stocks here? >> if you believe in mean reversion and want to go into the new year with an underperformer, that's the place. >> give me a name. >> paramount. >> zoom. >> coamerica. >> see you on "closing bell." "the exchange" begins right now. thank you very much, scott. welcome to "the exchange." i'm kelly evans. here's what's ahead this hour. the dow is at a record. the s&p and nasdaq are touching 52-week highs. yields are down to levels we haven't seen since the summer, but did the fed give wall street the all-clear? our economist isn't convinced. plus, the host heavily shorted s&p stocks are the same ones of double diblgits this month. and mortgage rates, while rents in one key market are falling for the first time in two years.

whether we're on the brink of a major turning point in real estate. let's get the latest on today's market action, an extraordinary two days here. bob? >> yes, the rally continues. and the breadth of the yrally i breathtaking. the s&p is having a nice day, up about half a percent. but the equal right s&p 500 is doing even better. this has been what's going on all week. there's that rsp there. that's a good way of indicating how broad the rally is. a lot of stocks are participating, because everything is equal weight in the s&p 500. we do have a new high on the dow industrials. nasdaq down, but also essentially a new high yesterday. 350 or so new highs at the nyc, 300 at the nasdaq, just all over the place. jpmorgan, boeing, apple, historic high. yesterday, home depot, goldman sachs also doing really well recently. intel all doing really well.

another example of how the market breadth is wide here. high beta stocks have been very hot this week. so there's the high beta index. these are stocks that move more than the market moves. so when the market starts moving quickly, momentum traders go into these stocks. if the s&p is up 1%, they would be up 2%. that's a lot of money all of a sudden. let me show you some examples. carnival, look at these moves up here. blackstone, broadcom, they tend to move more when the s&p is up, they're up even more. so you see the market momentum people coming in, in a very big way. the regional banks, just on fire this week. almost every one of the big regional banks are up in the mid teens. this is just today. yesterday, they were up the same thing, it doesn't matter, kelly,

it's been a remarkable week. >> bob, i was struck when you checked in with art cashen, he was still pretty bullish. >> yeah -- [ audio difficulties ] my next guest is also one of the most, if not the most bullish market strategists coming into this year. the s&p 500 is still going to finish about 200 points above his initial target, and he thinks the rally will continue into next year. his base case is 5100 by year end. bullish case takes us to 5500 next year for the s&p. joining me now is a chief global strategist at deutsche bank. welcome to you. >> thank you. >> let's rewind the clock for a minute, shall we? do we often find yourselves towards the top of the pack, or was a year ago a kind of aberration? >> i would say ago, we were at the top of the pack. by the middle of the year, we were in the middle of the pack. >> everyone else vaulted over you. >> right, right.

i would say, so far, the year's not over, there's still a couple of weeks. it tends to get a little slower. what we have seen, of course, is a very, very steep rally. so the counterpart of that is positioning has been rising. i would say almost vertically. which is not the healthiest sign. and so, yeah, it would be just a little bit careful here. but i think we had -- i would call it a game changer yesterday, because i think you have to keep the macro backdrop in mind for about five, six quarters now. the macro economic consensus has been strong. i would say almost unanimous view that growth was going to fall off a cliff. that obviously hasn't happened. and so that's the reason for why we got the rally, with a cloud of, you know, are we still going to go into a recession? i would say that remains as thick and loud as ever.

and so i think what yesterday does is it definitely reduces the probabilities that we, you know, that that downside scenario materializes. and so we should, you know, basically look for, you know, first maybe some upgrades to the macro consensus, maybe some taking off of the downside. and i would not really underestimate the power of that consensus, how strong it's been for how long it's been. i would argue it's permeating through everything investor perceptions. i would say growth has been pretty good, but perceptions have been very, very poor. >> yeah. >> i would say companies are, you know, concerned about getting in front of this huge, unanimous, strong view. so guidance is poor. i think so this does, you know, lift some of those clouds. i think it would be i did check

