the humira pipeline, adding to things. it's a hated name by mutual and hedge funds. hedge funds are shorting this. >> j snrvegs >> amd. i should probably sell, but i'm not. >> up 8%. that does it for us. see you on "closing bell." "the exchange" is now. ♪ ♪ >> thank you very much, scott. and welcome to "the exchange." i'm kelly evans. here's what's ahead. bond yields have dropped sharply in recent weeks, but our guest says not so fast. he thinks the ten-year is headed back over 5% next year and is in the no lending camp on the economy. we'll debate. airline stocks rebounding today, but it's been a disappointing few months for many of them. yet one supplier is hitting its highest levels of the year. that ceo joins us. there are two housing stocks our analyst says are especially well positioned into the new

year, and he's got the names and how much upside he sees ahead. before that, let's start with the markets. dom chu has the momentum and what do you you make of it all? >> it's been in certain parts of the market, specifically within technology stocks. that's the reason why you have the nasdaq composite, the large-cap names, doing a lot of the heavy lifting. it's green across the screen right now, but it wasn't like that this morning. it was a mixed trade. as things stand, the nasdaq is up nearly 200 points. 1 1/3% gains. the dow industrials, only up one quarter of 1%, 36,146. and the s&p 500, that broader measure, 4585 is the last trade, up 36, 37 points. this, by the way, would represent just around session highs at this point. at the highs of the session just about up 37, do the downside, 16

points. we'll keep an eye on that. oil prices also trying to find some positivity right now, trying to work off a six-day losing streak. just about flat on the session, below $70 a barrel for u.s. benchmark west texas intermediate. $65.35. the level a lot of folks are watching right now atur$78. that mark is where the long-term 200-day moving average is. it was supply concerns for gasoline yesterday that drove a good amount of the downside, trying to find some bit of stability. and kelly mentioned the airline stocks. let me show you just how strong they are today. they're among some of the biggest gainers overall on the market. jetblue up 13%. they updated their fourth quarter and full-year sales growth guidance better than it was prior, and so that's helping that particular move. by the way, they're saying holiday travel trends, better than they thought they were

going to be. southwest air, delta airlines, american airlined, among the stocks catching up. kelly, i know you're going to be talking much more about that aircraft trade later on in the show. >> indeed. dom, thank you very much. our dominic chu. well, has the drop in yields gone too far too fast? the ten-year yield is down nearly a full percentage point since hitting a 16-year high. the tlt treasury bonding etf has surged 16%, and november's 9.5% gain is the best month since the start of the pandemic. the etf with back-to-back positive months, but have investors gotten carried away with fed rate cuts. steve liesman is here. steve? >> just weeks after that ten-year hit 5%, markets worried could the government fund the deficit. yields have fallen in one has been the biggest bond boom of the year, the opposite of

several years ago. 37 of those 87, they have come just since thanksgiving, which wasn't that long ago. what's at play here? better inflation data, including that decline in oil. repricing of the fed and fed rate cuts. hedge funds covering shortages, they were wrong. then pension funds and insurance companies come in to lock in those locker rates, driven in part by the growing belief the fed is done hiking and is going to cut. in mid october, the market was priced for about 70 basis points of cuts next year. that's really doubled, with 134 basis points of cuts now built into the futures markets, beginning by the way as soon as the march meeting. rick mreeder tells me, i don't think the front end is over its skis. markets are going to watch a massive treasury auction next

week after poor auction results led to stock selloffs a few months ago. three and six-month wills, $13 billion. lower inflation, and a belief in deep rate cuts by the fed next year is going to comp fears about how the government funds the $33 trillion deficit. but tomorrow's job numbers, if it comes in strong, could challenge the rate cut hypothesis and enthusienthusias. some expect jay powell to push back on the rate cut pricing. >> so we have the bond auctions next week and we're going to hear from him, steve? >> all in one week. a jobs report tomorrow. so don't go anywhere, because you've got to keep cnbc on. you have jobs tomorrow, you've got three big bond auctions next week, and fed chair jay powell. and don't forget the cnbc survey

