through and have a pretty good 2024 ahead of it. >> josh brown? >> uber. new 52-week high, doesn't seem to want to stop. >> all right. before we let you go, great to be here with you guys. one more quick look at the markets right now. remember, two numbers to watch when it comes to the markets. 4818 for the intraday high. 4796 for a new record close. that will do it for us. "the exchange" starts right now. ♪ ♪ thank you very much, frank. welcome to "the exchange." i'm kelly evans. here's what's ahead. yes, a record high for the dow. a near record for the s&p, and our market guest says the gains can continue. he sees stocks going higher from here. while some pockets look overvalued, there are plenty of areas that are not. we'll talk about which ones. a blowout finish for biotech stocks with the sector up 40% in the past eight weeks. we'll talk to one ceo whose

experimental heart disease drug sent the stock soaring more than 80%. the ups and downs of commercial real estate. we're heading down south where one area could overtake new york city as a financial hub. before that, let's start with the markets, and dom chu has the all-important numbers today. >> they're all-important every day, but this melt-upkeeps on continuing and continuing. we're still in that santa claus rally area, the last five trading days of the year and the first two trading days of next year. the dow industrials are up one quarter of is%, 37,743. we get to put a star up here, because it's a record high for the dow today. the s&p 500, 4791, up one quarter of 1%, as well. it's a high for the year. and we're just about a third of a percent away from record high levels that we saw just about two years ago. and the nasdaq composite, up one quarter of 1%, 15,132, as well. roughly 6% away from record

highs there. so keep a high on that. lower prices right now in oil. u.s. benchmark west texas intermediate, $72.72, down almost 2% right now on some easing concerns about what's happening in the red sea. there are some fewer attacks. it appears there are efforts to stem some of the houthi attacks on vessels this the red sea are having some effect, putting crude prices lower on the session. u.s. benchmark and world benchmark brent lower on the day. an interesting slate of stocks that are more cyclical in nature. they're red right now, marriott on the hotel side. caterpillar industrial machinery. builders first, construction materials and kla corporation. at one point today, each of these stocks hit record highs. so four stars over here on these particular moves. but interesting that hotels, industrial equipment, building construction and semiconductor

stocks like these did hit record highs in today's session. we'll see whether or not that story continues to play out in the coming weeks into 2024. back over to you. >> dom, thank you very much. dom chu. jobless claims rose slightly last week. another sign the labor market is cooling somewhat. but is it cooling fast enough for the fed to cut rates soon in according to the latest survey, 54% of respondents expert cuts to start in the next -- first quarter of next year. gus, welcome to you. >> thank you very much, kelly. >> when we talk second quarter next year, april, may, june, that time frame? >> more towards the end of the second quarter, beginning of the third quarter rather than in the early spring. i think the fed wants to be sure that inflation is slowing more towards 2%. it's certainly moving in the right direction. but with the economy remaining strong in late 2023, and it will continue to remain strong in early 2024, i think they're

comfortable keeping rate where is they are in the near term. and once it becomes more apparent that inflation is slowing to 2%, they can cut then. >> so your base case is the positive disinflation story or the worrisome kind? >> it's the positive story. we have seen a significant slowing in inflation, particularly on the good side over the past year. housing inflation has been a problem, but that's likely to slow in early 2024 with rent growth slowing dramatically. so i think that we will see slower inflation with still solid growth in the first quarter of 2024, and then that would give the fed some leeway to cut rates next year. >> the question then is, if this is very priced in, and that's where i wonder about the pendulum swinging back to the other side. we're talking about march. goldman and others are talking january, so the market is off to the races with this. what does that tell us about the bond yells we are seeing to close out the year?

>> markets expect lots of rate cuts in 2024. i'm a little bit skeptical about that story. i think that if growth remains solid, then the fed will say, look, we can keep rates where they are in the near term, make sure inflation is moving to where we want to be, then start to cut rates. i think if you see a lot of rate cuts, that's bad for the economy, because that's an indication that things are slowing more quickly. so i expect with still solid growth and slowing inflation, we'll see the fed cut a few times next year. and that sets the stage for solid growth in 2024, slower than what we saw this year, and that expansion in 2025, as well. >> we have a seven-year auction. gus, we'll come back to you. rick santelli is back in action. rick, so you can give us the grade. how did it go? >> well, it was a dog plus, a dog plus. i know that there's many out there, of course, that are going to look at some of these results and maybe have a different grade. but first of all, look at the intraday of seven year, and you