widespread euphoria. you know, you could wait for some course correction, but it's important to say that this year has played out contrary to how almost anyone thought. how did you get to that 4500 number a year ago? >> we were top down, and what i would say is the very early part of the rally was really, you know, a call for a positioning squeeze, and a positioning squeeze has not allowed investors who focused on the fundamentals of the market, but it was a call for a positioning squeeze on systematic strategies. vol was very elevated last year, courtesy of the same people that

gave us the vol yesterday. it's really a very volatile fed hiking cycle we had. if you look at systematic strategies on a z-score plus/minus one, they were at minus two. so the call was really that rates vol would come down. so to maintain vol, you need to sort of keep providing more and more shocks to the system. so we're going to do 25, maybe 3 50, 75. at some point, you have raised rates quite a lot. that's what happened. but after that comes -- so the first part was the squeeze, taking stock of the year that just went by. i would say then it's really about the fundamentals taking over, and i would say yes, we have this recession narrative on the macro. yes, it has not played out yet.

but if you look basically at earnings, earnings peaked the second quarter of last year, fell in the third and the fourth. that was very, very clear bottom. and earnings are up basically pretty strongly this year, i would say. the first nine months, you know, we've got 11.5% earnings growth. that's pretty good in nine months. >> let me ask you a business cycle question. >> sure. >>ympathetic to the arguments, but you look at the leading indicators, and we are at historic levels. continuing jobless claims are up year on year, the unemployment rate, we almost hit that half a percent mark. there's signs that you can't get much better than this, that the business cycle is peaking. i know this might not be the way you evaluate the market, but how long can we stay in a place like this, as we start to talk about how much further the rally can extend next year? >> you know, if you would allow

me, i would just change the question around a little bit and ask, you know, a rhetorical question. are we in '94 or in '99? i would say there's many more parallels with '94 and '95, so it is very possible for the cycle to go a very long ways from here. >> the interesting thing about that cycle and the soft landing we got back then is we never saw a real tightening of things. that they have happened, and that's happening now. so it feels like those things point you towards a different outcome. >> i would say it is and it isn't. if you look at the senior loan officer survey for the last quarter, it eased. if you look back basically, you know, it generally tends to peak in a recession. so the question is whether you want to believe the turn down,

and in the 2001 recession, you know, we went down. then we tightened again a little bit, but it marked the turning point in the end. so it may not be straight down, but it has improved, number one. number two, what i would say is, i actually don't pay -- i pay attention to the sleuths, but what the sleuths, why it got better, they're pretty strongly positive liquorlated. and so, you if growth picks up from here and this goes back to my first point, you know, if the fed is not going to be hiking aggressively, and maybe even easing, you know, i'm a little cautious there, because we are talking about six months from now. >> sure. >> and then we just had two rather large changes, one in two weeks, and one in three months. so i would be a little hesitant

to talk six months out. we can talk about it, of course. >> there's like ten more things i would love to ask you, but i'll stick with this one. this was the year the magnificent seven got their name early. do you make a call so specific as to say whether that market leadership can continue, or do you talk about kind of different leadership areas? i'm curious what you would make of the people trying to get a little more tactical. >> i would say two things. obviously, a lot of people say the rally has been very thin and narrow. keep in mind that basically a, you know, when you have a change, it's important to evaluate where you're coming from. if we were in a happy equal lib breeium and all was well with the world, and then only seven stocks rally, then i would worry about it. if you look last year, that's where the selloff was. so why would want expect everyone else to rally when they

didn't fall that much? so that's the first point. the second point i would make is that we are, you know, so we had the big move up in january. we then, you know, it moved into sort of the fundamental turn around in the earnings taking place. by june, we went neutral mega cap and growth, mega cap growth and tech because while we're very, very constructive on the earnings and fundamentals, on a relative basis, we think there's just too much priced in basically. so we really are looking for the rally to broaden. i wouldn't be short them, because they do grow the earnings a lot faster than everybody else. but we are looking for the rally to broaden. so i would look elsewhere for now. but neutral on mega cap growth. >> 5100 base case. real quickly, what gets us to the bullish case? >> it's the macro consensus,

