>> jimmy? >> qualcomm. it's had a nice bid to start the year. maybe somebody will upgrade it tomorrow. >> if we get through the two-year auction, keep your eye on microsoft. good buying action. looks like it's breaking out, on the highs of today. >> making a run at 3 trillion. we'll watch that closely. see you on "closing bell." "the exchange" is now. ♪ ♪ indeed it is. thank you, scott. hi, everybody, i'm tyler mathisen in for kelly evans. here's what's ahead. stocks may be lower today, but our market guests both say the bulls have the upper hand for now, and one says that's especially true if rate cuts don't come too soon. he's here to make his case for that. the u.s. expands strikes in yemen. and look at one retail group, most exposed to red sea disruptions. netflix on deck to report the company may have won the streaming wars, but what about the ad wars? mark douglas is here with who he

sees as best positioned to reign supreme. but we begin with dom chu who has the market numbers. >> it's been a tight trading session so far today. we've seen either side of the unchanged mark for the s&p 500, is which currently sits at 4854. we started at 4850, where it closed. so up about three points, relatively flat. the highs on the session, we were up roughly eight points, down six points at the low. so a fairly tight trading range. the dow down about 1/3 of 1%, 37,857. the nasdaq composite, advancing to the upside here with the leadership, up 23 points, 0.2 of 1%, 15,383. one place you want to keep a close eye on is the slew of earnings movers that we have. i know that you guys are going to go into a lot of these stories more in depth today. one of the worst performers in the s&p 500 has been dr horton, 3m on the heels of disappointing outlooks.

verizon and proctor and gamble, powering the dow higher. proctor, maybe some organic sales growth there. we're watching those headlines, but keep an eye on those earnings related movers. one other place to keep an eye on is bitcoin. we're down another 2% today. now, remember, at the highs we were north of 48,000 in terms of bitcoin per token. now we have lost roughly 19% from those levels here. this is all in the wake of those spot bitcoin etfs coming to market. so there's been a move off the highs. we'll see the that downside allows them to continue. right now, below 40,000. back over to you. >> thank you, dominic. thank you very much. dom chu there. wall street is back at it again. economists are kicking the can down the road, forecasting a slowdown that never seems to materialize. steve liesman has your latest predictions in our latest cnbc rapid update. hi, steve. >> hey, tyler. this has been going on for a

while. economists surveyed, they've again had to upgrade their outlook for the first and fourth quarters, but continue that growth slump, which never seems to come. the 18 economists we surveyed see gdp at 1.9 in the fourth quarter. they had a stab at this back in october at 1.4, this quarter almost up a quarter percentage. economists continue to see it right there, forecasts that slump that never comes, beginning in the second quarter where growth will drop below 1%. that has been a feature of the forecast for a couple of years now, where economists see growth slipping below potential in coming quarters. then they have to raise their outlook as the data come in better than expected. of course, the average highs differences. goldman, they're not in the very much anymore. they see trend growth throughout the year. but economists at citi, they're looking for what looks like a recession. two negative quarters in a row

right there. economists also lower their outlook for inflation, core pce at 2.7% for the fourth quarter. 0.7 percentage points lower than previously forecast. and gradually declining over the year towards the fed's 2% target, which it hits in 2025, according to this forecast. hard to say why economists keep getting that two quarter slump thing wrong, and suffice it to say, the economy and specifically the consumer. but even business and government spending have proven more resilient than they've being given credit for. the gdp number we're looking for comes thursday morning. >> where are you on this, steve? what do you think the economy is going to do this year? >> i'm fairly upbeat. i think it's been a big mistake to forecast a downturn. i think there are some things that will come true this year. i think that a growth slowdown, bad potential, maybe a little potential, 1% makes a lot of

sense to me. but the consumer has proven so resilience, and i think that comes from less amount of money that was given people during the pandemic, and more from jobs and decent wages with those wage increases that we have seen. i think that's what's been propelling the economy. that to me explains why it lasts, why it doesn't go away. >> steve, thank you very much. we're going to follow up on that conversation with this one. economists revising forecasts, the market has been hitting new highs on hopes of a soft landing. but is the move too far too fast? our next guest says they won't be surprised to see a correction, but the momentum seems to be on the side of the bulls, especially if the fed doesn't cut rates until later this year. joining us now in the house, nancy tangler, chief investment officer, and andrew slimmen, from morgan stanley. you heard what steve just said, what he reported about a couple of the brokerage houses, big banks, goldman and citi for the

