Thing virtually all investors are focused on the timing and speed of rate hikes. Central banks benchmark shortterm rate which affects everything from Mortgage Rate to auto loans has been near zero since december 2008 and since theyve been so low for so long a lot of anticipation aboutn liftoff might occur. Yellins comments come weeks before the next meeting and despite the concerns the economy might be slowing. Steve leishman has the details. Janet yellen saying today she believes the rate hike will be appropriate this year if the economy improves as she expects. I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy. To support taking this step though i will need to see continued improvement in labor Market Conditions and i will need to be reasonably confident that inflation will move back to 2 over the medium term. Yellen was clear expectation is for growth to improve, seeing much of the weakness as temporary. This apparent slowdown was largely the result of a variety of transitory factors that occurred at the same time. Including the unusually cold and snowy winter and the labor disputes a ports on the west coast, both of which likely disrupted some econo activity. And the fed chair seemed reasonably confident to rise back towards the 2 target as the economy gets better. Particularly z a the job market is approaching full strength but not there yet. As far as the labor market is concerned, its cl to what she would like it to be. Inflation is pretty much dead in the water and it will take a number of months i think, before well see a different picture as far as inflation is concerned. Yellen also cited forces Holding Back Growth including muted business investment. Those factors will give her caution in raising rates, but so far dont seem extreme enough to keep the fed from hiking this year. For nightly business rep im steve leishman. As mentioned, the Federal Reserve is watching consumer inflation closely and today we learned prices increased slightly in april. The Consumer Price index rose. 1 , in line with forecasts, the Third Straight monthly increase. The core rate increased. 3 in april, the largest rise since january 2013. Jeffrey cleveland joins us now to talk about the fed and economy. Jeffrey good to have you with us. Are the markets reading good to have you with us are the markets reading the Interest Rate map correctly as far as when and how fast . Probably not, tyler, in our opinion. Bond investors in particular theyve been telling the story, this narrative, there isnt any inflation, theres not much growth and, therefore, the fed may or may not hike this year and if they do it will be slow and very gradual. And when i look at the data i see plenty of growth job market looks good and this morning, as pointed out, we did see a bit of inflation, so thats a little bit different than the narrative that Bond Investors have been spinning. So i think theres some sorry, go ahead. Given that then when do you expect t to make their first move on Interest Rates and how fast will subsequent moves be . She said this year so weve got that. I think pr good confidence there. Its difficult to say, sue, because they havent given us clear guidance as to what exactly they are looking for. She said further progress in the labor market. Were at 5. 4 on the unemployment rate. Are they looking for 5. 2, 5. 1, its an open question. She said she wants to be reasonably confident, cpi goes back towards 2 . Year on year basis were right there, 1. 8 year over year. In our minds, theres not much further to go so i think all meetings are live through june july or september, so some time this s exciting summer the first rate hike. Eight, nine years. So jeff are stocks and bonds reasonably priced given what you think will happen with respect to Interest Rate . Probably upside risk tyler, to shortterm Interest Rates and longer term Interest Rates. A twoyear yield,. 6 Percentage Points that probably goes higher over the year. If were right in our outlook. Tenyear yields right around 220 righnow. Those probably go a bit higher as well. I dont think the bond market has the story. Bond investors tell me there isnt any inflation, that growth was stagnant in q1. I dont think thats true but thats whats priced in. If you look at the equity market you know to me the equity market reaches peak levels in any cycle towards the end of the cycle, tyler. Were not there yet. Were a couple years away from that. I might be willing to stick my neck out, we could very well go higher as the economy continues to improve here. Right, got to leave it there. Have a great weekend. Nice to see you. As the stock markets moved today, it declined following the comments by the Federal Reserve chair, failing to hold on to highs. By the close, the dow jones indu a fell 53 points to 18,332 the nasdaq dropped one point and s p 500 about four. The blue chip dow index fell fractionally while the nasdaq and s p 500 rose slightly. Confirmation today the suitor for sales force was