can see yields are moving higher. usually, it symbolizes a not as solid an auction as we would like to see. if you open the chart up to early june, you can see yesterday's settlement right at 3.81 was the lowest deal close going back to the first week of june. here's the metrics. we had 40 billion seven years, and the dutch auction yield was 3.859. the problem was, the one issue market was trading at 3.835, with a high yield of 3.84 before the auction ended. so we ended up with a higher yield, which means a lower price. the government's the seller, not good for demand. so d plus, dog plus. if you look at the bid to cover, it was roughly average. indirects was the best since march at 63 -- excuse me, since march at 63.7. but there was one really bright

spot here, okay. and hence the plus for the d. that was 19.4% went to direct bidders. that's very good. it shows that many of the insurance companies, pension funds, real users of securities, really stepped up for a seven-year, which is unusual. dealers took almost 17%, which is unusually high. so we just completed 155 billion in treasury coupon supply. the seven-year did not go as well as the five-year, and it underscores that not only is it a holiday week, which impacted the results, i'm sure, but this puts many question marks into the big picture. not any single action, kelly, but in its entirety, the amount of supply that the treasury needs to move to take care of our deficit spending is going to challenge some of the demand by investors around the globe. back to you. >> rick, we missed you for the two and five-year results.

we did our best to give it a grade. we thought it was an a. we saw bond yields drop significantly after those happened and stock prices rise. today it's a totally different story. >> yes, it is totally different. and to be fair, the five-year is always going to probably, when you get this particular package of 2s, 5s, 7s, the five-year has a propensity to do better. a lot of financing and a lot of derivative contracts, of course, are predicated around the sevese five-year. the seven-year, there was a time when the housing market was stronger when the seven-year matched up nicely with the duration of the mortgage, baa that's not going to show up considering how weak the housing market is due to high prices and high financing. >> rick, let me pull you into

this chat gus and i were having. it seems like we have gone from inflationary to disinflationary, only deflation ary talk overnight. gus, how much deflation do you see in 2024? >> you know, i expect to see a fair amount. it's going to occur mostly on the services side, some from housing, and some with other services with the labor market cooling down. so i think that the fed will be at their 2% objective around the middle of next year. that's pretty remarkable progress, given the high inflation that we had in 2022, and then even into early 2023. >> rick, that's my question to you, as well. do you think the bond market has gone too far in pricing in these really dovish outcomes right no? >> i think the bond market has done the same thing that many fed followers, and even fed governors have done. that is annualize some of these numbers that we received over the last couple of months.

they annualize a one-month ppi or cpi or pce or deflator, and they look to see how much lower, of course, it's going to be. but the problem i see is, i'm not so sure that inflation is going to have a linear outcome that would allow those annualized rates to be true to form when we ultimately get there. and you can pick, there's so many different inflation indicators. i don't think it should surprise anyone that the fed's favorite is the one that's going to be the lowest. if you look at cpi and go to the bureau labor of statistics website, look for the cpi inflation tool. i urge viewers to play with it. what they'll find is, when they go back in time, the compounding nature of inflation is much a rougher ride than annualizing some of the more current inflation rates. >> do you think we could see a backup, gus? pick your variable, maybe it's all of a sudden some home price inflation. we saw what happened with prices in october.

>> certainly, that's the case. energy, with what's going nonthe middle east, could drive-in nation higher. if the labor market doesn't cool off and service industries see stronger price g.o.rowth, so i think that's why the fomc remains cautious in the near term until it is convincing that inflation doesn't necessarily need to be at 2% year over year, but will get to 2% year over year. >> rick? >> you know, i don't think the fed is going to see its 2% target. i think we're going to be more to 2.5% to 3% inflationary picture. i do think the fed will find ways to ease the pressure on rates. but i really don't think you're going to see rates move as far down as some of the markets may be projecting. i think long-dated treasury yields in 2024 are going to pay a whole lot more attention to the fact of how much debt we have, how expensive it is to service, and all the cross

currents in government as one side, of course, from the fed makes the treasury side much more difficult due to how high it raised rates. now it's going to have to give a little back to relieve some of that pressure. >> market is hanging on to gains. rick, what was your grade, a d? >> a d plus. we saw some of the metrics pretty solid, but the actual pricing itself was weak. >> rick santelli, thank you. gus, thank you as well for your time today. let's turn to stocks with the dow and the nasdaq 100 at record highs. the nasdaq 100, not the come poise it or the s&p. my next guest thinks the market will climb in 2024 with some bumps in the road. let's talk to david katz. david, first of all, how did the year go for you? we talk about the mag seven, but you have general electric that are doubled. what powered your portfolio?