economy. what do you think? >> i think we've expected the economy to slow, and so that's why we've been putting our assets to work in what we call reliable growers. so technology, some consumer discretionary industrials. i don't know that i have to get that right in order to generate good returns. so we've drawn an analogy to the 1990s, tyler, when i think we were talking back then and i was managing money, and there's so many analogies to what we have today. higher than average interest rates, higher than average inflation, an inverted yield curve, soft landing, share buybacks. and i think that's what will put a floor under this market. >> you think that's a big factor? >> i do, but they're a fact. so yeah, we do. >> andrew, where are you on the recession/no recession spectrum? >> you know, the question is, how are investors positioned. that's what i worry about. last year, people were all expecting recession. that was the positioning.

defensive stocks were very much in vogue, because that's what you own in a recession. turns out we didn't have a recession, so the market did very well. but coming into this year, people are less defensively positioned. they expect a soft landing, so that concerns me a little bit more than the risk, if that soft landing is wrong -- >> will move to one side. >> you got it. >> a couple of things you mention in your notes, last year was pretty low in terms of volatility. >> uh-huh. >> you point out in subsequent years the pattern has been that volatility returns. that's number one. number two, that people are anticipating fed rate cuts, but that when the fed typically cuts, usually you don't get a positive reaction in the stock market, because, i guess, investors are thinking, maybe the fed knows something we don't know. explain. >> i think steve is right, but that -- soft landing is going on okay, but that doesn't change the narrative that when they cult historically, stocks don't

do well for the reason you said, which is what did they know we don't know? so i think the knee jerk reaction might be oh, my gosh, maybe it is a hard landing. no one expected it. maybe a hard landing is coming. i don't think so, but i think that's the type of thing, as you said, more volatility this year, what could cause more volatility is that -- >> what you say, and this is why we lead into the segment, we said that the expectation is that stocks could do pretty well if an interest rate cut doesn't come until mid year or later, right? >> yes, because i think if the fed says, we don't need to cut, the economy is good, we're going to take a long time, that puts the next year's earnings into play, right? and if we think about the end of this year, we're going to be priced off earnings estimates for next year. >> nancy, let's get to a couple of the areas that you like and some of the names that you like. react to what andrew said there as well in terms of the case on

interest rates. i see you like brookfield asset management, vertex, lamb, service now, adobe, why this? >> a cornucopia. >> of unrelated -- >> so i don't think it's any surprise that we're overweight technology. we have been. we were advocating for that in the fall of 2022. we were adding, we sold some in the summer, overweighted industrials and bought them back as they got sold off in the year. we don't turn over our portfolios very much, so these are at the margin kind of trades. brookfield, a member of the shadow bank world, that's what is really driving the share buybacks. no trouble raising money, great dividend, great ceo. so we're buying growth at a reasonable price, and we need great teams to navigate through this. so take service now. bill mcdermott was delivering 20% to 30% top and bottom line growth in 2022. the stock would pop and selloff.

we kept adding to it and they're taking i.t. spend away from other vendors, and they're in the sweet spot of generative ai cloud computing. >> let's check in with the two-year note auction with rick santelli. rick? >> yes. we just got 66 billion two-year notes. we've never had more than 60 billion ever auctioned off in this maturity, although from january through october 2021, due to covid issues, we did do 60 billion every month for ten months. this is the first time since, as i said, it's never been bigger. the yield, 4.365%. where was the unone issue marke? it was the same, 4.365. we don't add or subtract for pricing issues. the bid-to-cover was the only thing under ten auction average.

