Waiting for Yellen Q&A, but QE helping elsewhere

The major powers seem to be giving positive signals to the Greek package of economic reforms submitted last night. Greek bond yields are down for a fifth consecutive day, and the Greek stock market is up 8 percent to its highest level since early December.

With Janet Yellen testifying in the Senate at 10 a.m. EDT, the market is obsessed with gauging her intent on raising rates this year. My own feeling is Yellen will do very little to show her hand, and will instead reiterate that the Fed remains "data dependent."

All indications are that Yellen learned her lesson about making future predictions with the now-famous "six months" comment she made during her first press conference in March of last year, when she said the Fed would start raising short-term rates about six months after they end their stimulus program.

Read MoreJust in time! Greece submits reform proposals

More than likely any fireworks will come from Chairman Richard Shelby's well-known dislike of the Fed, quantitative easing, and even Yellen herself (he voted against her), as well as those supporting the current version of the "audit the Fed" bill.

Speaking of QE, it certainly seems to be helping the stock markets of those countries where central banks are employing it.

World Stock Markets YTD:

  • France: up 13.6 percent
  • Germany: up 13.4 percent
  • Nikkei: up 6.7 percent
  • FTSE: up 5.5 percent
  • S&P 500: up 2.6 percent

Probably not a coincidence that both the European Central Bank and the Bank of Japan are engaged in QE programs, while the U.S. has wound down its program.


1) The high end of the home building business is doing really well. Toll Brothers reported a strong beat on the top and bottom line, and surprised to the upside on all metrics. The results were driven by an average selling price of $782,000, well above guidance of $710,000 to $760,000. A higher gross margin of 24 percent also helped.

Orders were up 16 percent. Even better, orders for this quarter (Q1) were up 13 percent so far.

Toll's expected average price in 2015 is $725,000 to $760,00, well above the nationwide average.

Read More Home prices rise faster than expected in December

Speaking of building, home building may be a bit spotty ex-Toll, but remodeling is still going strong. Home Depot had a great quarter, with a big beat on the top and bottom line, comparable store sales up 7.9 percent, U.S. stores sales up 8.9 percent, and a 26-percent increase in the quarterly dividend to $0.59.

Macy's in line, but the guidance of comparable sales growth of two percent for 2015, guidance of $4.70 to $4.80, a bit below the current consensus of $4.84. This is a bit of a disappointment, since Macy's was growing faster than its competitors, and two percent growth is definitely a bit slower than expected.

2) How lousy is the stock business? Pretty lousy. Stifel Financial bought Sterne Agee for $150 million, excluding expenses. Here's what Stifel got, according to Susquehanna:

  1. the retail brokerage business, which is 730 advisers, $20 billion of assets under management, and $175 million of revenues;
  2. the fixed income capital market business, which has $130 million in revenues; and
  3. the trust and clearing business.

Read More Stifel Financial buying rival Sterne Agee in latest deal

Add up the retail brokerage and fixed income businesses, and you have north of $300 million in revenues. Stifel paid $150 million, so the purchase price is somewhere around 0.5 times revenue. Evercore estimates the acquired part of the business generates $33 million a year in net income, so assuming the deal at full costs is $191 million, that's a multiple of 6 times earnings.

For this, Stifel gets an excellent Global Wealth Management platform that it can graft onto its existing platform, and a fixed income business. Cheap!

Stifel CEO Ron Kruszewski was on CNBC's "Squawk Box" this morning, looking very happy. He should be.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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