is on tuesday. >> steve, stay with us. one of my next guests warns that yields will shoot higher next year. joining me are my two guests. welcome to both of you. jim, tee things off with what was a consensus call maybe a month ago and is suddenly out of consensus, but you're sticking with this idea that bond yields could go higher. >> yeah, i've been that way for three years. i don't think that the move that we've had right now is over. i think we're in a multiyear bear market in bonds. it started in 2020. usually, you get a recession or a serious downturn in the economy because something breaks. either it's spiking crude oil prices or a pandemic or a financial crisis or something like that. this time around, everybody thinks the thing that's going to break the economy is high rates. but more and more, the evidence is high rates aren't a drag on

the economy, they're not helpful in some areas. but they are helpful in other areas because of interest income. i don't think it breaks it. i think what we're going to see for the economy for '24 is what we saw in '23. we'll churn out 2%, 2.5% quarters like we have been. i don't think inflation makes it all the way to 2%. we have strong nominal growth. i think that bond yields could probably see 5.5% somewhere in 2024. so the move down so far has been surprising and painful if you've been on the bear side like i have. but i think the broader trend is still higher for rates. >> nancy, it's one of these things with the macro, where you can only completely ignore it except for the extremes we have been through. even the bond move has been dizzying for investors. where does it leave you positioned for next year? >> i agree with jim's view for 2020. but now i'm drawing an analogy to the '90s when i was not only alive but managing other

people's money. and there's a lot of similarities. you don't really need to see rates go lower. we were at 5% to 8% on the ten-year during the entire decade. we don't need to see inflation go back to 2%. and i don't think it will. we were at 3%. there was an inverted yield kufb, a soft landing, a car, recession. everything that you needed. and one of the most important things was the vix stayed under 18 for most of the decade, while the stock market roared. so i think we're slowing. i don't know that we're going to get a recession, but i want to own those reliable growers going into a slowing economic environment. >> i was reading some trader commentary this morning. the tech traders had their head in their hands. maybe today is a different story, but we haven't seen the performance from the mag seven that we were able to rely on. does that affect you that much, or is that -- stop take it as a healthy sign into next year. >> i think it's both. you want to use the recent weakness, and if we get further

weakness to add to those names. the generative ai, i just gave a relate presenttation on the 4th. we have to be diversified. so i think our theme is old economy economies that are embracing the digital revolution, and then the suppliers of the tools you need. >> but you're sticking with microsoft and broadcom, names like that? >> well, broadcom is reporting today, so i'm going to hedge myself. if it goes up, it's one of our largest holdings. if it goes down, you want to buy more. it's the poor man's nvidia. >> jim, let me turn back to this discussion about bond yields. one of the things you described is that you're in this no-landino-land ing camp. certainly the recession never game. we do have this rise in the unemployment rate, but if

tomorrow is yale really strong,e that goes away. how important is it that we have an expanding economy to get bonds behaving like you describe? >> well, i think that's central to the whole argument here is that the no-landing camp is just an expansion. we just continue to expand on the economy. it's not the soft landing camp i've been critical of soft landings, because i don't know what exactly it means. you can actually argue we've never had one, a soft landing. so if the -- if labor continues to show the strength that it has, 220,000 initial claims today, it's historically a very low number. we're still under 4% on the unemployment rate. then i think it really does auger this argument that the labor market is healthy. i think a lot of employees feel good about the labor market. that's why we have seen labor hoarding and a lot of turnover. the puts rate is still very elevated from where it was

prepandemic, meaning people are willing to quit their job because they're comfortable they're going to get employed. and they keep spending. so i know we have always focused on excess savings. but it's more about labor confidence that's got the spending going, and that's why the economy confounds everybody by never quite making it to a recession. even though it kind of bounces around. >> so i agree with a lot of what jim has said, and i think jim is bringing a sort of economic view to the discussion that sorely is lacking among many people, which is that hey, if the government is going to spend all this money on debt, it's going to be giving that money to somebody, and that gets back into the economy. the other thing that jim does well is this notion that everybody has been focused on the savings thing, and nobody has been focused on the idea that so many people are employed and bringing home paychecks as central to the outcome. the only thing i would push back on, jim, when i think about 5.5% on the ten-year, maybe you're

