hi, everyone. welcome to "on the money." i'm becky quick. yellen speaks, the economy feels the deep freeze, but the markets are still hot. why the bull run may not be done yet. is it time to buy, sell or hold when it comes to housing? the state of real estate and what it means to your bottom line. and the business of basketball. the man who built the nba into a billion dollar ball game, love him or hate him, we'll talk to david stern about whether the league's continues success is a slam-dunk. "on the money" starts right now. >> this is america's number one financial news program "on the money." now becky quick. >> here's a look what's making news as we head into a new week on the money. america's economy gets its latest report card.

the grade is far from an "a." the second reading of the gross domestic product was released. it showed growth of just 2.4%. that was down from an initial read of 3.2%. that's about what economists expected. numbers were slightly weaker for both exports and housing. the gdp is the broadest measure of the size and strength of america's economy. the market continued to chug along. by thursday, the s&p 500 hit a new high closing above 18.50. the dow and nasdaq up, as well, but well below their all-time highs. stocksings were mixed on friday. in her second appearance this month, new federal reserve chair janet yellen said is the economy had softened in recent weeks and that it was hard to tell if that was because of the bad weather. she said it's likely the fed will continue to slow down its bond buying program. plenty you have big retailers is with earnings this week. macy's, home depot and target beat target expectations. sears lost less than expected. and tesla is revving up to meet

demand. the four sun belt states are in contention for a billion dollar plant to build batteries for its cars. as many as 6,500 jobs are at stake, nevada is, arizona, new mexico and texas are the finalists. janet yellen speaks, the economy cools a bit but the markets don't. so how does it affect your investments? joining us now are nick colas, the chief market strategist at converge effective and scott clemons, brown brothers harriman. nick we just heard the gdp numbers were worse than we had been expecting. is this a backwards looking number? >> it's a backwards looking number. it base lines our expectations for how q one is progressing. for the weather and its impact, it's useful to see the economy is quite slow you think the economy is worse than the weather is letting on here? there's something else happening? >> this is definitely a grow growth economy.

when that happens, we get a lot of pulls and tugs on the economy. it will make it feel like it is slow at the very least choppy. we're in for an entire year like this of kind of slow choppy growth. >> that's not a great thing for the markets or for anybody trying to work in thesement haves. scott, do you agree with that assessment? >> i do. i think this is more of the same. i was surprise the at the preliminary release of the fourth quarter gdp. this doesn't strike me the revision today is particularly negative, mor backing to an economy growing along at a modest pace. >> scott, how do you think janet yellen did this week when she spoke before the senate? >> she's following in the footsteps of her chairman bernanke and is vex carrying on with the new tradition of communication being one of the tools in the fed's toolbox. the way i expect the fed will continue to talking about changes and quantitative easing and about the like little changes in interest interest policy will soften is the

beaches for when the rates begin to rise down the road. >> what do you think about the slow down of the bond buying program, nicking? do you expect it to continue? >> yeah, i think it will continue. it is at the right measure. i think the federal reserve understands that q had a role in 2013 and 2012. we have to get back to normal or at least move back towards normal. it's a great first step. >> we boek with bullard, st. louis fed president this week. the thing he said so interesting to me is that he originally thought that the 2014 at least in december, he thought it would be the year that they actually raised rates. he said this week he'll probably have to reassess that. he's probably looking at early 2015. does that sound right? >> it does. this was supposed to be a breakout year. it's quite clear we're still moving along in first, maybe second gear, nowhere near third, fourth or fifth. slow growth, 2, 2.5% tops for the back last half of the year. >> scott, what are you tell investors right now?