everything was else was better. so the grade b as in boy. we did get a little bit of buying after the auction ended, but basically, we're at the same place right now, 4.40 yield. and do keep in mind that 61 billion tomorrow, we've never auctioned off more than 61 billion in 5s. the size of these auctions is bigger. it's been a huge part of why we're paying so much extra attention to auctions, and if you want to pay extremely close attention to something important, continue to monitor yield curves as long maturities seem to be more stubborn than short maturities outside the last several day where is two-year notes seem to be one of the buoyant issues, especially yesterday. back to you. >> you draw attention to the fact that these numbers, in terms of the size of the auction, has never been exceeded before. but is -- they may be exceeded now, given the amount of debt we

have, or maybe this is the new normal we should continue to expect auctions of this size. >> i think at this point in time, this is the new normal. i would look for 60 billion in slightly over 60 billion in 5s to be the new norm, at least for a while. maybe through the rest of this year. we have one auction basically every month in terms of these short maturities. and i simply don't see us borrowing any less in the foreseeable future. >> all right. rick santelli, thank you very much. andrew, any reaction to what we just saw in the bond market? >> i think the fact that the two-year yields are saying high is a sign the economy is strong. the yield curve inverting is not a negative, but what it reinverts because the two-year is plummeting, that's when i will get nervous. that tells me maybe earnings won't come through. so when nancy said she liked growth and value, i agree with that in terms of our positioning. what i didn't hear is the more

defensive stocks. so if the economy remains strong, you want to own some. that's our you product is positioned, growth and value, less so on the recession is coming positioning. but maybe later this year, it might. >> u.s. corps is the fund you run. some of the companies you like, crh and united realms. >> so the crh and united are industrial companies that we here will benefit from the infrastructure act, right? crh is relocated from ireland to the u.s., so it could get some multiple expansion. and amerprize, all this money has been in the money market. as that moves out to other products, whether it's fixed income, equities, there's higher margin in those assets. so i think the wefalth managemet business could be very lucrative, because so much is hidden in money markets.

>> you're nodding there, nancy. >> i do. and i would just add that we think technology are the new defensive names. the valuations are not wacky. if you look at the '90s, microsoft was trading at 51 times peak earnings. today it's trading 30 times. it's a much more robust company. so we're underweight consumer staples, and have been adding to reits and health care. but in general, i think you still want to be on the side of growth at a reasonable price. >> both of you think that there is a possibility, and just be ready for the possibility of a correction. >> uh-huh. i hope so. >> you would see that as a point to buy? >> absolutely. >> you tell me what's going to cause that volatility. i'm sure it's coming. so one of the things is when the fed changes policy. i think inflation could get stickier. it's coming down now. it's easy, because year over year numbers look good.

but maybe we'll start to realize in the summer, inflation is not going back to where it was. i just know this is going to be a tougher year, because last year was pretty darn easy. >>i think a lot of people were talking about, people remember high inflation. it has a sticky factor in your head, number one. number two, prices aren't coming down, they're just not growing as fast as they used to. so people -- you go to the grocery store, lots of places, you're paying a lot more. >> correct. and don't forget wages. i was on the phone with a cfo of a company the other day who said i'm going to raise my wages 5% to 6%, and health care costs forever. so i think that's stickier. i think food inflation -- >> i think we have to worry about shipping costs and oil reigniting. so we're worried about that and a lot of things, as i know you are. >> that's what you're paid to do. >> that's what i tell my clients, let me worry for you.

you have to be anticipate bring this market is moving. and i don't think you can discount the value of generative ai and cloud computing, still in early stages. this earnings will be important to see how much is being monetized within the technology companies. and the old economy companies that are employing the tools that drive generative ai. >> a couple of stocks, johnson and johnson with a large settlement with the talcum powder case and tesla. let's talk tesla first. >> tesla is a tham that is a technology company opposed to an auto company. if you think about all the data they're grabbing, and even google, i live in arizona and i see one every day and i drive a third of a mile to work. they're all over the valley. as you are accumulating data, that's super important. what we have learned is that people want to own teslas, not evs necessarily. so while we expect that the margins are really important and

they have been coming down, what we'll look for is guidance on the top line as we move forward from here. that's going to be -- i expect it to be volatile. we have room, though, because we picked it off last january early, so it can come back and we would be okay. >> there it is at 200 about a year ago. can we look at a one-year chart on tesla? >> i think we got it at 104. >> j&j? >> what a disappointment that company has been, but they're really -- at one point they were the largest biotech company with all this other stuff around it. now they're going the get a settlement down, and then we'll turn our attention to how does this grade as a pharmaceutical and biotech company, but it's been a slog. >> andrew, final words of wisdom for this year of 2024? >> we have never had a down market when a president has run for re-election since 1940. >> never a down market, when a president has been running for

re-election? >> since 1940, the start of world war ii. >> investors better hope that biden doesn't pull out. andrew, thank you very much. appreciate it. nancy, good to see you. coming up, netflix earnings out after the bell, and wall street is looking for answers on the streamer's advertising plans. we have the numbers and the narratives to know, next. plus, american and british forces carrying out new air strikes in yemen in response to houthi attacks in the red rsea. we'll talk more about it. we will look at the numbers and the fallout for especially retailers. "the exchange" is back after this. [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond.