just saying it gets there. if we end up being in an environment of say steady inflation in the 2% to 2.5%, not 100% sure why you would have long bonds at 5.5%. maybe that's a long-term cost of funds or real rate. are you saying, jim, i guess my question is, that there's still an issue with the government funding this e authonormous amo debt which investors are requiring a premium to fund it? >> a little of all the above. i think we will be at 2% real growth continuing into '24. i'm a little more hawkish on inflation. i think the bottom on inflation is around 3%. add those together and you're a little above 5%. that's nominal gdp growth, inflation plus real. typically, interest rates should trade around the nominal gdp

level. and yes, i'm going to put a little bit of a premium on it, because of the amount of funding we have to do. that's how i arrive at 5.5%. if the economy is weaker than i think, if inflation is weaker than i think, or the budget deficit or tax receipts come in stronger, i'll adjust it along the way. right now i feel very confident in that note. >> quickly, jim, we talk to you about your equity calls, but you are constructive on the economy. does that leave you bullish on stocks? >> to a point. and the point is, i think people have to recognize, dr. jeremy siegel wrote a stock "stocks are long run" and put out a new e digsz t -- edition this year. if i can get 5% in a money market fund, i'm getting 2/3 of the stock market with no market risk. what will it take to take that final leap for the time third? this is far different from 2019 when i was getting zero in a money market fund. the competition of higher rates is going to continue to be a

problem for the stock market. that's why i'm in favor of stock picking. that's coming back into vogue now. peter lynch can come out of retirement, because we're not longer going to picking etfs. >> we've so often heard it's going to be the year that that matters. nancy, you get the last word. >> the job market has started to show weakness, but the consumer is strong because most people are working. the baby boomer generation has half of the nation's net worth. they are still spending. that said, we are seeing some cracks in labor. i think we're going to continue to see industrials kind of bottom out here with the pmis. and then you have an opportunity for really strong markets. so i would disagree with jim on that. i think you want to own stocks here, even with a 5% money market rate. >> or even with cracks in the economy that you describe, isn't

it time to be cautious? >> it is, but everything about this whole cycle has been different. so we are working off of the pandemic excesses, and i think you have to step back and it is a stock picker's market for sure, which is why you want to be focused on technology. i think you want to own industrials overweight, because they tend to do well as the pmis are bottoming. and then you have to pick great names within each of the other sectors. we're buying companies that are using dijgitization to improve markets. so that's where we're making our bets. >> mcdonald's, domino's, these are examples of the ones trying to adopt it. thank you all today. we appreciate it. now to the labor market on the eve of tomorrow's big jobs report. we learned this morning new jobless claims are at levels consistent with a strong level. the four-week moving average is at the highest level in two years but retreated somewhat last week. is the labor market still going

strong? let's ask recruiter.com chairman evan sohn. in some ways, the trend from a 30,000 foot point of view, the labor market is slowing, but it's not slowing enough that it's making that much of a difference right now. >> yeah, well, good to see you again. look, i think the segment you just had talked about candidate sentiment. we saw the same thing. for the second month in a row, the candidate sentiment increased to 3.5. so a year ago it was at 3.7. so that means that candidates are feeling okay leaving one job for another. at the same time, recruiter sentiment is down to 2.7 out of 5, a low on the recruiter sentiment, as sort of this leading indicator for where things are actually happening. we also saw from the report 8% fewer job openings. so there's more volume, as you just showed for the fewers jobs, with less compensation. compensation is not increasing

