that is "power lunch" for this wednesday. thanks for joining us. i'll see you an hour from now on closing bell. we'll see if we hit dow 17,000. >> maybe. it's been fun, bill. thanks. have a great 4th, everybody. "street signs" begins right now. and welcome, everybody, to "street signs." pimco has one big investment idea for you. bond king bill gross will be joining us in a moment's time. are you dreading the airport this weekend?

what is happening at our nation's airports that is costing our economy $6 billion a year? the man behind the deal to sell songza to google. beef prices are up, shrimp prices up. sarah and i hitting the market to find out the cost of your barbecue this weekend. >> the australia, throw a shrimp on the barbie. let's kick it off with the market. it looks like stocks are building on those gains that we saw yesterday. kicking off the first half on a bullish note. there is the dow eyeing the 17,000 level. it's flat markets. it's green arrows. treasury has actually sold off after the better adp report where the private sector grew 281,000 jobs in the month of june setting us up for the jobs report tomorrow. we have bob at the new york stock exchange. rick santelli.

bob over to you first. >> mostly we have been stronger on the adp report earlier on. interest rates did move on the up side. take a look at the dow jones industrial. once again, sarah, very, very narrow trading range. 33 points in the trading range. normally the dow will move 133 points from the top to the bottom. still to the up side. take a look at some groups that have been moving here. emerging markets. slowly coming back. one year high on the eem. who would have thought that? whole group in terrible shape. commodity names, for example, so some of the steel stocks and some of the iron ore stocks are slower. proxy dispute with cliffs natural right now. but all this group is moving to the up side. we're also seeing steel stocks in general move very well, commodity names i've mentioned. new high on the slx. steel one. global commodity play here making a comeback. overall take a look at another group. i want to point out the social media stocks.

these have fallen apart here once again coming back. this is what i keep talking about, the rotation going on. groups fall back. other groups come up like energy. in the middle of it they rally again. that's why the market stays at new highs. we get groups coming back and others moving forward. >> the rotation. now let's turn to bonds where we did see the selloff. on the better jobs report, rick sen ta santelli, over to you. >> 281,000 is a good jobs report. how much information or how indicative will it be of tomorrow's number. you can clearly see we're up on rates, down in price, parallel shift on the yolker. interest rates 5, up 5 basis points. open up the chart. these will be the highest yield closes for five year since the 23rd of june. if we look at a ten year, same thing. 815 eastern. boom, rates go up. treasuries sell off. also up 5 basis points. open the chart up. these could be depending on the final hour or two the highest

yield closes since the 17th of june. and everything is logical on every sector. dollar index as you see on the interdate chart is up and getting very close to testing unchanged on the year from the bottom up. back to you. >> yeah. dollar's been moving with the yield. thanks, rick. over to dominic chu. >> gravity has taken close of one of the helium stocks. this time it's gw pharmaceuticals. off the session lows. still down 4 1/2%. investors looking to take profits in the stock. it had been up more than 50% just this month alone. so, mandy, gw pharmaceuticals may be a little bit of air or helium out of that balloon. >> thank you very much, dom. happening now, a major tropical storm making its way up the east coast. just in time for the holiday weekend. the big impact on your holiday plans moments from now.

firs first, pimco has a big look. joining us is the bond king. bill, it's really good to have you with us once again. i don't mean to be disrespectful. genuine question. io is tied to one big idea. i was reading through. all i could see is about the new neutrals. what's new about this new neutral? >> well, i think what we're trying to do, mandy, is to increase the public perception in terms of the value of the new neutral relative to all assets. fed funds can move up and move down. the market expects them to move up in 2015, but it's not so clear i think in terms of stock prices, in terms of high yield spreads and corporate bonds that the long-term new neutral basically prices all assets. so it's important in terms of putting together a newport folio and total return to know where that new neutral is going to go.

