Targets chief Financial Officer. The cfo will be joining us in a power lunch exclusive to give us his financial forecast. We begin now with the health of the American House housing market, and new numbers on home sales as we begin to gear up for that spring selling season. Fingers crossed it comes. Youve got dr horton and toll. All moving to the down side. Lets get to diana who is live in washington. Hi diana. Hi mandy. After a disappointing report on january sales of existing home sales of newly built homes out today a bit more heartening but you have to keep them in perspective. Take a look. January sales came in at an annualized rate of 4,1,000. Thats flat from december but december had seen a huge 11 monthly jump, and we didnt give any of that back. Thats good. The 30year average for new home sales is over 700,000 a were. We still have a long way to go. Sales of new homes priced under 150,000 are onethird of what they were a year ago. That is why luxury home builder Toll Brothers is doing so very well beating the street in its Quarterly Earnings report where heed when asked on the analyst call that tried to push volume over price as some of the other builders are starting to do. The answer was pretty clear. Bob toll said thats not our game. Great for toll but heres a bit of a scary stat. Realtor. Com looked at 200 local housing markets and about onethird of them had no newly built homes for sale that were considered affordable by the markets median income. Zero none. Tyler. I have never seen this in ive heard fed chairs accused of being biassed towards capital. Maybe against workers, but not being a democrat or republican and favoring one side. I want to play you just one of the exchanges that happened today with congressman milvaney. If you are sticking your nose in places that you have no business to be you have no business in the longterm labor markets. To the extent you claim to be wanting to help fix income inequality and Wealth Distribution in this nation, in the view of many of us youre actually making it worse. She was accused of favoring one of the parties because she spoke about inequality two weeks before the election rsh here is Tea Party Member sean duffy in exchange for the fed chair. Was there one party that was pushing the whered of income inequality over the other party in the last election . Was one party pushing that idea over the other party . I have heard politicians on both sides of the aisle la meant rising income inequality. Had showed several documents there. Scott, our congressman, here in inglewood cliffs covering this area saying she met more with the white house or white house officials than she did with congressmen. Sfwroo i thought that part of the feds mandate was to Pay Attention to the labor market. You would think so and inequality, and, by the way, theres been a long tradition, tyler, of fed chairs or chairman before she. Talking about broader Economic Issues whether or not theyre within the direct perview of the federal reserve. Look, i think from a market standpoint what matters is whether or not theyve weakened the fed chair. Whether or not theres going to be any movement. I dont think so. I think this probably stops in the house and doesnt go any further and the senate. We didnt hear this kind of strong questioning yesterday in the senate. Steve, thank you very much. Steve liesman reporting. Lets go to sue herrera and breaking news. Fiveyear notes up for auction. Hi, sue. Hi, ty. As a matter of fact, it was 35 billion in fiveyear notes. The yield came in at 1. 480 . The bid to cover ratio was a little light. Thats the measure of demand for the issue. It came in at 2. 54 . The bid to cover the prior ten auctions is 2. 66 . It is a little below that. Indirect bids normally the average is about 53. 3 . This one came in higher. 60. 1 on indirect bids. Well watch Interest Rates for you postauction. Back to you. Indeed we will. Thank you for that sue. The markets are gradually edging higher now. Consumer discretionary stocks are taking the lead while utilities and techs are at the bottom. Lets bring in don, investment strategist and economist at Lpl Financial and mark tipper, Strategic Wealth partners. Mark. I look here in the united states. The markets are sitting around record highs. I look across the atlantic. You have a number of markets there at record highs. How do we get that next leg higher . Whats going to be the catalyst . Its going to be tough. When you look at u. S. Stocks in general right now, you know were very cautious over the course of the next three to six months. Much more constructive over the next six to 12. I think the next catalyst is really just money is going to continue to chase yield. Theres a complete lack of investment alternatives right now. You know unfortunately, valuations right now as they stand are at some pretty high levels with u. S. Stocks and i know valuations dont matter until they actually do but, you know, it really becomes an issue of what could potentially cause investors to balk at these current valuations that pull the markets back. Right. When you say, mark just to jump in there, when you say you are cautious over the next three to six months are you suggesting that we will get a pullback of some size before we sort of take a bit of a breather, digest, and then get the next