>> the year went relatively well. we have two strategies, value, which was very good, and we had five of the seven magnificent seven that we bought when they sold off last year. the dividend portfolio had a slow start, but for two or three months is ending really strong, so we're feeling good about that, too. our outlook on bonds was good. so we're hopeful we get close in terms of what we are thinking about next year is what we thought this year. >> you had five of the mag seven in your value portfolio. let us not forget what people thought about those stocks 52 weeks ago. >> that's a great point. we looked at it this morning. even though they've had a phenomenal year this year, the group average is only up 8% over the last two years. so you just have to remember, you're not guaranteed to make money in those stocks. they will fluctuate. our outlook next year is good but not nearly as good as it is now. as you mentioned earlier, we think a lot of the laggards are

positioned to catch up and lead next year. >> it's so important that the mag seven overall is up about 8% over the past two years. we forget about how bad 2022 was. and at some point, you have to sort of say, well, for all the talk about whether to sell them next year, if these names don't perform, they're underperforming, you can say they've underperformed, if the market is supposed to do 7% and they're doing 4%, that's not that great. >> for the last two years, the market has done poorly. but you're 100% right, we don't think they're going to have the 30%, 40% gains next year, if the market does 8, 9%, they can come in around there. there are areas like health care or utilities or financials that didn't do as well this year we think can outperform the averages. small and mid cap also had a poor relative year. we think there's going to be a catchup there. so there are lots of places to make money. we don't think you want to look at the recent trends. >> what gives you the conviction

for health care? health care has not performed nearly as well as people expected. so, i mean, you have clients you have to answer to. how confident are you about being in areas like that for 2024? >> we are very confident. you know, going into '23, we were saying the same thing about technology, which got creamed the year before. that's paid off. in terms of health care, the reason that we're confident is the businesses have done well this year, the earnings have grown. many of them are paying great yields, yet the stocks have done nothing, so the valuations are 11, 12 times earnings. in a slowing economy where the fed will lower rates, making dividend paying stocks more attractive, it will be a good place to be. we're finding opportunities throughout health care. companies like united health care or the drug companies we think are well placed, so the whole group has lagged. we think it will have a catchup rally. we also think that if we're wrong on some of the things

we're looking for, health care will hold up a whole lot better. >> what are your favorite dividend plays? >> right now, we like cisco, medtronic. rates have dropped a lot over the last couple of months and n n nextera is not where it should be. rtx, they are doing accelerated stock buyback. unfortunately, we need a lot of the products they make both in the u.s. and globally. >> a lot of people have been pointing out that lately. so i guess my final question would be about industrials, which we have seen the valuations in some ways showing to be more expensive than the rest of the market in a year which the ism is still weak, but there's been individual stocks that have done quite well. what's going on with that group as a whole? >> that's right. the group has been spread out, so some things that are richly priced and there are some

opportunities there. so fedex just got beaten up in the last week or two. we think that's back at an attractive level. thecompany just announced a $1 billion repurchase program, which we think is very bullish. air products has underperformed the market this year. earnings have grown 10%. the dividend is 10%, yet the stock hasn't done anything. we think that's another industrial that is a good place to be. >> i'm going to circle back to those big mag seven components. i'll throw nvidia out there. are you comfortable -- are they going to -- can they stay in your value portfolio, are you comfortable holding them, if you maybe wouldn't be a buyer? >> we don't own nvidia or tesla, but we do like still the valuations on google and meta. apple is getting fairly priced, so we are less enthusiastic about apple. and microsoft, we're staying with them for now, but less aggressive in terms of putting new money into it.

>> you always make so much sense. david, thanks for joining us. >> thank you. happy new year. >> you, too. coming up, it's been a wild few weeks for biotech. what's next for the company after seeing takeover interests from names likes a t-- and miam could overtake new york as the financial capital of the world, but luxury kncondos aren't selling. we'll get the latest in the show. here's a chance at the markets, hanging on to gains. the dow up 70 points. any close today would be a record high. the s&p is up about six, a few points below its record close. the nasdaq composite about 6% below but adding a tenth of 1% today.