so, yes, we've talked about it before. yes, we think it's the number one thing, but, you know, let's extend it out to stocks and extend it out to high yield spreads and talk about what's of value in the marketplace. >> you know, talking of pricing assets, i'm sure you heard what yellen had to say earlier today. it got people talking the fact that she seemed to be favoring regulation instead of using monetary policy to create financial stability or cool down financial exsentences sess. what do you think of the fact that they're moving towards regulation versus monetary policy? >> i think that's important. it's not just janet yellen by mr. carnie at the bank of england. they seem to be suggesting that the policy rate, the new neutral as it moves up over the years is a blunt instrument and that other instruments such as macro prudential policy, let's talk about a few of those, the amount

of equity that a bank has to hold, the amount of equity in terms of a loan amount, those are macro prudential policies which they failed to enforce in 2004, 5, 6, 7 which led to the great recession. i think it's important when janet yellen endorses this not as a solution but as a guard and a guide to financial stability going forward as opposed to simply raising interest rates. >> it doesn't get wonkier than that, bill. my favorite part of janet yellen's speech was when she talked about financial policy and the impact on risk taking. risk taking can go too far there by contributing to fragility. how fragile is the system as a result of our monetary policy? >> well, she would suggest and you cited an important sentence, she would suggest that not that fragile. i mean, the fed has a financial

stability indicator. we follow it every day. >> but what about you? what do you think? >> we would say this, that high yield spreads as an indicator of excess, that stock prices, dow 17,000 as a potential indicator of excess, are they excessive. we would again go back to our new neutral and say this, that if fed funds going forward stop at 2% instead of 4% which is historical, then stock prices at 17,000 and high yield spreads at 350 basis points over treasuries are attractive and are less bubbly than some would imagine. yes, they're narrow historically, but based on our assumption that this new neutral stays low, then they're not as bubbly as some would suggest and i think janet yellen knows that too. >> do you see any pockets that might be bubbly, too.

yellen said she sees pockets of increased risk taking across the financial spectrum. where do you think it is bubbly? >> there's bubbly aspects in terms of the terms and conditions in terms of bank loans. there can be tight conditions which restrict a company in terms of their ability to lever going forward and then there can be easy types of covenants and restrictions. certainly the fed sees and we see as well that over the past 12 to 18 months that the standards have been used and perhaps are a little bit bubbly. in terms of spreads themselves and the prices of, you know, spread assets and risk assets, we think we're basically on a normal level if the new neutral stays low at 2% which is where we expect. >> i have to ask you, morningstar out today saying another $4.5 billion outflow. 14 months of outflows. how are you going to stop this bleeding? >> well, you know, the tide

comes in, the tooiide goes out. we think it comes in again. it's based on performance. it's in the 85th percentile. for the year we've returned close to 4% for bond investors. we need to get that word out. thank you for giving us the opportunity. you know, the tide is going to come back in again and the total return fund will remain the number one bond fund in the world. >> we mentioned last week that you still outpaced 2/3 of the bond funds in the second quarter. thank you very much. now let's get to some very literal economic forecasting. the first named storm of the atlantic hurricane season making its way up the east coast. the impact on your 4th of july plans and the economy. google upping the ante in the music war. why mcdonald's might need to think up a new slogan. "street signs" is back in a flash.

the first named storm of the atlantic hurricane season is making its way up the east coast just in time for your holiday weekend. richard lieuielieui is standing live. >> we're getting a little bit of rain as arthur, the latest advisory from the national hurricane center is it's 110 miles east northeast off cape

canaveral. they have a tropical storm warning. that's the first time we've had this off the area of north carolina. this as you can see one of the latest fingers or bands coming through this central part of florida. florida right now, all of the watches have been lifted. the concern though is because we haven't gotten this ride. bravard, in terms of emergency operation, at a level 2. partial readiness should something like this happen. the concern about these little downpours becoming more than what they are right now. farther north we're watching arthur move towards north carolina and the -- that area will become a hurricane tomorrow afternoon then head towards new jersey and new york. those location, higher tide concerns. check local officials for the red flag warnings if you get back out into the ocean. back to you, mandy. >> hard to believe hurricane season already on us. the storms could have big impacts on gas prices. more than a million people hit the road for the holiday