microsoft. According to reports, the two Companies Held quote, significant talks this spring about a Business Combination but the companies couldnt agree on a price. Microsoft was wiin offer about 55 billion, but sales force founder and ceo mark ben benhof was looking for more. Microsoft was off about 1 today. Sales force, though topped almost 3 . Deere reported higher than expected quarterly profits. Helping offset weakening Global Demand for Farm Equipment and that helped send shares higher by 4 . Mary thompson has more from a lawn and equ john deere overcoming the negative effects of the stronger dollar. Farm equipment like tractors and combines. The performance earning management a nod from analysts. Bot line line is the companies managing the downturn extremely well much better than the prior cycle. Keeping a tight rein on expenses the moline Illinois Firm more than 2 a share. Shares of 7. 4 billion missing estimates as lower prices for commodities like corn and soybeans hit sales of Farm Equipment in key markets like the u. S. And canada. Adding to the bang lower growth. What did work for deere in the quarter is construction and forestry business. Improvg. Economy and strong Housing Starts behind that divisions improved performance and while sales of big farm kwix fell sales of smaller machines like mowers sold in new jersey were steady. Thats good news for owner gus oddson. Ive been thr down years, so flat is always better than a down year. As for deere, it sees sales falling 19 this year more than previously expected. But it did raise its profit outlook, expecting to harvest more earnings from fewer sales by holding the line on costs. From white house station, new jersey im Mary Thompson for nightly busin some Construction Companies have also found a new way to help make sure projects get done on time by using drones. All of the Drone Industry is still relatively new and regulations are still being developed, one c sees big opportunity in the drone economy. Jane wells h so im going to arm the machine, arming. While the faa figures out what to do about drones the number of businesses wanting to use them is exploding, matched by the number of pilots able to fly them. Im probably 50 feet above the roof. Now a Company Called sky catch matches the two with work mode a sort of uber for drones. Need a drone for a job . Put out the call on work mode and a pilot will respond. This is the opportuni for you to get in and start creating their own business. Sky catch trains pilots and already certified nearly 1,000 of them. Its still a very new industry theres not that many people who realize what the capabilities are, so its been great to have them help me find work. For companies lik air systems, regular monitoring of sites lets them compare progress to plans. Each flight costs from 400 to 1,000. If we didnt have work mode we would have had to potentially carry a little bit more liability insurance. Heat maps actually show where there was activity on the site yesterday. Where sky catch really hopes to make money is analyzing and processing data even analyzing how much dirt has been removed to let you know how fast crews are working and with backing from investors, sky catch is growing in other countries and for drones the sky really is the limit. A year from now were probably going to be doing things we dont even know today. The company has received faa exemption to use its own drones and many of its certified pilots its done match making with have extensions as well. But the drone business in the u. S. Is starting in fits and starts. Its very different overseas. In fact sky catchs largest customer is the construction and mining giant in japan. For nightly business still ahead, a fivestar fund manager tells us which stocks hes betting on to produ the senate has a full plate of issues to deal with ahead of their memorial day. John harwood has more from washington. John lets start with the trade bill. Where does it stand, whats likely to happen . Well we expect tonight the senate will pass a version of trade promotio the negotiating rights that allow the administration to complete the big transpacific partnep trade deal so last minute flurry of amendments about currency manipulation the republican strategy backed by the white house is to have a separate vot on that so its not included here. They are reasonably optimistic they can prevail on that. Lets turn to the highway bill. In light of some recent studies on infrastructure theres a lot of pressure to get that through, but what is the reality of it john . A shortterm extension is likely to pass this evening before congress leaves for that oneweek recess. We still dont have a solution long term though sue, as to how to make the Highway Trust Fund solvent. Its run short because gas prices are down people cars are more fl efficient, so the amount of money that you need to do highway projects build new highways repair old ones is not coming in. Were not sure congress is ready yet to do