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welcome back. shares soaring on positive news.

the stock hitting a 19-year high yesterday. both piper and canter say the drug is best in class. joining me now is the president and ceo. robert, thanks for joining us. welcome. >> thank you so much. >> what's your response? what does it feel like today? >> so these are especially gratifying times. you know, when scientists dedicate to an area of biology like ours have done for what amounts to decades, and you see data like we announced this week, it's unlike any other experience i've had professionally. this is incredibly fulfilling, consistent with what have been our highest expectations and aspirations. we feel quite fortunate. >> how long have you been at the helm of the company? >> i've been lead thing company since 2007. i was involved in starting the company in 1998. >> as i understand, going back

years, there was a lot of hope and expectation around this drug. the stock price reaction tells you that some are still varied. why do you think that is? >> you know, ours is a very risky business. as you can see from my background, we have been at this for 25 years. we've had successes and setbacks in our business. that's not uncommon. those companies that get to the other side of positive phase three data are somewhat rare. and we're now in rarified air. we're very pleased that we have seen it through where good science translates to potential benefits now for patients. >> as i understand it, the big competitor is mio cardia, now owned by bristol-myers. explain the difference of your treatment and theirs? >> there's a little history there. we took part in the formation of

myocardia. it's a very good medicine, available to patients and they're experiencing tremendous benefits. but knowing it so well, there were opportunities to address what could be certain limitations, and we have engineered and designed now a next-in-class drug candidate. it has certain features that allow it to be achieving more rapid onset of activities, more rapid reversability or hope is that these data lay a body of evidence for support for what could be an approval that enables it to be used by more physician for more patients. >> this is kind of a wonky thing, but those in the pharma community will understand. there was an article that said your company aims to be the vertex of cardiovascular disease. what areyour aspirations in this space, and how big is the opportunity? >> vertex is one of those companies that we admire, as well as companies like gilead and others that have built

franchises, and ours is a goal to build a franchise in specialty cardiovascular medicine, for which there's no peer right now in the biopharma space, combining the best of specialty pharma with cardiovascular disease, we believe we can build a very valuable business, one that offers high return on investment for shareholders and benefits for patients. this one particular compound that you are referring to, this is the lead amongst now four in our pipeline, and these data that we announced yesterday read very optimistically, we believe, on this biology and our ability to mine it for potential new medicines. >> how many americans suffer from cardiovascular disease and how many could benefit from this drug, and what does this drug do to improve their health? >> so the results we announced yesterday were from a clinical trial in the setting of patients

with hypertrophic disease, which effects one in 250 patients and hundreds of thousands of patients, admittedly not millions the way some of the other diseases that our research is focused to. but this opens the -- we're studying this and its sister compound in those indications, and they read what could be millions of patients who have diseases associatedwith impaired cardiac musclemechanic. our scientists are the pioneers as it relates to either augmenting or suppressing the cardiac contract associated with heart function. >> again, using that exercise as a way of showing what patients

are capable of after taking this. do yesterday's results make it more or less likely that your company would be a takeover candidate now? >> well, that's for others to answer. i really can't say. i do know that we've been active in business development interactions, seeking to partner in geographies. there's a high level of interest in the work that we're doing. these data meet our best case scenario, our high expectations for what could be those partnering interactions. but ultimately, we intend to go to market ourselves in north america and europe, and we're building out for the commercial readiness to make that appen. the goal now is to manage that which we can control, which speaks to getting these data in front of fda and the european equivalent as soon as possible. and hopefully, a potential new medicine in patient's hands in 2025. >> interesting. finally, what would the cost of this be? is it a one-time treatment or

ongoing thing? >> so this would be an ongoing thing. patients would take this once diagnosed. as they would be expected to continue indefinitely, the cost we have not determined. but what we have demonstrated with these data is a value proposition that would be enabling of this potential medicine to be a good alternative to a surgical intervention, which is quite expensive. our goal is to demonstrate economic value, but also ensure access that every patient who could be eligible would ultimately benefit. >> robert, thank you for joining us. congratulations. i appreciate you breaking it down for us today. >> thank you so much. still to come, home builders are also on a historic run to close out the year. we'll get the latest housing data later on and discuss whether it marks a broader

turning point for the market. and financials are hitting new 52-week highs today, including jpmorgan, and blackstone is trading at a 20-month high. more on the other side of this break. (sfx: stone wheel crafting) ♪ 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? ♪