weekend, morgan brandon is on pump patrol. morgan, how do the prices look? >> reporter: well, we've got more pain at the pump going into the holiday weekend. we're looking at a national average price for a gallon of gas of $3.67. that's according to gas buddy. that's the highest july 4th price we've seen in six years since a gallon topped $4 and oil was trading at well over 140 bucks a barrel. now today's price still 10% below that 2008 peak, but it is 5% higher than last july 4th and 40% higher than during the recession in 2009. prices usually drop in june just in time for peak driving season. this year they've risen as conflicts in iraq have pushed oil prices higher than they were a month ago. drivers starting to feel the pinch. >> gas is going up. it's cheap. i live in bloomingberg. i have an hour drive. i'm trying to get the most i can

in gas. >> reporter: but there is good news. oil prices and gasoline futures have been falling for the past few days so unless violence in iraq spreads to the south where the oil is or a hurricane like arthur gains enough strength to actually knock out refineries, this could be at or near the peak. it projects a range of 3.60 to $3.70 a gallon until labor day. it doesn't look like this is cutting into or hurting folks' vacation plans for this weekend. aaa estimates that 41 million americans will travel more than 50 miles this weekend. that is a 7-year high. most of that is going to be by car. back to you. >> okay. thank you very much, morgan brennan. if you think the roads are going to be bad, don't go to the airports either. especially if you're a traveler traveling foreign. there are $181 billion in the

economy. that kind of traffic leads to, yeah, big wait times that just might discourage overseas travelers from coming to the u.s. at all. joining us is the president and ceo, roger dow. i was reading some of your stats and i was gob smacked. 43% of overseas travelers coming to the u.s. said they would avoid a trip to the united states. really, it's that bad, coming in and out of the customs, waiting in the lines and all of that is that bad? >> it's really a problem, especially in the summertime. look at our gateway airports. sometimes last summer they waited two to five hours. five hours sometimes at kennedy. so it's a major problem. they get ticked off as you would too. they tell their friends. you shouldn't go either. it's a problem. these are great aspects to our economy. >> what are the solutions to that problem? is it just a case of hiring more customs officials or is there a much, much, much bigger infrastructure problem at play

here? >> i think the first thing that needs to happen is you need more customs officials. it's like having one cashier at costco on the holidays. they're trying their best. they're add being teing technol. the other thing we have to do is improve our airports. we used to be the top airport system 15 years ago. we don't have one in the top 50 around the world and that's pretty discouraging. we have to do things like that. >> it's something we've heard a number of times politically that we need more infrastructure spending to fix our infrastructure and roads. what's the appetite and what are you doing? >> we're doing lots of things. first of all, we're getting the word to congress. we have to stop kicking the can down the road. we have to improve infrastructure and explore every avenue. congress has to get the guts and courage to do something positive. americans want this. americans say i'll pay a little more if i know it's going to

improve the problem. >> what about privatizing airports? >> you know, there's been some look at that around the world. right now would be extremely difficult. there's aspects to be privatized. if you want to keep security in the hands of the government. >> you wouldn't want to privatize the tsa? >> i think they can add value but the people at tsa have to be customs officials. there's been experiments. the big problem is fix the infrastructure. we have to get more visa waive companies. we have to approve brand u.s.a. which is promoting america at no cost to taxpayers. get congress to approve it. >> roger, i know you're primarily focused on getting congress to act. i wonder how friendly this administration has been to travel and tourism only because

penny is a billionaire in the hotel industry. i would think husband very encouraging to attract foreigners. >> penny has been a fabulous proponent. she understands the industry and commerce. this is a bright spot for the administration. the president has gotten behind improving travel, getting other travelers here. he set a goal to get to 100 million travelers in the next six years. just yesterday i had a conversation with gill carlokowski. they want to improve the log jam and get more people and improve the technology. >> it's a shame it's costing us so many billions of dollars. take a look at this video, huge protests as bus loads of undocumented immigrants are being taken to facilities.

people came to meet the buses. one side yelling go back to mexico the other go back to mexico in spanish. there are angry exchanges between the two sides but no fights at this time. well, i shutter to think of any -- >> that name if you have not already guessed it is coming up next. plus, it's music to the ears of google investors. buying upstreaming music site songza. are feeling the love, too. by offering things like on-the-spot data upgrades -- an idea that reduced overcharge complaints by 98%. no matter how fast your business needs to adapt, if hp big data solutions can keep wireless customers smiling, imagine what they can do for yours.

