marriott each up about 30% over the past month. little better than the overall market. >> yeah. >> all right. starbucks shares also higher

today. this despite the fact that the company agreed to pay a $2.8 billion with a "b" billion dollar settlement to kraft to settle a long dispute over its packaged coffee business. with the stock up more than 50% on the year, is the coffee giant a buy or should you take profits? let's start talking numbers. steven of prime execution on the charts, john stevenson of first asset investment management on the fundamentals. john, to you, i have a bet with herb greenberg about coffee prices, prices i have been by the way spectacular wrong on since i made the bet in july. coffee keeps going like this. i haven't noticed starbucks cutting its prices. is this pure profit for sbux? >> yeah. huge profits. coffee prices are down 27% year to date. >> don't remind me. >> yeah. only going to slide and look when i fill up every couple times a day, i don't notice a discount either. dropping to the bottom line, roughly $350 million to the bottom line each and every year

and that's huge for the company. what's turning the needle for starbucks is same-store sales growth. it's growing at 6% where, you know, in retail world nothing is growing right now and this is just flying off the shelves literally. and that's just the beginning. revenue growth should be 10% in the next couple years, earnings growth 20%, all of that will make this stock march considerably higher. i love the stock. it's addictive. as all could be. it should be something you add to your portfolio as well. >> okay. >> the bean counters are out there with the $2.23 billion damages they have to pay and clearly not affecting the stock negatively today. in fact the stock is up by 1%. in terms of what the charts say steven, you come in on the technicals, do the charts back up john's case about starbucks? >> yeah. this is definitely a stock where the fundamentals and the technicals are telling us the same thing. even though the stock is trading at the highs looks like a buy up here. there's two things on the charts that stand out. the first and the most prominent

is this really year hp long really nice steady upward trend channel that stock has been in. this describes a stock that's building value and investors are rewarding the stock and the company for that by continually accumulating the shares. the second thing we really like is that there's a nice little area of support pretty close to current levels. it was defined when there was a brief phase of sideways price action a few weeks back. it's about 7760. we don't think it should be tested but in the case it does, it is good to know it's there and that's where we think it could be defended. >> talking numbers here. both guys, steven on the fundamentals on the chart with john saying good things may be brewing for starbucks. i'm a drip. i apologize for that. check out the on-line edition. terrible. let's get a market flash. save us, dominic chu. what are you looking at? >> ww granger, guys. this company which supplies office supplies, services, corporate services, is drifting out towards session lows. the company is holding its annual meeting and offered

guidance for current quarter profits that fell short of some analyst estimates. also offering full year 2013 and full year 2014 earnings per share estimates that also fell below analyst estimates. you can see there the stock down sharply intraday on that bit of news. back over to you. >> that's ugly, going down like a led zeppelin. >> enough of led zeppelin. >> on deck, the dow stock that has been rocking it this month and it seems that nobody else is talking about. >> and later on a double dose of superlatives. the most expensive painting ever sold and the most ridiculous thanksgiving food we have ever seen. that's all coming up ahead. in the meantime bill griffeth, any coffee puns you're got? i'm going to give brian a roasting over those puns later. >> a roasting. >> plenty left. we'll get to them. first, forget about stocks. they're at all-time highs. bitcoins had hitting a record thanks to surging demand from china. is this currency for real or is

this a classic bubble about to burst if we'll look at both sides. cisco ceo john chambers breaks down his company's earnings moments after they are released tonight on "closing bell." former heavyweight champ mike tyson will be here on the floor of the new york stock exchange to explain how he is fighting his way back to fame and fortune, a decade after declaring bankruptcy. the champ himself here at the big board. maria and i look forward to seeing you at the top of the hour for "closing bell." more "street signs" coming your way after this. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts.

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netflix stock is up over 300% folks over the past year, but today, unveiling a big make-over. let's get to julia boorstin. better be a makeover that justifies that kind of price action. >> well, mandy, netflix wants to get its users to spend more time streaming its videos to make sure they keep paying that skub subscriptions. it's new netflixs larger images are more detail more summaries of shows and personalized recommendations based on viewing history and what your friends like making netflix more social.

the company says it's the biggest change to its tv interface in its history. the first to roll out simultaneously on multiple devices. now this will allow netflix to quickly update the software which is key because netflix says most of the billion hours subscribers spend streaming video is on television sets. within two weeks the new interface will be available on newer smart tvs and blu-ray players and the row cu box and xbox 360 and play station 3 and the new playstation 4 which launches friday. the new look will not affect how netflix works on computers, tablets or smartphones and will not work on microsoft's xbox 1 or the apple tv because the way those companies control their devices. more so than the upcoming playstation 4 the xbox 1 is designed to be an entertainment hub so down the line we can expect microsoft to open up its doors and allow netflix to use this new interface on its platform.