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trading at a 20-month high. broadridge, up 50% this year, and intuit on a 60% run since january 1. and the industrials, they're having a strong end of the year, too. general lelectric hitting a six-year high, andits best year ever. as for the mag seven, the magnificent seven, we know those stocks have taken off this year, essentially doubling since jan 1. but the big question is whether you stay in or rotate out for 2024. bob has more at the new york stock exchange. >> kelly, good to see you. the explosion of the ai story and the magnificent seven were one of the big investing events of 2023, leading names like nvidia up 236%, meta up 196%, and amazon, alphabet, microsoft, apple all up, you see here, 50% to 80%. a few points about this ai rally.

first, a hand rainging that thee were the only beneficiaries are not true. not just other semiconductor places like amd was up, but almost anything involved in the cloud business had big moves, as well. like arista networks and cloudflare, both up 90%. in this plays out like the internet, you can expect an echo system around ai to expand in 2024. second, all this hand ringing that this would lead to crazy valuations has not occurred among the largest players. microsoft, 2024 earnings had roughly 28 times forward earnings, only slightly above the five-year average. same with apple at 26. only slightly above its five-year arm at 23. meta is in line with its five-year average. and nvidia, 26, that's lower than the five-year average, which was around 35 or 36. the same with alphabet below its

five-year average of 22. third, since rates began declining in late october, and this soft landing scenario became the dominant paradigm, the influence of the magnificent seven on the stock market has waned. while tech stocks are still strong, the market has dramatically broadened out since november 1. small caps, small-cap value, equal weighted indexes have been leading the way, even aztec indexes like the s&p 500 and the nasdaq 100 continue to gapein a do well. there's a little lament that everyone has, the magnificent seven is why the s&p is up that's not exactly true. the s&p is up 25%. if you take out the magnificent seven, the s&p would still be up 10%. my point to that is, that's why people own indexes. that's why indexing one half, because people don't know what the leadership would be. it's not unusual to have a small group of companies leading the

way. people say, we don't know what those small groups will be. but the s&p is up 25%, you have participated in that gain, in the ai revolution, despite owning the s&p 500. >> i couldn't agree more. if the rally broadens out next year, i don't have to care. if you own the s&p, you might benefit from that, as well. >> and i know active managers don't like that idea and rail against the concept, but it's worked for a reason. activemanagement has not generally outperformed following the index. >> bob, for now, thanks. to tyler mathisen now for a cnbc news update. >> thank you very much. an israeli official told nbc news that the country's war cabinet is set to meet tonight. the cabinet is comprised of top israeli officials including prime minister benjamin netanyahu. the source said the cabinet will discuss updates on the fighting in gaza and the plan for after the war. a federal judge upheld the republican drawn georgia republican map today, ensuring republicans maintain their 9-5

edge among the state's house of representatives seats. the decision rejects arguments from democrats andvoting rights groups that claimed that the map illegally dilutes the voter power of minority residents. several storm system rsz impacting travel across the country today. steady rainfall sweeping through with 10 million people under flood alerts this morning. air delay is expected to continue in hubs including new york city and boston and could delay flights out of midwest airports, as well. the west coast bracing for torrential rains today and tomorrow, impacting both road and air travel potentially. kelly, back to you. >> tyler, thanks. coming up, we're heading down to vice city. the largest land owner of miami's miracle mile joins us next for a pulse check. "the exchange" is back after this. when you think of investment risk, do you consider climate risk? changing weather patterns are impacting the way we live

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welcome back. we've been tracking commercial real estate across the country as credit concerns ramped this year. today, we are heading south to a state with one of the fastest growing populations, florida. the latest data showing the sunshine state's expansion is second only to texas, adding