giving up on the recession, and a better macro growth outlook. the bullish case is actually if we have 2.5% gdp growth in the u.s., we've had more than that for the last five quarters. so i would argue it's a very reasonable alternative to consider. >> incredible turn of events. one of the few people who had the right positioning coming into it. thank you for joining us today. well, let's go from the glass half full view to the more pessimistic take on the economy. we did get strong data this morning. retail sells rose in november, new jobless claims down by 19,000. but jeff gundlach warned it wouldn't keep up forever. here's what he said yesterday. >> we have broken down below the trendline on the ten-year treasury yield that goes back a couple years. there's a lot of room below it. i would guess that we'll see the ten-year treasury yield in the throw 3s sometime next year. that could be consistent in my

view only with the fed cutting more like, i don't know, 200 basis points or even more next year. so i think we're looking for a recession next year. we've been talking about this. the market seems to be picking up on that. >> well, on that note, let's pick up with david rosenberg, president at rosenberg research joining us on the phoneline today. i don't know if you caught our discussion just now, but he makes a compelling case why we're going to dodge the downturn, at least for the time being. >> well, kelly, thanks for having me on. i don't know why anybody would think that we necessarily dodged the downturn. the last thing i would do is extrapolate 2023 to 2024, and there's people like him that were extrapolating 2007 and 2008 and got their heads sliced off or extrapolating 2000 and 2001,

getting their heads sliced off. we've been in a soft landing for at least a year, but the soft landing is just that transition stage of the business cycle, a bring from the expansion phase to the contraction phase, which will be next year's story. i believe that is why all the fed talked about at the tuesday meeting, and the only thing they talked about was how far and how fast will we be cutting rates in the next two years? the stock market is only looking at rates are going to come down without thinking -- they're calling for 3.8% nominal gdp growth next year. 3.8 nominal.

i think it's going to be closer to 2% to 3%, but that's their forecast. and so the stock market is priced for a double digit earnings growth next year, and that's not going to happen if the fed has a nominal gdp. they both can't be right. so you have to ask why is the fed at least verbally pivoting so dramatically? they're seeing something right now that a lot of folks respect seeing. >> maybe they're seeing what we're all seeing, which is receding inflation. you don't have to worry about the worsening data, you can just react to that breathing room. dave, quick last question here. what is the lesson, the takeaway from 2023, a year in which it looked like we were going to tip into recession at any moment, and we continued to be surprised by the fact that it didn't show up? >> right. and what i'm trying to say is that 2023, when you were asking your previous guest, what does

it look like? 2023 looks like 2007. so all it was was the bridge. i think the people that were coming to the table, they were just too early. but let me just say this, because i know you have to do retail sales. there will be more business to that number, and it's a small sample size. here's what we know, kelly. we know that the fed is listening more right now to their business contacts around the country than they are to the spurious economic data that's coming out of the dlf and other government sources. when they go to the base book, what did they say? they said, 2/3 of the country is either stagnating or contracting right now. so for all we know, the recession is already starting. it's not in the data, but it's in the information that business contacts, not government

stati statisticians, are telling the feds right now. so we do this interview, i say two, three months from now, i get a sense the conversation will be a little different than we're having today. >> i'm putting it down for february 14, valentine's day. we will all check back in as a status update. >> it's the economy, stupid. >> thank you very much for joining us. appreciate it. david rosenberg. coming up, the drop in the ten-year-year-olds are pushing mortgage rates towards their lowest level since mid may. the president of the national association of realtors weighs in on that and will join us in her first interview. as we head to break, here's a look at the markets. the dow with an 87-point gain. the s&p is up six and the nasdaq has turned negative. we didn't get to talk to bob about it, but let's see what wall street veteran art cashen

expects for markets next year. >> it's an election year, and that tends to be good for the market. and people making projections and promises and programs, and even an election year, a sitting president is running for re-election, that compounds it each more. the best of all those historical patterns is when an incumbent president, who is deciding to go for re-election, and he needs a decent economy to back him up. (adventurous music) ♪ ♪