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age? who cares. in honor of the fluttering sound outside on new jersey hq, today's sunshine stock is shutterfly. they're so i remembaring. they've put themselves up for sale. the stock is still negative year to date.

it's getting a gain of 15% just today alone. speaking of deals, google acquiring music service song zls za. what does that mean for google. let's bring in david hirsch. he was an early investor in songza. won't tell us how much the deal went for? there are reports above 30 billion. >> it was less than the beats deal. >> tell us about the $3 billion. >> more than 15 million. the beats deal. can you give us a ballpark? >> i cannot. we're thrilled for elias, peter, the songza team. google is a better place. the future isn't about people finding things, it's about things finding people based on situation and context and i really think that what songza has done is brought content to

the web. >> i was going to say, we're riding your bioon the side of the screen. interestingly, you worked at google as well. not only invested in the streaming music business. >> right. >> where do you see it fitting in with google play, youtube, their business? >> when i was here last time, we said music is great at telling stuff, just not music. we know music is a difficult building. there are rights management, egos, artists. so back to context. you know, we think that songza brings context and applies to google now and google play. it's about discovery. how do we discover the right context. >> which is a great pitch. i love it. >> do you want to buy it? >> you're a good salesman. >> do you want to buy it? >> it's a competitive landscape. you have pandora, spot at thify

and beats. if i listen to spotify and pandora, why would i switch over to songza. >> they're much smaller and they love it. i couldn't go a day without people telling me how much they love it. it's the experience. you see the trends of experiential. apis. what the world has forgot is about people. the only api that matters is the human api. >> what does that mean for google? >> what it means for google is it's a discovery engine. the con see arge service. >> how they curate? >> how they curate and more importantly, the user experience. they went from an old stodgy crowded interface to a slick, mobile interface that can be applied. >> great interface.

>> check out the site. i'm in the mood for zen, bopping around. >> every emotion. look at uber. we used to look for taxis. raise our hand. go around the corner. now we hit a button and the taxi finds us. that's songza for content, commerce, everything. >> really quick. you've been with eliason from the start. who are you going to be with next? >> listen, it's find rock star people in big categories ready for disrupgs. we're agnostic. we are looking for the next platforms, operating systems. wearables. alternatives. >> all of the buzz words. >> listen, it's about great people and big categories and i really hope and trust i'll figure it out. >> david hirsch, great to see

you. >> thanks so much for having me. one busy stock is enjoying a nice buzz today. we'll tell you who it is and why ahead. plus, we're firing up the grill and tally just how much that cookout is going to cost you as food prices have been rising. it's expensive but delicious "street signs" and it will be right back. i'm randy and i quit smoking with chantix. as a police officer, i've helped many people in the last 23 years. but i needed help in quitting smoking. along with support, chantix (varenicline) is

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built for business. time for street talk. daily rundown on analyst's recommendations. >> we'll start with energy company. baker hughes. susquehanna. a lot of investment in the states. >> that's true. it's increased to $90.77. the stock by the way has done very well. increased 58% over the past 12 months. >> artisan partners asset management. bmo capital. >> bmo it's showing solid net asset growth and expansion. they place a $58 target on the stock. the stock is moving down by that after the rating team put a sell on the stock. >> here's an interesting one,

jb.com. >> jd's strategic partnership is capturing m commerce growth. ipoed back in may. the company's stock is over 52% since then. >> a lot of the chinese ipos have done well. >> a buy at rbc capital. >> it's placed at 86. that's 16% higher than where the stock is sitting now. for the year, they're up 18%. >> industrial conglomerate. under the radar name, i gate. they're upgraded to buy from hold at jeffries. a down day. >> a bit of a down day, 2.5%. they're producing a rating which is a valuation. it's increased from $39 to 43. currently sitting there at