as much as it was a year ago. so it's making the recruiters, their sentiment be at an all-time low relative to the overall year. as you just said in the last segment, you are seeing a consistent put rate higher than prepandemic levels, and a higher rate that is also consistent. >> interesting. so this is a bit of a divergence, or something new. recruiter sentiment, lowest of the year, 2.7 out of 5. a serious decrease in open jobs driving an increase in application volume. so more work for fewer open jobs. and interestingly, only 11% of them saw an increase in compensation. >> that's right. so this date -- the days of hire at any cost and get people to fill the seats, that's over. as we just learned, candidates are still comfortable leaving their jobs. so they're comfortable they can find a job, more comfortable than they were in the past, but at less of a compensation level. >> yeah. what does this point to you

then, the kind of -- the pain tree tomorrow is a strong number, that up ends what's been going on with bonds, sends yields higher, but if we stay on trend, the trend is that we've been slowing. >> that's correct. and you look at in the report, we talked about this last month, the report on job trends. you know, the top industries were actually staffing and recruiting. so that's a good sign for the future. when companies start hiring more recruiters, they're looking for the future. when you see downturns in other sectors like computer and in the software side. and i saw you talked about ai in the last session also. obviously, health care is always been a very strong sector, as well. we saw a 70% increase, almost 70% increase in ai related jobs and the financial sector. month over month. so more jobs in the financial sector, looking at ai. that's not just customer support, but it's customer support, analysis, regulations,

across an entire services portfolio. i might be pointing to, as we talked about this rolling layoff side, these rolling layoffs, financial services might see more of those sometime in '24 as the benefits of ai affect the overall labor market, lowering x, as well. >> we'll hear a lot more about that, i imagine. evan, thank you for your time. we appreciate it. >> thanks so much, kelly. coming up, airline stocks had a mixed few quarters, but there's one quarter uniquely positioned to take advantage of the rebound in air travel. and the stock is flying at an all-time high. the ceo of air cap joins us next. and home for the holidays and the street's number one building analyst says one very specific set of stocks are best positioned into 2024. and he is here to make his case.

the markets are near session highs. the dow up 90. the s&p up three quarters of a percent. and the nasdaq up 1.3% today. ten-year yield right around 4.11. back after this. ♪ you were always so dedicated... ♪ we worked hard to build up the shop,

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welcome back to "the exchange." as airlines try to add capacity to keep up with demands, air leasing company air cap is positioned to take advantage of the rebound in travel and the lack of aircraft supply. and it's pushing the stock toward a new all-time high. phil lebeau joins us with the ceo, gus kelly. >> gus, i appreciate you joining us today. i'm curious, you heard kelly said up there, and you're seeing what's happening in terms of demand around the world. what is your take as you look into 2024, especially when it comes to international travel? >> phil, it's good to be on. it's pretty robust all around the world. when it comes to international traffic out of the u.s., the biggest market in the world, the most lucrative, is the north atlantic market. that's still booming. we don't see that changing. but phil, a real driver of airline profitability for the medium term is going to be the supply environment. the worst enemy of the airlines

is too many seats chasing too few passengers. and so as long as we have more passengers than we have seats, things are going to be fine. and the issues that the industry faces, because of the production problems with boeing, with airbus, and then the genreability of the airplanes when they get into service is the, in my view, going to result in supply shortages for the rest of the decade. >> you think the rest of this decade we see a supply shortage, even as we start to see an increase in production from boeing and from airbus? >> well, phil, they will produce more aircraft. now, since 2018, if you just took 2018 as the regular way of production for boeing and airbus, we're almost 3,000 aircraft light of that over what they have managed to produce in the five years. if they had kept 2018 production

levels throughout the last five years, there would be 3,000 more aircraft in the world. bear in mind, boeing and airbus will only make about the 1200 aircraft a year. so even when they do get back to those levels of product shun, the challenge that faces the industry is the technology of these aircraft. the aircraft and the engines just do not -- >> are you comfortable with that? >> say that again, phil. >> i'm sorry to interrupt you. but are you comfortable with that echnology, but even as you see advancements in fuel efficiency and lower emissions, the technology is just not developing fast enough? >> it's not durable enough, phil. it will get better, but the problem is, when the engines come off the wing faster than anyone expected, the network isn't there to repair these engines, the parts aren't there, the spare engines aren't there. so historically, you might have needed ten aircraft to fly a certain route.