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with the largest fastest reliable network. give your business a head start in 2024 with this great offer. plus, ask how to get up to $1000 prepaid card with qualifying internet. welcome back to "the exchange," everybody. netflix shares slightly higher ahead of fourth quarter results after the bell. julia has a look at the numbers and narratives to know ahead of that report. julia? >> well, tyler, netflix shares may be pretty much flat, but they have been on a bear since the last earnings. and now there are high expectations for another quarter of accelerated growth. the company is expected to add nearly 9 million subscribers is, pretty much in line with last quarter's massive subscriber beat. while the company projects revenue growth will accelerate to 11%. analysts expect earnings per share to leap from 12 cents to $2.22 this quarter. this growth would reflect

ongoing success with the crackdown on password sharing, as well as the upside from advertising. after netflix said earlier this month that 23 million monthly viewers had chosen its ad supported option. this comes as just this morning netflix announced its biggest move into live events with a ten-year deal with tko to stream wwe's "raw" next year. so we're sure to hear more tonight about netflix's investment plans, both in sports and also in live. tyler? >> julia, thank you very much. stick around, our next guest says the netflix deal with formula one is any indication, the ad space around the wwe deal will be as soldout as the arenas for the events. let's bring in mark douglas. mark, welcome. good to have you back with us. i see in my notes here, this

netflix deal with allow them to tap into wwe's intellectual property. i'm having problems with the word "intellectual" and "wwe" in the same sentence, but this is a good deal for netflix. >> yeah, i think it's a fantastic deal for netflix. i assume they mean by that, that, you know, the open sequence at wwe is very scripted. but i think it's a fantastic deal. it demands -- the demand for sport entertainment has been huge. you mentioned some comments a minute ago what netflix did for formula 1 in terms of increasing awareness of the sport, interest in the sport, and quite frankly the value of the sport. i think the exact same thing will happen for wwe. and on top of that add verytizers are going to love it. they're always looking for more sports content. it's a perfect fit. a fantastic deal for both companies. >> julia, in the old world, we

used to look at the advertising budgets in presidential election years and olympic years and say, these are going to be better years for ad spending, because those properties are out there. does that still hold true? >> well, i think there's certainly going to be a certain spending around the olympics, that's always true. this presidential election will be interesting, because we might see less money spent on the primary races, given that is shaking out so much earlier in this republican race. so we could see perhaps not as robust in the primaries, but who knows what's going to come in terms of the presidential election? there's always a jump in ad spending around these big elections. but what i would point out here that's so interesting, when it comes to netflix, it has the opportunity to not only take tv ad market share, but also because of the targeting a and the ability to buy as we have seen in all these streaming platforms, all these streamers

are competing for ads from the major platforms such as meta and google. so i'm curious what mark thinks about this. but the question is how netflix shakes up the space, maybe how it and amazon, which is also offering ad supported streaming, go after both of those key ad categories. >> mark, pick up on that. i point out that one of the things you say is that the death of broadcast ads is underway. you've got the streamers who are playing in this area, whether it's amazon or apple or netflix. you've got the internet platforms like meta and google and youtube playing here. so inevitably, the money has to come from one place and migrate to another, right? >> in terms of tv dollars it does. in terms of -- let's call that traditional versus digital advertising. traditional is broad cast, it's up front and things like that. increasingly, you're seeing digital advertisers move over to