the things like raising the gas tax that might close that financial gap. Where do we stand on the patriot act . Patriot act is subject to an agreement tonight to have a shortterm extension. Mitch mcconnell the Senate Republican leader strongly against the house version of the bill which curtails the nsas surveillance program. Mcconnell thinks its important for National Security reasons given the threisis tha argument is getting stronger now so hes trying to have a temporary extension to carry through for the fact that the authority for those programs lapses at the end of this month and try to work out a deal with the house. John thanks very much have a good weekend, john harwood in washington. Charter communications and Time Warner Cable both moving on more deal speculations and thats why we begin tonights likely to be well above 170 a share, according to the wall street journal. Last year charter originally offered about 132 a share, but comcast beat that offer before abandoning its bid. Charter was off almost 2 to 175. 29. Time warner cable was 3. 5 higher to close at 171. 18. Shares of Quest Diagnostics spiked. Some reports say the stock moved on talks of a buyout. Shares topped almost 8 to 79. 60. A proposed 19 million settlement between mastercard and target over the retailers 2013 data breach fell through today. This is not enough banks accepted that deal that would have paid the banks to cover fraudrelated losses. Both stocks were off just a fraction. Target closed at 79. 29, masterca ended 92. 69. And ink reported a moderate rise in sales as Strong Performance at its loft stores made up for sluggish returns from its namesake chain. Still struggling with weak traffic and competition. Shares were off slightly to 46. 97. Campbells soup reported earnings that topped estimates. The company also said full year sales going to be at the lower end offest malts but earnings at the upper end. Go figure. Shares top 2 at 47. 91. Foot locker says its last quarter was the most profitable in its history. All topping consensus despite that shares were off a fraction to 63. 46. Today a court ruled that activists cannot pull its top selling alzheimers drug from the market in favor of a more expensive extended release version. Lawyers for the drug maker say it would suffer 200 million in loss sales if it couldnt recall the older drug version. The stock up a bit, finishing at 301. 35. Our market monitor sees Consumer Spending picking up later this year and has stocks he says will grow 15 over the next one to two years. He is barry bradshaw. Running more than 2 billion in assets. Welcome, nice to have you here gary. Glad to be here sue, thank you. I assume that means you really do see the economy continuing to recover and grow near term. Sue, we really do. At the hodges fund we think the economy will continue to grow get stronger through the last half of the year and we think the consumer will benefit from that. The consumers not been spending a lot of late but we believe old prices will sta down lower for longer and put more money in the consumers pocket. I dont know gary stock pickers, stock pickers, your three choices tonight all have one thing in common food. The firsts ticket symbol eat, eat, tell me about it. Well youre right, tyler. Eat is the ticker for brinker international, which owns the chilis chains here in dallas. Theres 1,500 across the country and they have remodelled their store, revamped their menu, their same store sales are improving, and we think with lower gas prices a consumer will continue to go out to casual dining and chilis or brinker is a cheap stock at the Hodges Small Cap Fund in our opinion. We think earnings will grow about 15 a year for the next three years, trades at 15 times earnings and we really like the stock here. All right. If you cant cook your own at home go out for some good Old Fashioned home cooking, country cooking. You like Cracker Barrel for that reason. Sue, we do. We believe Cracker Barrel will be a long core holding in the Hodges Small Cap Fund as well. They have 635 restaurants, all along the interstate highway system and when were out driving more because of these lower gas prices were going to stop more at the Cracker Barrel. They too, are very well managed, they are improving their restaurant margins. Same store sales last quarter were over 7 and we think thats going to continue and thats going to drive Cracker Barrels earnings 16 or 17 , as well. They pay a nice 2. 