now you need 11. in air cap's position, we are the largest owner of aircraft this the world by a country mile to be honest. we're the largest owner of spare engines in the world, and we have seen significant increases in aircraft values, lease rates, and the way the airlines are reacting, phil, is what they're doing is saying to me, we need to hold onto these older aircraft for much longer than we ever thought, because we cannot rely on the durability of the new technology assets, and it's going to be a long time before boeing and airbus get back to the levels of production they want. so we see that lasting, as i said, for the best part of the rest of this decade. that's fascinating, gus. if i can just ask one question, maybe it's relevant or not, but we are in the middle of finding out what's going to happen with the jetblue/spirit merger, hawaiian and alaska. do you have a take on the consolidation? does it overall lead to more

demand for lplanes or less? >> yeah, i don't think it will move demand for aircraft much. but i think it will make the airlines stronger. airlines are so capital intensive, such massive operating leverage. the scale is vital. and if your subscale airlines, it's hard to compete with the really big players in the industry. so that would be what i would say more, kelly, is i think the benefits of the merger are that there is more staying power, there's airlines that can compete with the four incumbents here in the u.s. market at any rate. >> gus, i'm curious from your perspective and what you're hearing from customers when it comes to the pratton whitney engine issues, as they try to work through that, a number of these engines have come off the plane, they have to be repaired. but it a e's going to take some

time. how much is that impacting your customers in terms of their networks and operations? >> phil, there are significant impacts. first of all, you're going to have a lot of aircraft on the ground next year. these are expensive machines. $60 million machines, pilot costs, a lot of fixed costs in the airline around those aircraft, and they're not going to get delivery of the ones they expected to get. but from our perspective, what we see, the real solution here is that pratt whitney, they will fix this issue, but it will take a long time. it's going to be a bumpy ride. so what needs to happen for the airlines in the next few years is that airbus and pratt and whitney have to sate down and say we are just not going to be able to deliver as many airplanes as you want. that just isn't going to happen. the airlines don't need another aircraft. if they have a $60 million machine sitting on the runway

because the engine doesn't work, what they need is a spare engine. they need the engine that's on the wing repaired. all of this will get done in time, phil. and everybody in the industry is just a step back, be it the owners of the aircraft like air cap, the manufacturers like airbus, the airlines and the engine guys and say, what's best for the long-term health of our customers? that's going to require airbus and pratt to sit down and say, we need to come to an arrangement where we can manage the situation for our customers. because just telling the customer you have to buy another $60 million aircraft, another one, another one, it's not going to end well for the customers. that's the biggest challenge over the course of the next few years. pratt will get there, but it will take a long time. it will take a year just to repair one of these engines. so that means that the aircraft is on the ground for a very long time. unless they can get access to spare engines or parts. we're doing our best to help.

we're ex-pending aircraft with airlines, selling aircraft to airlines. just this year alone, we will probably buy, sell, or lease a thousand aircraft engines and helicopters, and boeing and airbus -- airbus only produced 700. so that gives you an idea of the level of insight we have as to what's happening every day in the global industry. >> gus, i hate to cut you off, but i'm being told we're being pushed up against a break. we'll be watching this next year and talk more. gus kelly, the ceo of air cap. appreciate you joining us today for some perspective on what's happening with commercial airplanes. kelly, back to you. >> that was fascinating. come back any time. super interesting to hear his candid take on what's going on with the engine problems and more. we appreciate it. coming up, this retailer is having an unbelievable three-week streak with only one down day. the ceo taking the page out of bob iger's playbook, returning to the company of retiring.

though they face growing competition from china, if you think you know this one, tweet me. we'll reveal it after the break. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights.