tv. they're doing that via amazon and nbc. they are bringing new dollars into the market. and amazon in particular has gotten really good very, very quickly at getting those dollars. and netflix is a bit behind there. they built the ad business in much mof of a traditional model. but they'll start to catch up. so netflix will have a good year. amazon will have a great year in terms of the advertising. so it's exciting times, a lot of change. >> mark, is sports really, umm, the tent pole for these streaming companies, or can it be? we saw peacock do very well with a streaming game, i guess it was the freezing game a couple of weeks ago. amazon seems to be doing well in its football coverage and so forth. and here the wwe comes in. is that where some of these platforms are going to build their advertising business? >> yeah. i think in terms of when

advertisers want specific shows, there's just tremendous demand for sports. it's the nfl, it's -- i think, you know, wwe will fit into that category. olympics, stuff like that. and so it's just treated as a separate category where all-size advertisers, the big fregest fr the smallest are interested. it's also noncontroversial. so it has a lot of appeal. it's not the only thing these companies want, but it's what you can really hold the line on pricing on, and really always know that there's more demand than there is supply. so that's why you see amazon, netflix and others really investing in sports as a way to grow their ad businesses. >> julia, i see you nodding there. i guess you could say netflix is increasingly going into sports with their documentaries, with this deal with wwe, as well. they've been adding subscribers, partly because they've been

taking people off of password sharing and those folks are migrating in and having their own accounts. >> tyler, you're right about sports. we will see it continue to be true when the nba rights are negotiated in the coming months, because what we are seeing right now is that if you want to sell ads, you want to have must-see tv and content that people must be watching in realtime. and that's what is so valuable about the sports content. the nfl ratings have been through the roof. i think it points to the tact that sports are the most valuable content on television, and thousand the streamers want to have a piece of that, as well. so i would be surprised if the nba does not have some component of its right deal go to the streamers. >> it is good for the leagues, the nfl, nba, nhl, all of them. mark, good to see you. julia, great to see you, as well. still ahead, netflix not the only company with results on deck. we have the action, the story, the trade on texas instruments.

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welcome back to "the exchange," everybody. the markets right now are a little lower on the dow. the s&p basically flat, and you would say pretty much the same for the nasdaq, up 17 points, about 0.1 of 1%. ten-year yield at 1.49. nvidia poised for a pullback according to wolf research. the chipmaker is up 20%, after climbing 240% in 2023. that's a lifetime of returns for me. but the firm says after crossing $600 a share, it is now "deeply overbought and due for a consolidation." for the full story and the other ai name wolf is warning about, head over -- not right now, stay with us, head over to cnbc.com. now to bertha for a cnbc news update. disgraced former new york congressman george santos

appeared in federal court today for a status conference ahead of trial. he's pleaded not guilty to 23 charges, including stealing dentties of donors and running up thousands in fraudulent credit card charges in their names. the trial is expected in september. tokyo electric power company unveiled small drones to use to get a better footage inside of the fukushima nuclear power plant that was damaged from an earthquake and tsunami 13 years ago. at a demonstration today, tepco showcased mini drones and robots designed ed to gather informat inside the reactors. nasa released a new image today from the james webb telescope of a milky way satellite galaxy. astronomers have a special interest in these areas because of their chemical composition, similar to when the universe was

just a few billion years old and star formation was at its highest. you know, tyler, it's amazing when you look at these images how they look at some of the great master images of heavenly beings. >> they're like a piece of art. they really are just beautiful. just beautiful. bertha, thank you. coming up, the red sea attacks are having major ripple effects in retail. we'll tell you which companies have the most european exposure. and speaking of retail, here are three names that hit all-time highs today. all down a little bit. we'll be right back.

welcome back to "the exchange," everybody. the u.s. and the uk carrying out a second round of joint military strikes against houthi targets in yemen overnight. the u.s. has struck several houthi targets on its own after the group has attacked more than 30 commercial ships in the red sea, forcing shippers to find alternate routes, and the street has taken notice with several firms warning about the impact of slower transit times and

higher costs on retailers specifically. joining us is alan bear, a logistic supplier, and stacey w woodlets. welcome to both of you. what percentage of the word's cargo traffic has been affected or rerouted because of this disruption in the red sea, and what has happened to the cost either per container of shipping costs more generally in light of this disruption? >> so overall, there's about 20% of the world trade that goes through the suez canal, and as a result of the military attack or the attack on the vessels, you're seeing prices into the u.s., east coast and west coast, up between 200% and 300% from where they were in october and