leg higher, as you say, over the next 12 months. Over the nearterm down side risks are definitely elevated. We havent seen a 10 top to bottom correction since october of 2011. I mean this is the third longest market rally in the history of the stock market. The second longest rally ended october of 2007, and we all know what happened after that. Yeah. Were long overdue for a pullback. I dont know that were necessarily going to get one, but we are cautious right now. Theres a lot of potential issues that could cause a pullback in the near term but, again, over the next 12 months we are constructive. Hey, john you must be happy today because Consumer Discretionary is something you like very much, and its the leader right now on cheaper gas prices. You look it i believe. Just going between here and whats happening in europe for two seconds. Why do you not like europe even though you say the valuations are more attractive . Well europe is definitely stopped getting worse. Something cant get better until it stops getting worse. Then the last six months europe has definitely stopped getting worse. The ecb has done what it needed to do. Youre seeing some of the financial transmission mechanism in europe improve. Youre seeing some of the Economic Data be very lowered expectations. You are staying right here domestically at home. Apart from Consumer Discretionary, john, what else do you like . We like tech. S we like industrials. Were in a procyclical area. We think were still in the middle stages of the economic cycle. Maybe in the second half of the cycle rather than in the first half of the cycle, and then definitely in the second half of the cycle, the market favors Growth Stocks over value stocks. Since rates started to move back up, thats been more the market that we expect over the rest of the year. Okay. Well, well wait and see. Yellin has been dovish so far. Thank you very much to both of you for joining us. Also Energy Exposure is something that were keeping a very close eye on. For more on mark and john ass Energy Outlook and their plays, go to power lunch. Cnbc. Com. Ty. Mandy, winter storm reemas is about to wreak havoc kroots the south. Perhaps appropriately enough there. A wintry mix of cold snow and ice is forecast but much of the gulf coast and even up into virginia and d. C. Heres greg postel and the Weather Channel with the details. Big winter storms will move through the south during the early afternoon hours. Lots of snow in mississippi northern alabama, and north georgia. Atlanta on the edge. I think the heavy snow really targets Central North Carolina overnight tonight. Watch out Raleigh Durham charlotte, and even greensboro and then getting on into virginia as well overnight hours. Looks like heavy snoi is going to be moving into incorporates of southern virginia and norfolk, maybe even d. C. Guys. This is a winter storm that is going from the south all the way up through parts of the middle atlantic and northeast. How much are we going to get . A look at some of the numbers. We have five to eight in eastern arkansas. The biggest snow in north georgia will be in the mountains there just south of chattanooga, and then as you head towards north carolina, look at how much we got here for the central piedmont there near the Raleigh Durham area. Perhaps 8 to 12 inches there, and then maybe, maybe, in d. C. One to three. Largely staying south of say, trenton, new jersey and certainly new york city. Back to you. Thank you. The bankrupt billionaire, the judge, and the porsche. Chief International CorrespondentMichelle Caruso cabrera with more on the very bizarre story. It sounds like some kind of, like, i dont know, soap opera. Stroo yes. Flamboyant former brazilian billionaire batista lost 34 billion in a year. Now he is on trial, and his judge is driving one of his very expensive cars. Oh. Thats not fair. Sfroo how does that happen . Well explain next on power lunch. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call td ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need td ameritrade. You got this. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Shares of American Express up 1. 5 . The dow component says its hiking Interest Rates for many of its credit cards following a yearlong review process. The Company Spokeswoman says that rates of u. S. Consumer cars, many of which currently enjoy below market rates, will see some changes with this new move to the up side. Mandy, back over to you. Thank you very much dom. Well tjx, the Parent Company of marshalls and home goods, boosting pay for its u. S. Workers to 9 an hour. The move mirrors walmarts recent decision to increase its hourly wages. Apple, ordered pay more than 530 million in a patent trial involving its itunes software. Apple plans to appeal and target beating its earnings estimates despite taking a big financial hit from pulling out of canada. Chief Financial Officer will be joining us at a power lunch exclusive to discuss the retailers outlook, and that folks, will be in about 20 minutes time. All right. He was once brazils richest person by far, but his life has taken a complete uturn. Batista on trial for insider traced over the financial meltdown of his oil company. The judge now facing heat in this case as well. You two get to follow some weird stuff. Weird stuff happens