$37.72. well, one company that is moving higher today, constellation brand. did you see this? strong earnings out of this company paying $5 billion for the right to distribute coronas. the ceo will be talking to bill griffeth on closing bell. i know you'll have a lot to talk about including the corona story. >> this is like the third interview we've done with rob sands since that acquisition last summer. the numbers keep getting better. the truth, guys, is that beer consumption in this country has slowed actually. we are turning more towards wine and distilled spirits but that doesn't mean you can't make money and they have proven that at constellation. this has been a home run, the acquisition and division that they' they've purchased from anheuser-busch, the belg belg

begun brewer. the trend is showing up. margarita with yun side down coronas in them. i'm not kidding. >> i believe you would know about a cutting edge trend like that, sarah. >> just ask the ceo. >> i will ask. >> between your beer and our barbe cue, we have the perfect cnbc. >> july 4th. >> there was a plan behind all of this, wasn't there? >> well, an unplanned plan has somehow come together. thanks a lot for that, bill. >> yeah. >> why don't we talk numbers on constellation and take a look at the fundamental and technical side. we have ari wald of oppenheimer and david seaberg of cowen and company. is the growth of the company going to come from beer or the spirits business feeding into what we were talking about? >> well, first of all, i'd love one of those margaritas with an upside down corona. give me an address where i can

get one? >> miami beach. >> $900 million in sales. i think $72 million came from spirits. so it's a beer story, and that's where the visibility is. with the acquisition they did last year, the margin they're receiving plus the visibility gave them the ability to raise estimates. i think free cash flow was a very important thing after that deal. they reiterated guidance there. that's very comforting to investors but, you know, i think there's also a little bit of a value or premium here placed in the fact that there's a scarcity value and the companies that have the ability to really take a big beer brand and grow it in the united states. so i think they've got three things that are going for them that will help the stock long term. however, i would say near term, near term i think that you could see a little bit of pull back here. if you look back to the past three-quarters we've seen the stocks trade up and over the

next several days pull back a little bit. i wonder if they got a little bit of a halo effect from the world cup similar to the buffalo wild wings. we talked about that in your show a couple of weeks ago. i have to say, 21 times i question if a 4% hike in the earnings is enough to really get the stock going. >> david, hang on. we want to get the technical side of things. nice 3% pop. ari, do you toast the charts? it's already been a moon shot. >> yeah. there's no reason why it can't continue to grow great. no cracks in the trend. it's been a leader in the industry, in the sector and the market. i think that can continue over the long term. if you're in it, stick in it. the question is where do i get in it if i'm not? i think after today's pop you can be a little bit more tactical. it's due to consolidate. there's two things i'm looking for. $86, that was the prior peak in the first quarter. that's going to be the support.

the risk/reward gets very attracti attractive. the second thing i'm looking at, how the price is behaving. deviation, 100 day moving average. i look at the 100 day moving average like a center of gravity. i think the stock's on its tippy toes. more vulnerable in the near term. if the stock can move sideways, that catches up. you have a much stronger center of gravity. >> good way to put it. thanks, gentlemen. good to see you. be sure to check out the online edition of talking numbers. that's our partnership with yahoo! finance. >> the dow seems to have stalled on its way to 17,000. does that mean the rally is over or are we just having a little pause, a little refresh? plus, what if we do get the correction we've been waiting for? what do you need to do? we have expert advice on your portfolio coming up next. tdd#: 1-800-345-2550 ...you see opportunities.

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and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. we were so close to hitting dow 17,000 yesterday. not so close today. >> i see some signs of life in the economy that make me optimistic but i see risks.

the adp number this morning was terrific overall. we had the biggest jump since november 2012. new home sales up 18%. pending home sales up 6%. i'm a little worried. there are two things that worry me. far and away number one i'm worried about a rapid spike in interest rates. for example, if we got much stronger job growth statistics, that would likely lead to wage growth. i'd love to see a little bit of that, but i think it would spike interest rates. we had sudden big moves in the economic numbers. a major geopolitical crisis. the ukraine and iraq are crises, but they haven't turned into geopolitical crises yet. there are a lot of people demanding a lot of change from their leaders. some of this eventually could eventually turn into a much greater crisis than we've seen so far. back to you. >> thank you very much, bob pisani. i know you put out an