>> same thing. the fed is focused on two mandates, price stability, that's the inflation issue and that's well in control in the fed's opinion. they don't worry about inflation. that means they can keep all their firepower focused on the other part of the world, the labor market. in spite of the fact of an unemployment rate rapidly closing in on the threshold of 6.5%, it was set earlier, when is you look under the hood of the labor market, there are weaknesses still there. labor force participation rates, long-term unemployment. the fed is sensitive to those things and doesn't want to run the risk of that turning down again. >> we did see the s&p 500 this week finally push above the highs that it closed at the end of last year. we've been struggling for two months to get there. finally back above $18.50. nick, does this city you is the bull market has room to run or on its last legs? >> it's a bit on the tired side. last year we had a 14 times earning market. it was straightforward to get us to the 1800 level.

still relatively affordable but no where as cheap as it was. we'll have more volatility and move higher with more churn. >> nick, one thing i've seen with the retailers' earnings, we got slowed down in january and february but hoping with the return of warm weather, the consumer will come back, too. is that just a pipe dream or do you think it will speed up a little bit? >> it will speed up a little bit because things have been so tough. let's face it, the comment is still in a slow growth mode. any notion of meant up demand where people are getting ready to spend money seems to it be an illusion. >> scott, in terms of people who need income from the markets, what do you tell them? >> it's hard to find. we're cautioning our investors not to reach too far for yield bill lowering their standard on credit or by going too far out the yield curve. buying longer duration longer maturity fixed income. the risks associated with those efforts are not compensated by

the incremental pickup in yield. a lot of our clients are sitting on high quality fixed term income essentially a cash equivalent but the option value of that liquidity has an appeal if nick is right and i think he is, we're in for a market with a lot more volatility. gives people the opportunity to take advantage rather than suffer from it. >> thank you both for coming in today. up next, we are touring is the health of the housing recovery in neighborhoods across the u.s. what higher prices in some cities mean for momentum, mortgage rates and you're money. later, he was the nba's biggest advocate and turned it into a crossover success. we'll talk to david stern about his legacy and the nba's drive for growth. right now as we head to a break, take a look how the stock market ended the week.

u.s. consumers spend some $2 trillion a year on housing. it's recovery from the worst of the 2008 financial crisis has been key to broader economic stability but after years of increasing home values, some numbers out this week could signal the best of theed into news is behind us. david blitzer is manager of the s&p dow jones indices. >> veer ras gibbons from zillow. >> housing had a very strong 2013, up better than 11%, but the numbers seem to ithaca there is a slowdown in momentum. what's really happening? >> if you look month to month, the first half of last year, went straight up. the second half of last year flattened and drifted down a little bit. as we look at all the other data that's come out, housing starts have been soft. existing home sales were soft.

new home sales a bit of a press sant surprise. across the board, there's a lot of softness, a lot of indicators. prices are up. 10, 12, 13% in the last year. that in itself is likely to tamp the market a bit. mortgage rates are up better than a full percentage point since last may. everything points to continued growth but at a much slower pace. half the rate. >> how much the most recent numbers are the effect of weather? it's hard to have housing starts when there's snow all over the country. >> all these data are seasonally adjusted. the joke used to be if you got a big jump in january, one guy built an outhouse in maine. the numbers are seasonally impacteded. this is not all weather. we've been seeing this pattern since probably august or september. so the weather was wonderful back then. they've forgotten it. >> vera, what does it mean for the consumer?

david talks about mortgage rates ticking up. >> it's still a good time to buy. mortgage rates are historically low. zillow expects they'll hit 5% by the end of the year. affordability is still high in most major markets. not all markets but most markets. you've got more inventory coming on the market because of new construction, fewer underwater home owners. buyers will have more selection. there hasn't been all that much to look at. and they're going to be up against fewer investors notice market because they've retrenched. buyers are going to have a little more wiggle room in price. may not have to be as an gres be with the initial offer. it's a great time to buy. >> we have to go through this on a market by market basis. where are the good and bad markets? >> well, in terms of where the rebound has been, san francisco leads the way. that's also a place where prices have surged incredibly and if you want to look at a market where the price rise is maybe having an impact, that's clearly

one. the big surprises are phoenix and las vegas. they were two of the worst hit sun belt disasters. and i guess the sun is shining more than anything else. and so on. at the other extreme, where probably supply is an issue is the more traditional industrial areas, cleveland, chicago, and the northeast. >> meaning there's too much supply? >> no, where it's -- there's not that much land. it's harder to build. so you really can't have the kind of burst. >> zillow looked at some of the hottest markets hottest characterized by lower than average unemployment, population growth greater than 2% over the past two years, and home value appreciation are projected to be over 2% over the next 12 months. on that list are places like austin, san francisco, seattle, boston, portland, jacksonville, florida, miami is on the list. >> north dakota.