mandy? >> thank you. i'm going to throw it over to brian. >> we got to hit this news. "the wall street journal" out with facebook offering $3 billion for snapchat which was turned down. snapchat a free app with no revenue, facebook willing to pay 3 billion times sales for snapchat. is this the sign the zombie apocalypse is among us? >> here's the thing. facebook does say they don't comment on rumors and speculation but it does kind of make sense because of the fact that facebook in its most recent earnings announcement admitted it was having weakness with youngest users and those are spending a lot of time on snapchat. pew came out with a survey of 18 to 29-year-olds that found that 26% of them use snapchat. facebook wants to hold on to those people. it could make sense. >> julia, you know better than i do. we'll see. thank you very much. $3 billion times sales or earnings. everybody is talking about the

twitter, you know, old-school tech stock has been doing well this month. we're talking cisco. it is the dow's second best performer so far this month, trailing microsoft by just a whisker. let's bring in numura and grady, who gives cisco three out of five stars. stewart jeffrey your bull case for the company. >> cisco tends to be pretty early cycle stock. we're looking for improvements neck year for cisco to be one of the first companies to experience that. a bit of trading opportunity into next calendar year. we've got this overhang on the multiples trading about 11 times earnings, the broader markets at over 14 times and we think much is due to this technological shift toward software defined networking and, of course, cisco has bnt king of hardware based networking. number of new products in the past week and few months and we think they've -- sort of hijacking the conversation quite well away from low-cost boxes

towards really adding productive and saving significant it employee costs. over the next 12 months you'll see that come through and people will get, you know, bit more relaxed about the margin and outlook for cisco longer term and that will allow the multiple to get closer. >> according to forbes 79% of analysts rate cisco a buy. i think you're in good company, stuart. grady, with three out of five stars that's a hold for cisco. what are you seeing that's different from what stuart sees? >> well, actually i agree with a lot of the other guest points. cisco has done a very good job of repositioning its portfolio and the stock is an attractive valuation in a tech market that looks overvalued to us. so i -- where i tend to disagree i'm not really confident or certain on the cycle. i do think that cisco is an interesting long-term investment for investors who want different depds growth. if you look at it, they currently pay 68 cents per share in dividends equating about a

2.9% yield. only a 30% payout ratio, 30% of free cash flow it ted ca-- dedicated to that divd dend. for long-term investors you're getting a decent relative value in a market that looks a bit overvalued to us. >> i see you've got a fair value estimate of 26 bucks which is just above where it is right now. stuart and grady, thank you for joining us. cisco is reporting its earnings after the bell today, so be sure to catch the ceo john chambers live comment on "closing bell" after they report. they do kind of move the needle because of, obviously, cisco's reach into the business spending world. somewhat of a bellwether barometer of what's going on out there. >> i have to correct myself, a smart viewer points out i said something wrong. >> everyone, get out their pencils, dvr this. this is a moment. you got to correct yourself. >> i can't say i'm sorry -- >> press record. >> i said if facebook paid $3 billion it would be three billion times sales that would

imply that snapchat has a dollar in sales they have zero. smart viewer pointing that out. i am wrong. zach, great call. what's 0 times $3 billion, zero. >> facebook, sounds like you're overpaying to me. >> that's math. >> still ahead, the countdown is on to christmas. with only 40 shopping days left. got to start soon. which retailers will be on the naughty and nice list. we'll do bait that. >> a double dose of rich record breakers and why one market went from hot to stupid overnight. over the next 40 years the united states population is going to grow by over 90 million people, and almost all that growth is going to be in cities. what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved into safe, clean affordable housing, places that have access to great school systems,

access to jobs and multiple transportation modes then the neighborhood begins to thrive and then really really take off. the oxygen of community redevelopment is financing. and all this rebuilding that happened could not have happened without organizations like citi. citi has formed a partnership with our company so that we can take all the lessons from the revitalization of urban america to other cities. so we are now working in chicago and in washington, dc and newark. it's amazing how important safe, affordable housing is to the future of our society.

♪ food glorious food >> when you think thanksgiving couldn't get any better, feast your eye on this. new york's zucker bakery concocted a pumpkin filled doughnut with turkey and cranberry sauce. you have option of sweet potatoes and marshmallows. they made it in honor of thanksgiving and hanukkah. you shouldn't combine meals. doughnut is a breakfast snack. cranberry, stuffing and turkey is for dinner.