85 dividend. Theyve got t rocking chairs on the front porch, thats what i like. Caseys General Stores fill up buy the food. Talk about caseys quickly and how you stay thin if you eat at all these places. Well tyler, caseys is a great business they own all their real estate under those 1,850 stores as gas prices are down people have more money to go in and buy. We may not stay thin but we think caseys margins will stay fat, very very well run business theyll grow their store base 100 stores a year and all three companies will remain core holdings. Theyll grow 15 a year and we like them all. All right, gary thanks so much for joining us. Gary brad sh. Coming up investment slam dunk the venture capitalist seeing big returns on the swish, uber is reportedly seeking a 1 billion credit line from banks. The Ride Sharing Company has contacted a number of banks asking them what terms they would offer. The move could signal an eventual initial public offering. Facebook one of the biggest employers in Silicon Valley made a big investment in a new building. The goal is in part to top retail talent to attract them and its new home stands in stark contrast to the college dorm where the company was actually created. Julia borston takes us inside facebooks with facebook just passing the 10,000 employee mark and with apple stealing the design headlines with its new spaceship shaped headquarters Mark Zuckerberg needed the new building. He partnered with frank gary best known for sculptural structures to design mpk20 for menlo Park Building number 20. The goal to be ecofriendly and reflect facebooks mission to connect people. Gary created the largest open floor plan in the world and facebook commissioned local artists to decorate it. The 430,000squarefoot space fits 2,800 employees. Zuckerberg usually works right in the middle. Despite the very open floor size sort of broken out into neighborhoods and communities with walkways that go down each side and throw and around and throughout so you really cant walk through the space without bumping into people. Its a massive space with lots of Natural Light but the biggest draw may be the roof. This nineacre green roof has 400 full grown trees and a half mile walking loop also designed to inflate the building below us to cut down on heating and cooling costs. Plus there are wifi and plenty of places to sit and work. As facebook looks for the best talent goler says facebooks investment says it prioritizes employees. It really creates an environment where people can collaborate, they can kind of innovate together a lot of spontaneity in the way people bump into each other. Just a great, fun, collaborative, creative space. Facebook wont say how much the building cost just that it came in under budget and faster expected built in 18 months. For nightly business repor menlo park california. A top venture capitalist is also a prominent coowner of an nba team not just any team but the one with the best record in the league this year the Golden State Warriors and his investment on the court is paying off handsomely. More now fro there goes curry. Curry fakes, puts it up. The Golden State Warriors are on a roll. The team is back in the western conference finals for the First Time Since 1976. Thats good news for the players, fans and the owners. Joe lacob, a long time venture capitalist with Kleiner Perkins bought the team in 2010 for 450 million. Now its worth more than 1 bi we make our run right now. Lets go. Lacob says building an nba power house isnt all that different from creating a successful start up. It comes down to one thing. The people the people the people. Thats what matters. You have to have great management and the management have to hire great people underneath them and build a team and organization and culture. Yes, the specifics of how you turn your organization around are important, but actually its the people that do it. Lacob isnt the only professional investor and tech veteran who owns an nba team. Theres mark cuban, paul allen, and steve ballmer, b lacob has a message for ballmer, running an nba team is a lot harder than it looks. Ballmer was at microsoft for a lot of years. I think hell find this to be more challenging than he thinks. Its not easy. This is a very complicated, though not the largest business maybe some of us have been associated with its very very complicated in terms of the media, the sales aspect in terms of you know so many things the basketball side. Its really a multidisciplinary type of activity. Harden tied up knocked loose, and the game is over go state hangs on lacob says he doesnt care about the teams evaluation what he does care about deeply is winning championships. Game three with houston is tomorrow night. For nightly business rep im josh liptonn good luck to everybody in that. All right. Thrilling game. Thats nightly business for tonight, im sue herera. Thanks for joining us. And im tyler mathisen. Please enjoy the Holiday Weekend and join us for a special edition of ni its all right, its okay doesnt really matter if youre old and gray its all right, i say, its okay listen to what i say its all right, doing fine provideress story i say, its okay getting to the end of the day so whats his name . Dan griffin. No, never heard of him. Wheres he from . Near london somewhere. Near london . Sussex. No, surrey. How old is he . Uh, 52. 52 . Yeah, hes only just retired but hes been with the met 30 years. I like him. You like marmite. I like marmite. But why are we meeting him in soho