interesting note today. it's getting a lot of people talking. if they want to check it out get it on cnbc.com. let's bring in cnbc contributor, dan greenhouse. andreas, is there a lot of complacency out there? >> i think it's interesting because we look at volatility and we assign the fault of volatility for the complacency. that's just a reflection of the fundamentals. if we look at the fundamentals, they look okay. if you look at the fed they have the credibility that they've earned. >> you think so? they still have the credibility? >> they do. >> even as they're passing the buck on using monetary policy? >> they still do. i think how they communicate the next couple months will test that. if you look at the u.k., there is a way out of this as long as you project where you're heading. they have the credibility. ultimately that's the way volatility flows. that can continue until the

fundamentals deteriorate and that leads to complacency. >> dan greenhouse, that gets to the heart of janet yellen's speech today with christine lagarde. is that the right stance for the fed to be taking at this point where we are seeing record complacency and low volume? >> unfortunately this is way longer of a topic than we're going to have time for today, but generally speaking i do agree with the idea that interest rates are what policy makers call a blunt tool with respect to addressing imbalances in various parts of the ee cko and markets. the fed is in a damned if you do and damned if you don't. if they don't raise rates to target what some people perceive to be bubbles, it's going to be argued that they're contributing to those bubbles. if they do raise rates to target bubbles, a whole host of other people are going to be arguing that it's not up to 12 people in the room to be deciding what is over valued and what is not. >> you know, i was reading some

recent commentaries from you from yesterday. you were saying expect rates to stay accommodative, inflation benign and earnings to be higher. i feel like i should be renaming you dan goldilocks greenhouse. is this the per se narrow? >> it's not a goldilocks scenario. i'd like to recharacterize it as realistic. it's been the environment that we've been in for some time. as bob outlined, the ever present spread of an interest rate spike remains. to the extent we forecast and relatively low interest rates in the immediate future, relatively benign interest rates in the immediate future and earnings on the up side, we still think the bias for stock prices remains the same. >> what would you tell your clients if they were asking you if you should buy protection on the cheap? not even a correction, even a 1%, 2% down there at this point? >> i think the best protection is to be diversified. our clients are trying to retire one day and the problem is to try to time the market from week

to week to day to day. be diversified and have fixed income, equities. the economic data improving but it's not necessarily 3, 4% gdp growth going forward. i was looking at that barbecue outside. it made me think -- >> that's for us. >> hopefully for me. no? am i invited? >> you're invited. >> when you cook ribs, you cook at high temperature or low temperature? low temperature. >> i don't cook. >> mandy? >> we don't cook. >> me neither. i just looked it up. when you cook ribs you cook them at low temperature. i think for the economy that's what's resulted in strong equity markets is an economy that's slowly improving rather than cooking. >> what happens if the nonpharmpay rolls come in slow? do we reset the rates from the fed? >> that's true. we don't want a down side or a 300 k which might ultimately actually question where the fed thinks interest rates are headed.

>> dan, i know your bottom line very, very quickly is just as long as it's good enough growth to keep earnings growth going and profit margins okay then the stock market should do fine? >> that's fair. i would also disagree somewhat. clearly if the nonpharmpayroll jumps 300,000 people have to start to reassess things, but at the end of the day jobs are not what -- is not as important in theory as the wage numbers. if the wage numbers stay benign then 300,000 to me isn't as concerning as it otherwise might be. >> dan, you are invited to the barbecue if you can get over the hudson river and to new jersey. >> thank you. >> dan greenhouse, good to see you. andreas, good to see you as well. we know travel is certainly going to be a hassle this weekend. if you choose to stay home and have a cookout, that is going to cost you, too. we'll get the skinny on the rising beef prices. >> yeah. we're also about to head outside. we're going to grab the tongs, grab the apron. we'll talk to a butcher what the rising prices mean for his