>> i agree. >> you shouldn't be combining this stuff. >> i don't want a steak omelet. breakfast taco or burrito is the only thing that works. you don't want -- >> i would eat crickets, for one, but i'm not going to eat that. >> who's cricket? >> he doesn't want to be eaten. jiminy cricket. macy's posted way better than expected third quarter sales. let's bring in courtney reagan to run us through the headline. keep in mind, there were very low expectations. >> that is true. remember last quarter macy's reported a disappointing quarter for the first time in many, many quarters. but it seems like it was just a blip in the radar because macy's actually pointing out very strong sales, strong profit. gross margin's a little weak. that was a little concerning. but it was the commentary about the fourth quarter that is getting wall street excited. they didn't even see encouraging. he said, we're entering the

fourth quarter with confidence. that's a strong word. you saw the stock hit all-time highs. the big question is, is this a one-off event or is this what all of retail is going to be seeing right now going into this all-important holiday season? >> well, let's bring in jan kniffin, jay robert as well, and always the expert on the retail space. as courtney was alluding to, macy's beat. is this good news for the rest of the retail sector or just isolated to macy's? >> well, i think it is good news for the rest of the retail sector because it means we won't see as much discounting as we thought we might see. i've been out in stores for the last three days. in new jersey as well as here in pennsylvania. and i've seen very little discounting relative to what i thought i might see. it's been a very strong last three weeks. and it's helped people get where they want to be on their env inventory. macy's is knocking the cover off

the ball. courtney says, gee, maybe that's not so great. they've beaten the last 12 out of 13 quarters. i'm ready to put terry lundgren up for retail hall of fame. i don't agree that we wait to see what happens in the fourth quarter. they're knocking the cover off the ball. they're the go-to place for holiday. i think they're just winning the game. i don't think this was an isolated case at all. i think they're doing better than other people, yes. but i think we've seen a strong finish here to the third quarter. >> i have a question about the gross margin, a little disappointing. you're talking about you're not seeing as many promotions as you thought you would. isn't that what you think, macy's? >> though turned in 47 cents, they thought they would be at 39. did they give up gross margin to get 3.5% sales comps? yes. i'm not that concerned when it works. i'm concerned when they give up gross margins and don't get the

sales. i think they did what they needed to do. they got the inventories where they needed to be, drove the sales line. they gave up a little comp but they were great on the expense structure. wow, i mean, can you do it better than that? i mean, basically, terry has taken this old nag and put wings on its feet. i spent years in department retailing. this is not easy. >> don't sell it short what they did. they became walmart of department stores. if you were supplier to them, you had all the power. now macy's has all the power. they've become so big that they push around the suppliers like the companies that put stuff there like those that used to do to macy's? right? the power has completely shifted. >> i know you think i'm ancient but when i was in business, there were 100 department stores. i remember when there were 50 department stores. now just a handful, one big one, macy's. yes, they've got the power. >> let's go to gimbel's.

chico's, why do you like it so much? >> chico's looks great. white and black market, sonoma, they'll get the missy business they need to get. they're the only mall-based retailer at the moment i look, except for foot locker, which i always like. >> coming up, one pricey painting and what could be a record rock. (vo) you are a business pro.

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so, the art market officially, robert frank, went from hot to stupid. >> to crazy, yes. a billionaire out there who really loves bacon. i'm talking about francis bacon. the bacon tryptych became the most expensive painting ever sold at auction, price $142 million. that $142 million for a single painting is more than the entire christie's spring auction back in 2005. the record for the most expensive work sold by a living artist, that was sold, jeff koon's balloon dog sold by peter brant. what is driving these prices? basically, all that easy money from the fed as well as asian buyers. asian buyers lighting up the phone lines at christie's last night. dealers telling me chinese buyers are looking to move as much money out of the country as quickly as possible and put them

into portable assets. that's why diamonds are hot. in the next hour or so we should get word on the most expensive diamond ever sold at auction, pink star, 59.6 carats, flawless fancy pink. expected to sell for more than $60 million. >> thank you so much, robert frank. thanks for watching "street signs," everybody. >> "closing bell" starts right now. hi, everybody, entering the final stretch. welcome to the "closing bell." i'm maria bartiromo. >> ciao for me. we're going to speak italian. >> we're integrating italian. >> we'll explain. >> the nasdaq strong, dow up lackluster. the s&p is back in record territory. good earnings. very good earnings from macy's today. a decent ten-year note auction. we wait for more from cisco. janet yellen