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♪i screened with cologuard and did it my way.♪ cologuard is a one-of-a-kind way to screen for colon cancer that's effective and non-invasive. it's for people 45 plus at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪i did it my way!♪ welcome back. it's time for show and tell where we show you a chart and tell you the story. dollar general moving fractionally lower, after reiterating its full-year guidance. shares are up 15% in the past three weeks with only one down day. here's what todd bezos, who just returned as ceo, said on the earnings call about the state of the consumer. >> our customer continues to tell us they are feeling

significant pressure on their spending, which is supported by what we see in their behavior. based on these trends, and what we see in the macro economic environment, we anticipate customer spending may continue to be constrained as we head into 2024. especially in discretionary categories. >> and those macro pressures aren't the only things investors are worried about. new data shows a surge in sales of chinese giants is creating some welcome havoc in the air cargo market. fully loaded planes means more competition for dollar general in an already tight retail environment. let's get to tyler mathisen for the cnbc news update. >> thank you very much. donald trump is appealing a judge's ruling that he said he is not immune from criminal prosecution in his d.c. election obstruction case. trump's legal team argues that the former president cannot face criminal charges because his actions fell under presidential duties. the appeal contends the federal

criminal case should end all together, and that upcoming deadline should be delayed, including the march 4 trial date. georgia's state lawmakers gave final passage to a redrawn congressional map and are sending it to a judge for approval. the new version adds the black majority district but maintains a 9-5 edge for republicans in the state. the map is expected to be signed by the governor, but is likely to end up right back in federal court. meantime, opposition activists in russia are putting up billboards urging sit citizens to vote against vladamir putin next year. it is described with a qr code that leads to a website called russia without putin. kelly, back to you. see you in a little bit.

>> tyler, thank you so much. coming up, we'll check on the home builders. you can see the home construction etf has been pushed to an all-time high. more details after this. - "best thing i've ever done." that's what freddie told me. - it was the best thing i've ever done, and- - really? - yes, without a doubt! - i don't have any anxiety about money anymore. - great people. different people, that's for sure, and all of them had different reasons for getting a reverse mortgage, but you know what, they all felt the same about two things: they all loved their home, and they all wanted to stay in that home.

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welcome back to "the exchange." the home construction etf, itb, is up again today after hitting an all-time high yesterday. the ceo of toll brothers taking a bow on behalf of all the builders for having navigated a difficult housing environment on cnbc earlier today. >> it's interesting. it should be looked at hard for a rerating. these companies are structurally run differently. for us to have the business we're having in the face of these rates, i'm just super proud of not just toll brothers but of how this group is now being run. we just deserve more respect. >> my next guest agrees. in fact, he was early to call that this would happen. he just raised his price target on several builder stocks.

let's bring in steven king. great to see you again. welcome back. >> thank you very much for having me. >> by the way, just going to throw this out there, is that a deserved bow or are we going to look back on this as a sign of the times and go, well, the building trade was about to implode, and, you know, we all should have seen it coming and that kind of thing? >> you know, i think that this idea that the builders are going to implode is something that actually has provided the wall of worry for them to climb over the last really, you know, several years. since the pandemic hit, people are wrongly thinking that the housing market was going to suffer. and then when it subsequently roared, people said well, it's got to be the rates. when the rates surged to a level that we really probably nobody expected, you know, two years ago, people were convinced the housing stocks and the housing market in general was going to collapse. and that really hasn't happened

at all. so now we're in a very interesting phase where people are beginning to say, why not? why have things happened the way they have? why have the builders proven to be so resilient? people want to know. and the investment community is very honest, you know, they don't care about yesterday. they care about being right tomorrow. and that, i think, is setting the stage for the revaluation that doug was referring to just now. >> and a few of the investors who dipped into this space last year when the multiples were at four and five and just very low levels are now thinking, maybe i can take some profits here. why do you think that could be too early or a mistake? >> well, there's a couple of numbers i throw at you. the small-cap home builders are trading at 1.15 of book value. book value is probably going to grow at least 15% this upcoming year, so effectively, they're trading at almost one times book value, you know, in a year from