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welcome back, everybody. we're out here in the beautiful sunshine next to the grill. man, it's hot. we're about to cook some delicious steak sausages and burgers. we want to tell you about the worst burgers out there, not these guys, mcdonald's burgers. apparently they've been rated the worst hamburgers out of 21 local and national burger chains, mcdonald's came in dead last. >> what gained were the in and out burgers, i'm sure none of them will be as good as these guys. here we go. let's get to cape kelly and take a look at what these guys have been doing in the store, because that's really, really important coming up to the big grilling weekend. kate, what have you found? >> hey there, i'm on the piny paddle farm here in canyon falls, minnesota. this is shaping up to be probably the most expensive fourth of july barbecue ever, i'm sorry to say.

prices of ground beef and sirloin are now at record highs and consumers are not getting turned off quite yet. cattle market analysts like chs hedgings joe hoffmeyer take this to mean we may have underestimated the quarter. >> i think the economy is doing pretty well and that can be seen by consumer demand. if you told most people, hey, i want to go and throw a burger on their grill for fourth of july, they would say, yeah, i have the disposable income that i can go do that. we now have unemployment the lowest since prior to the start of the recession. that's allowing us to have a consumer that can take this on. >> that enthusiasm is playing out in the commodity futures market where you're seeing cattle of the third best performer in that group this year. that's, of course, after coffee and lean hogs which were up. but as it is, cattle is

experiencing a rally of nearly 30% to date. that's mostly the result of cattle and calf inventories that are literally at a 63-year low. they're at 82 million head at this point, which is the lowest since the early 1950s. that's thanks to both higher feeder costs and drought conditions. those dynamics show no sign of changing, which is remarkable. typically consumers tend to drop off due to their beef demand at this point in the season. people tell me they're not seeing any sign of that yet. these dynamics could continue for a while. >> kate kelly, thank you so much. how are these rising prices, particularly the local butcher, naturally feed through to us, the consumer, what we pay, and it might change the way we consume our meat. joining us now, pat lefreda. i think you're called the meat magician or the meat man. >> did you bring this?

>> yes. >> what are you finding? are being downgrading from beef to chicken, for example? >> beef sales are down slightly, 0.6 from the beginning of last quarter. but the beef industry has braced for this. and by 2016, the inventories will be back up to record highs and prices will come down. >> we've got to wait until then. >> we have to wait until then. prices from a year ago are up about 11%. we'll have a steady incline until 2016, but it won't be -- the inventory makes headlines, inventories are low. but like i said, the beef industry has retained those -- to grow more kalgs that we would grow for beef. >> i'm curious about the story mandy brought up, consumer reports coming out and putting

burgers mcdonald's burgers at the bottom of the list. there are so many changes based on what we eat and what is healthy. why don't the mcdonald's and taco bell and some of the older guys get it? >> the economy crunch started in 2008 in the financial crash. if you think about it, a burger is one of the perfect economy cuts because it's ground beef. it's chopped. >> economy cuts, you mean cheap? >> yes, less expensive than middle meats like our tomahawk rib steaks or our porter house steaks. but what goes into the burger is very important. what can go into a fast food burger and doesn't need to be disclosed on the menu is imported trimmings from many different countries. >> now organs and all kinds of things can be in, but -- >> well, it can be parts that you can't control the flavor profile. so in the higher end hamburger

restaurants, you'll have whole cuts of meat that have been chopped into burgers so you can maintain that flavor. >> talking of which, i know one of your clients is shake shack. have they had to have places like shake shack had to increase their prices to the consumer or are they absorbing the higher prices generally? >> so far, they've been absorbing it, which is actually very amazing of a company for doing that. >> not just shake shack, across the board are we being general not passing on to the consumer? >> eventually, it will pass on to the consumer. the problem with the restaurant is it's not so inexpensive to change the menu boards and what everyone is accustom to. shake shack is waiting it out to see if they don't have to raise the price. so you have a mix. steak restaurants over the last year, they've had to raise their

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meat and we're going to learn about a aussie tradition. >> if i was in australia, i wouldn't have any fancy skewer and i'd just throw it on like this. shrimp would be all right here. i think prices are up significantly. >> there's a demand. >> demand in asia of shrimp. >> economics. thanks for watching street signs. more coming up on closing bell. >> welcome, everybody. >> what fun we've been having on twitter today, but that's another story. a reminder that any game today for the dow and the s&p will put us at new closing all-time highs and we're positive on those two averages right now. the