overseas doesnt it . A brazilian newspaper, take a look at this has published photos showing the judge in the trial of former Oil Billionaire ike batista driving batistas porsche suv. The car was seized by authorities earlier this month to keep batista from selling or giving away his pricey assets. Here is the front page of the newspaper extra. Thats judge flavio behind the wheel of the Porsche Cayenne that can cost anywhere from 65,000 to 100,000. A newspaper called managed speak with the judge who told them the federal police did not have a safe place for the car. It was exposed to sun, rain possible damage. As i want the car to be as preserved in good condition, i took it to a covered space. I did not take it to use. Just to look after it. It is a normal situation. The car is one of nearly a dozen cars seized earlier this month on fears that batista was dumping his assets. The judge chose not to safeguard this lomborghini. Did he drive it around the house . I think he had an elevator that he could put it into. Dont quote me on that. He is accused of selling stock in his company when he learned that his oil rigs werent finding as much oil as he thought they were going to find. His net worth declined more than 30 billion in one year as his company went south. Wow. Ouch. You could make up a story like this, and people would say, no its too farfetched. Staying with brazil because the shares of petrolbras is down. Brazil on its own could be facing recession because they have so many issues but the situation with petrobras very significant because its stateowned by the government. Moodys cut them to junk and says its on standby in fact to do it again. The reason is the massive Corruption Scandal engulfing the company which means that petrobras still hasnt published audited financial from the last quarter. Heres why. It appears a huge percentage of the deals that this company did were padded with kickbacks. That means many of the assets on the books, likely overstated at a higher valuation than they actually deserved. We still dont know by how much. If the company doesnt report earnings by april 30th they trigger what they call covenanted. Think of them as clauses in the companys debts, which would put them in technical defaults and could force them to make massive debt payments. This is a process known as acceleration in the bond world. Its significant because this company has more debt than some countries. 170 billion worth. Important to know here. Both petrobras and ike batista have nearly the same Business Model. They borrowed a boatload of money, and they said dont worry, were about to pay it all back. Were going to find all this oil, and they didnt find that much oil. This is long before the price of oil declined et cetera. Is the Company Going to collapse . Sfroo wow. That is a good question. The state owns the majority of the shares right . I have said i think the shares could go to zero. People say no no the government will pour more money into it. They just dont know how big the hole is. They could start to face political constraints. I mean, if moodys is worried about the debt what should you think about the publicly traded stock . Right. The stock gets hammered, and brazil rules are a little bit different so you might have a little more protection, but generally speaking its very very bad. I believe that brazil has absolutely no plans at least currently to pour more capital in. Well just have to wait and see. Thank you so much michelle. Thank you. Plus coming up a power pitch pick me up. This startup recharges your brain with a drink that should help you think. An online drink brand using nir row tech to disrupt the 40 billion energy drink market. Will it quench this panels thirst . How are you tracking and communicating outcomes . How do you reconcile that with a product thats in a mysterious bag . Or leave a bad taste in their mouth . Stay tuned to find out. Corrects for lane drifting. And if necessary, it will even brake all by itself. 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Sounds great, but why do we think we have the answer . Because we can see the difference in the brain waves. Our ucla Neuroscience Team quantifies attention using wearable tech, and we formulated our drinks based on the biology of focus. We use active which are widely used in europe. We shipped over 10,000 boxes to members in over 50 countries. Our online partners include urban daddy, ah ha life and stack commerce. Were backed by the start Engine Accelerator Fund and currently raising around 500,000. With true brain our members are getting their work done faster and getting out of the office sooner. And welcome to todays power pitch. Im mandy drury. You just saw Chris Thompsons pitch. Now lets meet the panel. On set with us here is nikhil partner at vast ventures. Thats an early stage ven fewer fund which invests in consumer startups. His portfolio includes somo water, the First Sustainable water filter. Also with us is alicia founder and ceo of Pantegrion Capital group. Shes also a board member of new york angels. Joining us from San Francisco is rebecca kaden, a principal of maveron, a Venture Capital firm. The groups investments include ebay and groupon. Great to have you all with us today. Chris, are you in the hot seat. Would you like to throw out the first ques