365,000 residents this year alone. miami in particular has attracted some of wall street's most recognizable names. kevin griffin saying last month miami could become the financial capital of the world after relocating citadel to miami from chicago. don peebles sold us here on "the exchange," he's seen big opportunities in miami, as well. joining us nor is the founder and chairman of terranova, the largest property owner on "the miracle mile. "what is the miracle mile. what are your properties, where is some of the development in the city happening? are you seeing any slowdowns? >> so development in the city is happening everywhere, across the board, from corner to corner, north to south. we're the largest retail owner on lincoln road in miami beach, as well as the largest own of miracle mile in coral gables, our most two important streets in miami-dade county.

and ken griffin may have it right. we saw a huge volume of relocations early in the pandemic of billionaires. they brought their companies right afterwards. now we are starting to see the second wave of their executives and accounting firms that service them. so we have never been more excited about our commercial real estate future here, which is unlike almost everywhere else in the country. >> when you say commercial, are you talking office, retail, both, other things? >> so we are -- we're invested in office, retail, industrial, and multifamily. all of them are performing at record levels right now, with occupancy rates and rental rates, the highest we have seen in 20 years. swez had a guest on earlier this week, kevin maloney, and he is exposed to a lot of luxury condi condos in florida. he said there's been so much inventory coming on the market that prices are starting to

soften and some projects are even stalled. is that true in miami? >> most of the projects that didn't get started before interest rates ran up and debt capital became less available have stopped before they began. the developers are holding onto land. rental rates have flattened out. we have had a record amount of deliveries in multifamily, and after three years of skyrocketing rental rates, things are flattened out. we are not seeing a lot of incentives yet for tenants to move in, but we think that could be coming. this may be the only office market in the country that people are building new office buildings, and our occupancy and rental rates, again, are at record levels. >> should we expect commercial real estate owners to run into any problems on rates alone when they have to do those calculations or face maturities in the next year or two, or do you think they will be unaffected or make it through

okay? >> it really depends on how well capitalized the property owners are. no question that people that had variable rate mortgages have seen more than rates run up from 3% to 7.5%. people with fixed rate mortgages that have maturities are seeing a meaningful increase, and are underwriting to require them to pay down the debt or to give it back. at the same time, occupancy in rental rates have gone up meaningfully, so there's the tension there. you know, it will be a tale of different owners getting different performance. we bought an office building four months ago, and we're able to get a 60% loan-to-value mortgage and came in with a big chunk of equity. that continues to lease up with rental rates above core projection. every owner has a different

story. the biggest crisis we face is the small and mid-sized banks are out of business in terms of new debt. and they are the primary lenders to small and mid-sized businesses. they claim that the fed is pressuring them to shrink their loan books. as long as that's going on, that's a risk factor that we face. >> canprivate credit, those kind of firms, step in to avoid it? >> there's no question that the up, meaningfully different than where we borrowed from the banks. we have not been a borrower from those sources, but most of the markets as they have maturities, are considering some of these lenders. >> you said that with a slight smile. is there a reason -- is that a good thing to you? do you think if people have to turn to those sources they are going to pay maybe a little bit more than they might feel comfortable doing? >> i guess the smile was look,

we were prepared for this storm. we had self-large liquidity events at the end of '21 and we patiently waited. so we have a 42-year history as a company, and a balance sheet that was built to ride out storms like we are experiencing right now. so these usually are the moments of greatest opportunities for well capital eased experienced operators. >> steven, thank you so much for joining us. appreciate it. good to check in with you. hope to do so again. coming up, mortgage rates sank last night, boosting the home builder stocks, but it hasn't necessarily translated into more home sales. stay with us. hamas is a terrorist group oppressing the palestinian people. hamas refused a continued ceasefire, a continued pause in fighting and more aid from israelis in exchange for just freeing more hostages. instead, hamas resumed attacks.

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♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity. welcome back. mortgage rates plunged last moment, but pending home sales department bunl. diana is here with more. diana? >> well, kelly, the street was expecting a slight gain because as you said, rates came off that 8% high in november. but pending sales remained unchanged from october. sales down 5.2% from last november. that according to the national association of realtors.