seriously, north dakota, lowest unemployment rate and the most oil drilling in the country if not the world. >> vera, if you had to call there a buyers or sellers market at this point, what do you say? >> sellers are up against challenges. last year they sort of called the shots. i feel like sellers will be up against more competition now because home values continue to go up. they want to get in the game. they're not going to call the shots the way they did in the 2013. buyers are still in the driver's seat for now. >> this is a very strange thing about home and housing and the market in it iraq. and that is almost everybody seems to feel good when the price goes up. it makes no sense because there are two sides in every market. but it's not only in the last seven, eight years of the boom and bust, but consistently, home prices are rising. people feel good. maybe it's because most homeowners aren't about to sell. they just feel richer when the price goes up. >> they had a good year last year. we recuperated $1.9 trillion.

no one's expecting that appreciation this year. >> i would agree with that, but i think in terms of the tenor of the way people feel and and what attracts people into the market it, because most of the sellers have to go out and buy another house. they're probably going to buy a bigger house or more expensive house, not a small one even though we talk about how somebody has to scale down. nobody seems to do that. the rising prices from last year i think have added a lot of optimism in terms of the housing market. that will keep it rolling. whether the buyers or sellers do better is i'm not sure there's an absolute rule. >> veer va, david, thank you both for coming in today. >> up next, we are on the money. reaching $5.5 billion in revenue, has the nba realized its hoop dreams? we talk to the man behind the league's rise. you can find us on gazebook, facebook.com/otm.

>> the nba is i multibillion dollar business with a worldwide fan base. many say it's thanks to commissioner david stern who stepped down earlier this month. how was he able to rebrand the nba into an international success? and is more growth in store for the league? joining us is david stern to reflect on his legacy and hopes for the nba's future. thanks for being here today. >> thank you for inviting me. >> you have had a phenomenal run with the nba. or more likely i should say the nba has had a phenomenal run with you. you turned this into a 55 -- or

$5.5 billion revenue brand. and in 30 years time, that's amazing growth. how did you do it? and can they continue growth like this. >> the answer to can they continue is yes under commissioner adam silver, the growth will continue to be astounding in my view. and the way we did it was learning from everier who corporation that was doing business. it was a best practices assault by us. when coca-cola made the point i think very effectively most of their profits would come from outside the united states, when television began growing outside the united states, when american brands began to be accepted on a global basis, we used to sit around and say wait a minute, that could be us. >> is that what you were doing, watching what was happening in business and saying we can do the same thing? >> yes, yes, yes, we copied what everyone was doing, and actually, sometimes saying no, no, we're not going to do that. that's not a good idea.

>> what's something you decided wasn't a good idea and you didn't want to the go down that path? >> well, we never wanted to have manufacturing facilities that we owned. we decided that licensing was probably a better idea, although we wanted them to be branded products, we thought that we could do quality control in that way. so we did have enormous growth from let's say $40 million of retail sales to $2.5 billion of branded is products that we worry about, and from virtually no countries being recipients of nba television, now we have 215 countries in 40 some odd languages. >> that's why i wonder where the growth comes from now. because you seem to be everywhere. the nba is ubiquitous around the globe. >> the growth comes from the delta here between where we are in the market and what the potential of the markets are. and even though we've had

success, 85 or 90% of it still is domestic and market by market, china is a huge market. and you can sell a lot more nba merchandise the chinese market is growing with respect to advertising revenues, and if you look at it country by country, there's enormous growth left in all of the sectors in which we operate. >> let's talk about the television rights here in the united states. is the next time the contract comes up, do you think the league should be sticking with its plan to have the abc, espn, tnt type of formula or an nba break down where you give some to each of the broadcasters. >> interestingly enough given the modesty of the nba versus the strength of the nfl, we now have three, you know, three big broadcasters in abc, espn and tnt and what we have with the