november. >> these are shipping costs alone. this reminds us of what was going on during the pandemic, right? >> correct. but here at the height of the pandemic, when you go back to the peak of those, rates were still -- well, it's still high. we're at about 20% of the peak that we reached in 2021 and 2022. >> is most of the traffic that is being disrupted, is it asia inbound through the red sea and suez canal into europe or what? is that most of it? >> yes. the bulk of trade -- europe relies the most heavily on the suez canal for their import and export markets. whereas the u.s. with the panama canal, we are less beholden, in a sense, to the functions of the suez with the exception of some of the red sea companies and

india, for example, is taking a major hit. they're now a shortage of containers in india to service some of their exports back to europe and the u.s. but asia, for example, can still ship by the cape of good hope, even though it's seven to ten daysstacey, let's turn to some f the retail companies that are being affected because of this. name some names, and i guess these would be goods manufactured in asia that are coming into the european market, or moving elsewhere for sale. give us some names being affected here. >> sure, tyler. of course, when shipping goes up, it's like the nervous system of retail shuts down. and we saw that during covid. we're starting to see price come up again. we're starting to see the return of the air shipping, which is more expensive, just at the time we were cycling all of these costs post covid. some of the names that have the biggest exposure in europe, pdh,

you know, u.s.-owned companies, ralph lauren, we're talking about nike, footlocker, 20 plus percent over in europe, h&m has a huge exposure, 60%. so it's -- you know, most of the u.s. retailers have a significant exposure over there. there's some smaller ones like lulu lemon that has high single d digits. nobody is going to go untouched with this, but the good news is, we have our factories unlike covid, and we respect in this insane demand boom for goods where all of a sudden there's nothing on shelves. >> right. let's talk a little bit about how much these companies that have been affected are going to pass on these rising prices or higher prices to consumers, and whether consumers are going to accept it, number one, or whether the retail companies are just going to eat these costs as a temporary expedient to keep

business coming in. >> so tyler, what's so fascinating during covid, prices even for retail brands like ralph lauren, they went up 20% or more. luxury was up 30% plus pricing. and consumers ate it, because they wanted the product. but now consumers are saying to brands, including levi's, that enough already. we're not willing to pay since prices are up so much. but, again, at least now the cost of shipping won't be as much as covid, but i think retailers are going to have to eat it a little bit more this time than during covid, because the demand isn't there in the way that it was a few years ago. >> interesting. i see alan nodding to that. maybe you can pick up on that, and i would observe one other thing. not only does -- obviously if you have to reroute vessels into asia and europe around the cape of good hope in south africa adding to costs, this whole

system is finely calibrated, and it must muck up badly the return routes and where ships are in the world. you don't have the normal -- you may not have ships in the right places, you know what i'm saying here, am i right? >> absolutely. and that's the key right now. for most shippers, importers, exporters, they're looking for the carriers to set up the pattern, even though it could be longer, a little more expensive, in order to maximize and optimize your supply chain and cost effectiveness, you want the carriers to set the route and say okay, these vessel strings are going to go by the panama, these are going to go around the cape of good hope. here's our service pattern. here's your delivery time. here's the added cost. then you can make the calculation. it all depends also on what you ship. the importer of large, bulky furniture is going to pay more or will pay more dearly per

sofa, for example, than someone who ships thousands of items in a container. but i would agree initially right now, i don't think we're going to see this pass through all the way down the supply chain to the end consumer, unlike we saw with covid again, where it may be 20% of that peak. and there will be a more normalization of services as we move past chinese new year. >> all right. both of you, thank you very much. coming up, lumber prices back on the rise, climbing more than 16% over the past three months after taking a breather for most of 2023. what's got those prices climbing again, and the home builders that are already feeling the pinch? that's next on "the exchange."