now, this number is based on signed contracts during the month, so it's a forward looking indicator of closed sales, but also the most current look at what buyers are really thinking. and mortgage rates here are key. the average rate on the 30-year fixed soared over 8% in mid october, then dropped to 7.5% in the first week of november, and ended november around 7.25%. again, that's why the street was looking for a small bounce. now, the realtors did note in their report that while that drop didn't result in more formal contracts, it did spark a surge in interest according to their lock box indicator. that's those boxes on the doorknobs on new homes show who's going in and out. so regionally, pending sales rose slightly month to month in the northeast and midwest and more sharply in the west, which is where prices are highest. so a drop in rates would help most. mortgage rates are solidly in the mid 6.5% range, which could bring a boost to sales to start

the new year. that is, if we get more supply on the market and kelly, as we keep talking about that is the big if for this spring. >> indeed. diana, thanks. coming up, from a splashy debut to mega corporate drama and now to lawsuits, what is in and now to lawsuits, what is in store for

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it has been a breakthrough year for generative a.i., and as the popularity has grown, so to have questions about the rules of the road. most recently with the new york times suing open a.i. and microsoft, alleging the a.i. tools used its content without their permission. the next guest founded another microsoft backed a.i. start-up, and the regulations to accelerate in the next year. joining us is sasha dougall, sasha, it's great to see you again. >> thank you so much for having me. >> all the way from dubai, as i understand it. is this business related, or just a little personal trip? >> you, know london is very cold right now. we wanted a little bit of sun. we could --

>> do the falcon l l and that everyone is talking about. anyways, tell me about some of the prospect that you see. when you see this new york times lawsuit, do you think to yourself that this could stunt the growth and adoption of a.i., we're now? >> when you think about language models, they need access to information. that sort of a precursor. they have to assimilate a pattern of thinking or prediction. they can at least sort of feel like they have a general knowledge. this particular rule set, and others that are like, this they bring up a very important point, which is at what point is the knowledge a copy? at what point is that knowledge inferred? if you imagine that you saw a painting, or you read a poem, you were inspired to write something new, are you infringing the original poet or artist? are you being inspired to write

from it? in human terms, that is really what is established. what machines are doing is an unprecedented scale. it sort of really is this open point, and it's a big gray area between straight copy and paste and direct inference. >> to me, it seems like it comes down to if the output is literally plagiarism. it is plagiarism if the output is -- and there are different layers that people will analyze this. that seems like an obvious place to take it. i thought you would be interested to talk about this as well, because a lot of what builder.ai does is give people a way of building apps without having to know coating or a.i. themselves. okay, you can build an app like the new york times, you can build an app like facebook, you can build an app like amazon. is that sort of imitation, does that take any of their intellectual property? in order to recreate the -- you know, that look and feel of an app for something new? >> i think that's a very good

point. number one, we do not replicate what somebody else might be doing. we do not copy and paste. when people are trying to build software and are not technical, in fact when people are trying to do any of this subject matter, they often say that i want to build something like this. it does not mean that you are doing a rinse and repeat, a replica of that particular piece. what you are doing is almost like a vernacular that you are using as a reference point. then they will say, well, i wanted to do this, i want to do at these features, i want it to be pink, i wanted to be with these buttons, these colors. that's where our idea of this reusable features, not reasonable applications is very different. we don't enter this world of plagiarism, we do not enter the world of building a copy of x y and z. help us describe what is in your mind that you are trying to build. when most people describe that, they will describe it by using references of things that they

already know exist. that becomes a steppingstone for how they think about the future. >> and i guess finally, the a.i. that you are using in some way, shape, or form to do this, how does it learn? what are its data sets? where do those draw from? >> builder is multi modal in it's nature. on one hand, we have a knowledge graph. we use graph theory. the thing about knowledge graph, how the mind works, it's relationships between features, for example you have a checkout feature. you have a payment feature. maybe the one that you want to add is safeguard says that the customers do not have to continue to enter their credit card details. that is on the knowledge graph. once we figured out that these are the features that you need in the application, which could be through multiple reference points that you have, questions that you have answered as well, natasha, it's a. you have a box set of features. and then a neural network, a box graph says that these are the happy flow of the 51

features. that's where it is not sort of copying. it is actually sort of designing the flow of the features that you are submitting to. the last state of it is the customization. that customization, you are now getting to a point where you are using all of the historical data that we have apparently. for example, we asked about 100 million questions last year. about 12 of them -- 1200 were unique questions, the rest were variations of that question. we have very strong data points that allow them to generate the code. >> that makes sense. after looking it through, i wanted an app for our show. the exchange was $72,000. it sachin, thank you for joining us. we appreciate your time. we will check in with you. sachin dev duggal from builder.ai. that's it from the exchange, power lunch is next. more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more -

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