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welcome back to "the exchange." that initial drop in yields after the fed's meeting yesterday picked up even more steam today. the ten-year treasury was at 4.25% just on monday, and today it was down to the 3.80s. that means the 30-year fixed mortgage rate is down oto 6.82 f not lower. let's bring in matt graham. i'm seeing numbers 6.6% now. >> yeah, 6.62% is what i updated to a short while ago. it's been a staggering two-day

move. >> unbelievable. people were running the analysis on social media, but saying if you were one of these unlucky few that had to buy at 8%, it makes sense to refie. >> definitely. that's the calculus, right? sometimes as little as half a percent can motivate somebody to refie, whether they need cash out, et cetera. >> so what do we make of this dynamic for the housing market? 6.6% is still much higher than most people in their 40s, whatever the home buying audience is used to, it's better but not great. >> right. that's how they get you, right? now we're exciting for rates to come down to 6.6%. when rates were moving up over h%, 5%, this would have looked bad. so everything is relative. for sure, we have already seen the application data start to pick up even before the last two days of gains, talking about mortgage application. in the refi category, as well.

now they're picking up very low levels but picking up nonetheless. there's definitely a buzz that is increasing in the housing and mortgage market of the past two days. >> what would you expect the rate to be next year, based on what the fed said yesterday? >> yeah, that's good, get me with the predictions, right? you know, i love those. look, the rate momentum is as good as the trajectory of economic data. so if the data continues to do what it has been doing, there's no reason rates couldn't go down into the 5s, possibly high 4s, some of the talking heads, if they are right about recession in 2024. it's not unreasonable to think that we could see that territory that quickly. but it really depends on economic data, chiefly inflation. >> quick final question, as most people in the market are well familiar, the spread is

historically wide. is there any sign of that normalizing? >> i wouldn't say there's a sign of it normalizing. it's coming down, and it makes sense to me where the spread is, given the repidty of the move towards higher moves and should naturally come down as rates overall come down. and as volatility sort of dies down. >> that would be a great double tailwind. matt, thanks so much. good to check in with you. >> you, too. that plunge in rates, 6.62% today. could bring some relief to the frozen housing market after home sales fell to their lowest level ever in october. my next guest, tracy casper is president of the national retail federation. tracy welcome. >> thank you, kelly. i appreciate you having me on this morning. >> you have more drama between

what's going on at nar, what's going on in the housing market. you're like in the middle of a hurricane. so maybe we'll just start with the overall housing market, will this give realtors a sigh of relief on what's been a very tough year? >> with regards to the interest rates, is that the question? >> sorry, with regard to mortgage rates. >> absolutely. i just heard your previous speaker. no, there's no question. so what our buyers, because we do have suffich a pent up buyer pool. the interest rates rose so quickly it took so many out of the market. so many of them are coming back in. the affordability factor comes into that first and foremost. so we're excited about that moves. we're tentative about that news, meaning while those buyers come in, the other thing we're facing is we have a shortage of inventory. we do not have enough houses to adequately take care of that

demand that's out there. so we're watching that. we'll be talking to sellers and helping them recognize opportunities in the market. so yeah, things should start churning again. >> covering the real estate crisis in 2006, everything went up and down at the same time, to see a market where the existing market is frozen, but the home builder stocks are at an all-time high is bizarre. are prices coming down, is that one lever of normalization here, or are they staying high? >> there's acouple factors. it's interesting, because we have such a lack of inventory, that the builders are the gap fillers. they are being successful in the market right now. they're doing a lot to help incentivize buyers to help get them in the market. it's that existing inventory that we are crunched on. so with regards to this market kind of moving and churning, having that inventory come on, having the builders be successful, having the buyers be

successful, we're seeing such a normalization of the market. it's something that is very welcome, to be honest. we were looking for this kind of normalization, maybe in that 2018, 2019. we thought 2020 would be that year, and then we had the pandemic. so having those two years of these super sweeping, high increasing double digit year over year increases in pricing, that's really what has stymied the market. so now, here we are, over the last 18 months, and things have normalized. the market has only increased about 4%. those are the single digit increases we are waiting for, and we're looking forward to that. >> so let me turn to how the experience could be changing for people who are buying and selling their homes going forward. there's now a lot of other c commission lawsuits, as this appears to be gaining traction. do you foresee a time where the way we've been doing in home sales is no longer? and buyers are going to have to pay for their open agent, and