nfl does not have the is enormous rights deals at the local level. we have 30 teams more or less regional sports networks and the like. so the models are different but the one thing i'm confident about is that commissioner silver is going to have a good time negotiating renewal of these expiring contracts because the nba is the last big one that's left up for grabs and so that's going to be a good thing for the value of our franchises and for the salaries of our players. >> that's true. let's talk about some of those players. jason collins, the brooklyn nets, just signed him, the first openly gay player in the nba. what do you think about this move? did it surprise you? is it something you expect to see more of? are we making too much of a big deal about this? >> last point. we made to you much of a big deal. if i could drop a name i was at a dinner at the white house two weeks ago. and i saw jason, and he was

sitting down at a cocktail hour. i said jason, you'd better get up because if you think you're going to be eligible for a ten-day contract, you'd better stay in shape. sophie e-mailed him two nights ago. i said i guess you were in shape. i think it's terrific. i think we should talk about the fact that the nets really need a seven-footer who can bang and giveaway six fouls and what what he has to do in the middle. i'm sure there's going to come a time where it will be just a nonissue. >> i know you haven't had a lot of time to reflect yet. looking back, what are the things in your legacy you're most proud about and maybe something you wish you had done? >> i don't like the word legacy, but as i've been reflecting a little bit, people forget that in 1991, that magic -- when magic announced that he was hiv positive, we were a country with -- that was ignorant about

aids aids, a little boy in indiana ryan white had been kept out of school because he was hiv positive because of a transfusion. and magic and with a little help from us, changed the debate on hiv and aids around the world because a beloved face was the face of hiv, and i reflect back on that as a -- as sort of something which told us and the world that this sports really does have something to teach. >> commissioner stern, i can't thank you enough for your time today. appreciate your being here. >> thank you for having me. up next, a look at the news this week that that will have an impact on the money and the investment that paid off better than the market in 2013. of course, you had to lose something something before you could make money in this case. before we come back, the tooth fairy puts her money where your mouth is.

for more on our show and our guests, go to our website, otm.cnbc.com and follow us on twitter @on the money. here with the stories coming up. on monday, 0 motor vehicle sales for february are due. the ism manufacturing index which tracks the strength of the sector will be out. on tuesday, millions of americans will be celebrating mardi gras, known as fat tuesday. also on tuesday, president obama will announce his proposed federal budget for 2015. and on wednesday, the federal reserve will release the beige book, that compiles anecdotal information about u.s. economic conditions on on friday, the

jobs report. finally some numbers to sink your teeth into. cash gifts from the tooth fairy hit an all-time high in 2013, reaching 3en $50 per pearly white. more than a 44% rise over the previous years $2.42. in fact, the tooth fairy outperformed the s&p 500 which had a great year last year, up about 29%. $3.50 a tooth. that is light years past those of us who remember a quarter a molar. that's the show for today. i'm becky quick. thank you for joining me. my guest next week, the oracle of omaha is, warren buffett. have a great one and i'll see you next weekend.

then don't miss sleep train's wbest rest event.st ever? you'll find sleep train's very best mattresses at the guaranteed lowest price. plus, pay no interest for 3 years on beautyrest black, stearns & foster, serta icomfort, even tempur-pedic. and rest even better with sleep train's risk-free 100-day money back guarantee. get your best rest ever from sleep train.

superior service, best selection, lowest price, guaranteed. ♪ sleep train ♪ your ticket to a better night's sleep ♪ >> you're watching an industry go from an underground -- what i like to call the "wild west days" -- into a respected, legal, licensed industry. >> there's endless business opportunities. it's like the internet boom. >> do you represent the new generation of cannabis entrepreneurs? >> this is america's new hot industry. >> so, it's always important to make sure that you have high-quality pot. >> with the medical marijuana, you take a hit of it, you're starting to feel, "okay, i hurt, but i really don't care that i