now. that almost implies that the people think these companies might not even been around, you know, long-term. so really, really inexpensive valuations just on a book basis. on an earnings basis, they're in the high single digits. it's very hard to find companies that are -- solid companies trading at high single digit pes. we think that the stocks are going to ultimately trade at least to the low double digits on a pe basis. and we think a further evaluation even higher could be in the offing over the next few years. >> that's kind of what toll's ceo was referring to. they're still trading at seven times, and he's arguing we deserve a premium multiple for what's just happened. a couple of different questions here. one is, implicit in everything that you're talking about is this idea that everyone missed the fact that these are need-based buyers. so we're starting to hear people say well, but now rents are cheapening and that might drive -- might peel some people off. if these are need-based buyers,

i'm not so sure about that. and the only thing i wonder for next year, could a headwind for this space be a decline and the existing home sales inventory comes on the market as people feel like they can move again. >> i'm glad you set that question up. this is in our report something that we put right at the front. basically, these two questions, how can people be affording houses when affordability looks so bad? the answer is the buyer is not the same buyer. if you look at affordability only through the lens of the kinds of buyers that we historically saw, like in the late 20s, you would think nobody could afford it. but most of the first-time buyers are almost ten years older, not in their 20s. people in their late 30s have higher incomes, longer established credit histories, and they have more urgency. i think all of that is coming to bear here as to helping explain

why people are actually buying houses, even though theoretically, the affordability should be so bad. the second thing that you touched on is this question of what happen it is mortgage rates fall and all these people with low-rate mortgages say okay, i'll move. and then they have to list their home and they'll see this flood of inventory and then that will be baldd for the housing market. first of all, lower rates as we all know instingtively, low rates is good for builders. and to understand the explanation and this particular wrinkle, it's this point -- the number of new home sales that you make each year is not related to the number of resales. and it's not related to people moving. it's related to the number of new homeowners who have coming into the market. you've got to build a home for that person and you've got to sell it. if i told you next year that housing starts would be zero, you would know for certain that new home sales would be zero.

but existing home sales could be any number. you could have any number of people moving next year, selling houses to each other. but if housing starts at zero, new home sales will be zero. so existing home sales and new home sales are not the same thing. so you should not be worried if next year more people decide to move, you're not going to sell fewer new home sales, and it's not going to be bad for the builders. in instinctively we know that. >> real quickly, and probably most to the point, but just in two second it is you can, what are the names you're most bullish on this the space? >> i think the builders have the clearest path near term to upside, along with top build, and ibp, the installation installers. i think the builders have the clearest path upwards, because they're trading on book value, and that's going to go up. the second thing i would say is within the builders, i think the larger cap names, particularly like a drhorton are most apt to

get a rerating. i think horton has been at it the largest, lthey need market cap. they need liquidity. horton will give it to you. lennar will give it to you. those names will probably revalue first. >> that is a great point about the institutional demand. it's up 50% this year. steven, thank you for joining us. appreciate it. coming up, shares of alphabet having their best day since july, they're only up 5% right now. all of this after yesterday's ai announcements. we'll look at what has investors so excited when we ce ckomba in a moment. dow up session highs, as well. like your workplace benefits... and retirement savings. with voya, considering all your financial choices together... can help you be better prepared for unexpected events. voya. well planned. well invested. well protected.

welcome back. shares of alphabet now up 5% today, having a delayed reaction to the launch of their gemini ai model yesterday. let's get out to diedra bosa. come on, in this day and age, 24 hours, we talked about this yesterday. you showed us the tape. >> yes. >> here we are 24 hours later.

>> i know, i could barely believe my eyes yesterday, after watching that six-minute video. i thought this is amazing, why isn't the market recognizing this? it was just delayed. the stock didn't do anything yesterday, but it was up today up 6% for a very, very cap com. a very strong reaction. that maybe tells us that the a.i. halo is still very much present, which we started to -- yesterday, and that google now has an edge in this a.i. arms race we've been watching all year. what kelly said, you really have to see and hear geminis technology at the latest developments in generative a.i. to understand the impact it could have. i am bringing you another example from michael presentation. have a look. >> i know what you are doing. you are playing rock, paper, scissors. >> what do you see now? >> the fingers are spread out to look like the wings of a butterfly. >> what is this?