sellers are no longer going to be paying the buyer's commission? >> so it's interesting as we look at this. first and foremost, i'm a realtor. i work with my buyers and sellers every single day. i'm a broker/owner, so i work with my agents. you mentioned, i'm in the boise, idaho market. as i heard that verdict that day, i will tell you my first thought went to my buyers and sellers. so first, for the sellers, let's just talk about that. they have had so many options in the market. they have always had options in the market. whether it's a flat fee, an hourly rate or even a percentage. as we explained to them how we can help to bring more buyers into the market for them, in other words, as we, as a listing broker, to our -- the buyers brokers, that insentivizing those buyers and gets them to the table so they can come into that marketplace. the seller wants that.

they want as many buyers as possible that helps them get the best price for their home. our buyers are for the most part struggling to come up with a down payment. they're struggling to come up with closing costs in addition to that. what we don't want to see is the marginalization of those buyers. we'll talk about first time home buyers, even our middle and low income buyers. we talk about our veteran buyers. and we cannot disenfranchise them because they can't out of pocket pay for professional representation. and then what would happen? do they come into the market on their own, try to navigate a complex situation with the market, complex process of getting from point a to point b and closing on the home. and then what we also don't want to see, and this would be the tragedy of all of it, those b buyers don't come into the market. now what happens with the sellers? this is why we'll continue to fight. we want to take care of

consumers. >> it was very interesting. so redson has pulled out in order to settle their suits, others are not going to require agents to be members of nar going forward. so will listings still will funded through mls, or does this mean now it could be almost more like the rental market where there might be internet listings where anybody can come upon? have we fully seen the implications of all of these changes yet? >> well, we've watched over all of these years, as the markets have progressed and matured. so let's talk about the mls. that is the vehicle by which all of us as brokers share information, which is good for the consumer. that way they don't have to be disenfranchised. it's not fragmented. they don't have to go look here or there to see what's there. that mls is also accurate. a lot of those portals, ytrying

to get the consumer to come to them. at the end of the day, our rules make sure our data is accurate, transparent, we're making sure that we have an efficient marketplace so consumers don't have to shotgun it and head to one direction or the other. they can go to one place. so will the realtors still be valuable? absolutely. the realtor is there to take all of that information, everything that's out on the internet, be able to sift through it and put that expertise to it. it's interesting, because i hear that, you know, the buyers don't need a realtor. they can find their home on the internet and go to the seller and get it bought. at the end of the day, even just that process, the finding that home,ky walk in with them and i can say, you qualify for your loan, but the house isn't going to qualify for the loan. the loans are particular. we can put that expertise to work for them before they go down a path of heartbreak where they pay for home inspections, an appraisal just to find out that the house doesn't qualify.

even that one step. >> exactly. for us going through the process, it's incredibly ne nerve-racking process as it is. a lot of people will say, great, this is going to make it cheaper in some ways, and as with many of these moves, it will be years before we know the full effect and how that plays out. tracy, we appreciate you coming on today and talking about it. >> thank you. coming up, new york city rents are dropping for the first time in over two years. we have the numbers and the implications for inflation, and the fed, right after this.

welcome back to "the exchange." i'm contessa brewer with your news update. the european union decided to open negotiations for ukraine as well as moldova to join the eu. ukrainian president volodymyr zelenskyy called the decision a victory for ukraine and all of europe. a 13-year-old boy in ohio has been arrested and accused of planning a mass shooting at a synagogue in the city of camden. he's been charged with inducing panic and disorderly product. prosecutors say he made a detailed plan and shared it online in september. that was before the israel-hamas war began. representatives for the teenager have not responded to an nbc news request for comments. and the set of six jerseys

worn by lionel messi worn last year in the world cup sold at auction for $7.8 million. it's the most valuable sports memorabilia sold at auction this year. lionel messi, raking it in, kelly. >> huge. contessa, thank you. coming up, a real rally or just a short squeeze? my next guest argues we may have to wait and see, but there are some warning signs underneath the surface of this rapid rise. we'll tell you what they are when we come back. dow is up 57. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network.

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welcome back. are we making too much of a short squeeze rally in stocks? 41% are up 10% or more this month. our next guest warns the correlation between short interest and equity turns has been running at a high. after a record dow close yesterday, he expects that correlation has only gotten more extreme, which may be a warning sign for markets. joining me now is my next guest. tavis, good to see you. run us through the historical record here, and how much this episode sticks out to you. >> yes. so this year is most notable. there's been three significant periods where equity returns

have been high liquorlated to high levels of short interest. one of those was late january, followed by a pullback in equities for two months. another one was may and june on the ai rally. then equities started to weaken again. the third one has been november and early december. so there's a lot of reasons for the rally. but on top of that, we had a lot of short covering. and it doesn't mean that we're going to roll over completely, but it does mean some of the fuel toward the -- for the rally has probably neared its end. >> does it make you more bearish right now? >> i would say. i think at some point, the inflation story is effectively over, and, you know, but at some point you're going to need better economic data to keep the rally going at these multiples. we've had two to three turns of

multiple expansion in the last six weeks, which is just really substantial amount. you have now got mid caps that, you know, had been trading 20% to 30% below historical norms, and are now only 5% below his forr call -- historical norms. and large caps, outside the big seven, which were trading kind of 5%, 10% below historical norms are now 5% to 10% above. so at some point, you have to have better earnings to keep the fire going. i think we're okay, but the kind of rally from just the realization that the inflation risk is likely behind us, i think that part of us is coming to an end. >> we're a long way of sticking this landing. i wanted to ask you what you said about passing in valuations. valuations are up a couple of points? >> yeah, for sure. i mean, you can think of -- at

least i think every equity index is basically pricing in a percentage chance of a soft landing versus a recession. and right now, that percentage chance of a soft landing is skyrocketing in the eyes of the market. so that's leading to equity values going up. but if you look historically, most of the times after a rate cycle, we don't get a soft landing. most of the time, it takes actually an average of 15 months after the last rate hike to start seeing labor market weakness. we're only five months out from the last rate hike. so it looked like a soft landing in 2006 too, and in 1989, too. you just don't know for sure. it's going to be a full year before this soft landing has stuck. >> it takes some courage to issue a warning in a week like this. tavis, thanks for joining us. we'll find out in a couple more

weeks if this short squeeze runs out of steam. coming up, rent inflation jumped 7% from last yr,uthy nhattan rentals could be at a turning point, next on "the exchange." this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

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welcome back to "the exchange." it's not just mortgage rates falling, manhattan rents are dropping for the first time in two years. robert frank is here with more. robert? >> kelly, median rents in manhattan declining by 2% in november. that may not sound like much, but sit the first time in 27 months that rents fell in the nation's largest rental market. median rents now at $4,000 a month. average rent is still above $5,000 a month, and apartments are still 11% more expensive than they were prepandemic. but rising supply, falling employment in new york's financial and tech industries,

and basic affordability issues are bringing prices down. brokers say landlords don't want to officially cut list prices, so many are quietly offering a lot of concessions, like a month of free rent or even free parking. better deals are leading to more rentals. the total number of leases signed in november increased by 10%, rising supplies suggest prices could fall further in 2024 with inventory rising 30% over last year. don't expect bargains, especially at the top. luxury apartment prices reached a record $104 per square foot, and the average rental price for a three bedroom, kelly, is $10,500 a month. so price declines all relative when it comes to manhattan. >> that's right. you just squeeze them in the same room and say deal with it. i am curious, is it because more supply is coming on to the market? what are the dynamics here, any

signs this is a leading indicator for the broader rental market? >> the broader rental market nationwide has been dropping since july. manhattan was the laggard. what's happening in manhattan is partly a supply issue. the brokers say it's a demand issue. they had apartments that were listed in similar buildings in september where they were flooded with calls. similar apartments listed in october and november, crick etds. they're just not hearing from prospective renters. a lot of questions why that might be, but they're not getting people calling right now, so there's a lot of stuff sitting on the market. >> very strange. so it's not that we had an influx of supply. it seems to be that demand is a little bit quiet? that's interesting. >> it's a demand issue. again, some of it might be brokers speculating here. some of them might be these cutbacks we're seeing at citi and some of the financial institutions cut back this the tech world.