>> big ear and barking mouth. a dog. >> >> reporter: if that did not amaze you, here's one more example. >> what movie are they acting out here? >> i think they are acting out the famous bullet time scene from the matrix. >> reporter: i highly recommend the entire sixth -- six minute video. other examples include geminis understanding colors, 3d objects, it creates games and even cracks jokes. the word to describe this next evolution in a.i. is multi modal. that means it incorporates audio, video, images, and you will hear that word a lot more, kelly. so i'm keeping it short and simple hoping the video speaks for itself. again, maybe part of the reason it was more subdued yesterday is that this is being rolled out in phases. it does kind of feel like it was rushed. google rarely has events between thanksgiving and christmas. the final version won't be available widely until next

year. but some pretty interesting demonstration. >> maybe if we wait a day the shares will be down. >> yeah, that too. >> not yet. deidre, thanks for now. we appreciate it. our deirdre bosa of west. still three more names on tech with earnings. my next guest says one of them is preparing for games post report based on a recent trend she has noticed. we have the trades for broad calm, lulu, and vail resorts after this.

welcome back. semis, sweats and snow are the subject of today's earnings exchange. miriam monte is here with our trades. she's -- welcome back to you. let's start with broadcom. feels like an audience favorite. coming of all-time highs near the end of november with that acquisition of -- closed. oppenheim or said the deal should had 15 billion dollars to top line growth with each year, along with a.i. and hardware partnerships with google. do you like the stop here? >> i do. first of all the, i have to say happy holidays to everybody. >> thank you. >> wishing everyone lightweight piece. now, as to broadcom, the stock is performed very well. it is up 45% over the last two years. what amd had to say yesterday about a.i. and cloud computing

is only positive for broadcom. we expect those synergies coming out of the -- wear acquisition will be very powerful. expect management to talk about them today and those numbers around that. we still think there's upside. 2% dividend yield. >> let's move on to lululemon. off that -- just off that 52 week high. seeing growth in china, vincent promotional activities, should combat some softness in the luxury space and aspirational space. would you stick with this one? >> i would. they had about 12% same sort -- store sales growth last quarter. compare that to minus five plus percent out of target. and we think that it is strongly driven by china where sales were up 60% last quarter. we think there has been some excelling in the month of november and we think the stock

will pop on today's report. >> all right. going ahead with a bold call on earnings. love it. vail resorts is our last one. down for the year. -- pointing to their epic pass program at new acquisitions as a potential catalyst. supply constrained witness -- they also think skiers far recession -- recession resilient. do you agree? >> i'm not so sure about recession resilient. that is like being a little [inaudible] but talk about the sales of preseason sales, that is passes and annual passes. those were very strong. they were up about 11% in dollars. you also see a 15 to 20% increase in seats from airlines going to their properties. combine that with an favorable weather conditions last year, and you've got a few tailwinds going on right here. -- mark it and other efficiencies. and there's a front range passenger rail that just got approval from the federal

government that should help bring people over the longer term. we have not been buyers of this. it has been a pretty bad performer in recent months, but we are interested in [inaudible] results today. with a 3.85% dividend yield, i think it's worth watching. >> in eight bullish mood today. , mariann, think you so much for. time mariann mtae. ongnthat's it for the exchange, everybody. the power lunch is next. what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul. it's your water, your way.

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welcome and good afternoon, everybody. welcome to power lunch. alongside kelly evans, i am tyler mathisen. coming up, we are getting ready for the jobs report tomorrow. some signs this week that the jobs market may be starting to cool just a bit. so what to expect tomorrow and what it could mean for the markets, kelly? plus, some big ceos on cnbc in the past 24 hours. we will hear highlights from