we're just not seeing the kind of job growth that we saw post pandemic in 2021 in new york city, and, you know, we're in the seeing a lot of overall population growth in new york due to taxes and all the things we know. so this could be a real reckoning. but brokers are has turned around from a demand perspective. >> scratching my head, to robert, keep us posted. really interesting. a bit of good news as long as we can make sure it's good news. our robert frank reporting. appreciate it. coming, up we're sticking with real estate, it's one of the top performing sectors today as yields retreat to their silos. we will speak with a developer with six billion dollars worth of projects in the pipeline. everything from luxury to affordable housing about what he is seeing next. that is on the exchange. do not go anywhere. trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms.

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exchange. multi family reits are on the rise today as the tenure dips below 4%. my next guest knows a thing or two about that. he's developed over 170 properties in the past three

decades totaling more than 11 billion dollars in real estate assets. for more, let's bring in kevin maloney, he's property market groups ceo. kevin, good to have you here, thank you for joining. us >> know, thank you for having me, appreciated. >> i don't if you just heard that chat we were having about the new york market in particular, where it seems like there's been some demand softness. >> so i will tell you that in the rental market specifically i have a couple of projects going up and we're actually seeing pretty much the opposite of that maybe there will be some softness, but you might be aware that the new york state recently curtailed their 4:21 a program and you actually cannot launch a rental in the new york city court order without having a 4:20 18 taxi basement. and so the supply side of the equation has completely stopped. this happened -- as well and we saw a surge in rinse. >> just remind us what that tax abatement does and why it went away?

as quickly as you can? >> yeah, it's a 35-year real estate tax -- taxes might be $25 a square foot, and the cost of building housing with all housing requires in affordable component in new york city. it would be impossible based on the cost in the print structure to launch one into build one, especially in today's environment but even today with kept rates and interest rates, we're at 3% it was not a feasible project. so for decades, many decades, the state had used what they called a 4:21 a program which allowed you to have a tax abatement and real state taxes while you are in this particular program which made them viable. that -- they have not sunset that program, and so if you are not really out of the ground in the last six or eight months, really the supply of any market rate or affordable housing has

just come to an end. >> that's really interesting, i have not been keeping out with my new york -- >> you have to speak to legislators up a nominee, but no question it is again going to in their wrist and they felt there was too much being given away but the result is that the -- there will be no new housing reit >> so you think, it's pretty obvious if there is a stalin supply coming online, maybe that will put more upward pressure on rents in that market. but you have exposure in a lot of different markets. what would you say is going on with the consumer, with wind patterns -- went patterns. what are you experiencing? >> with cheap mark money, lots of markets got overbuilt, and that's part of the cycle. and then of course the fed, i'm not looking at 18 months ago, sulfur is 5:30 today last time

i looked, somewhere around there. i, mean you're talking about a 30 x increased in a historical short period of time. that really put the brakes on all -- i don't know anyone who could really get based on supply chain cost increases, inflation during covid, i don't know that the capital markets today you can really launch a rental anywhere on the night states. but saying, that a lot of markets were seriously overbuilt. she, money a lot of people want to build markets. a lot of units were created, and you're going to see that absorbed and then from there you can probably see some rent increases. >> that's fascinating in what you just said about how it's literally not affordable. kevin, come back, we would love to do this with a little bit more time and get into it, especially curious with that as the financing a stalled out. kevin maloney, we appreciate today. thank you sir. >> thank, you have a nice day. >> property markets groups you.

we will bring him back, hopefully see my camera next time. that does it for the exchange, next on power lunch, intel shares hitting it 52 week high as the company holds investor meeting. you will hear from pco pat gal singer about how he plans to win the a.i. chip race. -- joining me on the other side of the break. don't go anywhere.

♪ ♪ ♪ welcome to power lunch everybody, alongside steve liesman, i am kelly evans. the dow making a record high today as the rally rolls on following the fed decision. mark it seemed to be acting as if the fed has thread the needle, steve, you would know better than anyone. controlling inflation and engineering staff landing. can stocks rally on until next year? >> plus we are going to look at on rent prices on real estate.