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welcome back, everybody. shares of dr horton, i always want to call them dr. horton, it's not, falling 9% after

hitting an all-time high. diana is now digging into those numbers. hi, di. >> yeah, and dr horton earnings were a mixed bag. new orders increased 35% year over year, and prices before lower, and the builders are buying down mortgage rates. all of that squeezed margins. so the nation's largest builder reported that material costs did fall somewhat, and material price growth for residential construction fell from a 15% gain in 2022 to just a 1.3% gain in 2023. that's according to the government's producer price index just out. the ppi for soft wood lumber, seasonally adjusted, dropping 2.3% in december, the third consecutive decrease and the fourth over the past five months. but the chief economist at the association of home builders expects prices of lumber to go up, that's why you see the future prices go up.

while lumber prices fell 31% last year, they're still 23% above 2019 or prepandemic levels. now, in other materials, gypsum prices and concrete prices have been falling for several months. steel mill products dropped 16% in 2023, but that was after historic gains in previous years. steel is 65% more expensive than it was, again, right before the pandemic hit. so while prices are falling slightly for the builders, you continue to hear them say those prices are a head wind because the prices are still sitting at such high levels. tyler? >> how much of the rise in prices or prices for new homes is attributable to the rise in input costs or materials costs? and how much is attributable simply to market that end? >> new home prices are coming down, and we're seeing that in the new home sales and what dr horton just reported is that the median price of a newly built home is coming down, because the builders have to lower prices in order to get buyers in the door

because of these higher mortgage rates. how much what you're asking of those higher prices are definitely factored in. that's hitting those marmgen ma is they have these increased prices that are sitting at the higher levels, coming off of them a little bit, but still high. mortgage rates to get buyers in. the question is going forward, when we see the next quarter when mortgage rates are more in the 6% range, then the 8% range, how will that help the builders and their pricing and will home prices start to go up again? >> yeah, we'll find out as spring heats up. thank you, diana. coming up, texas instruments hasn't missed on earnings once, not once, in the last five years. bank of america bearish on kimberly clark ahead of its report. and can at&t follow in verizon's stronger than expected footsteps before the bell tomorrow. we'll get the trade on all three in the "earnings exchange" is back.

♪ welcome back, everybody. time for earnings exchange. we'll talk staples, cell phones today looking ahead to results from texas instruments, kim berry clark and at&t. joining us now, cnbc

contributor. delano, good to have you with us. huge ai surge run up last year. some embracing for a pull back but the company's diversified exposure to industrials along with txn kbroeing ai share. you look this ahead of earnings? >> yeah, yeah, tyler i do. you mentioned last segment they haven't missed on earnings in a wile. i think also mentioned by the note was the automated demand held up relatively well. one thing i was looking at the diverse revenue stream for them is also important to look at here. also diverse end kcustomer base is important to look at. if you look from pre-cash flow basis, they have done really strong and that's also growing. of course, they're repaying shareholders. look at the dividend that continues to grow over the last couple decades, that's why i hold here and potentially buy if there is a dip after earnings.

it's one you want to keep in the stable. >> let's move on to one that kind of couldn't be as different from kimberly clark as you get. excuse me, from texas instruments as you can get. kimberly clark, the paper product purpurveyor. are you a buyer here of kimberly? >> yep, yep, i am a buyer. i think there's a couple reasons why. you mentioned some of the at-risk areas for kimberly clark, higher input costs which is compressed margins and management made a little headway on margin. but if you look from a valuation perspective, i like kimberly clark because their trading at favorable valuation. discount to ten year forward p and also trade discount relative to their peers. those are some of the reasons why i like the company. if you look on their side, they have a diverse product lines

that are actually going i think hold up well if the consumer weakens. these are staples that consumers need. even if we see a weakening consumer, i think they'll relatively farewell on the revenue side and won't have to push too much into promotion to compress margins. >> can't think of a more consumer staple than this. let's move on to at&t. shares are down 10% in the year, up 2% today after verizon smashed expectations for phone ads. at&t trying to mount its own turn around. boy, they're advertising to try to get there. expanding higher margin fiber network, hoping to kmeet with t. mobile's unlimited wireless plan. you're not so optimistic on at&t? >> you mentioned all the advertising dollars poured into this area because as you look at it, it's such a competitive environment. it's hard to get folks to switch and hard to gain subscribers in

organic methods. you look at acquisitions in different areas. those deals are heavily scrutinized. if you're looking for growth, look at safe haven as a stable company. look more price to appreciation growth, it might be an area where you want to be holding pause because of the fact that it's been a struggle for them in that area. so the risk for them, it's really not organic growth a lot of times. it will be inorganic growth, die vesting from some of the areas they were looking at to be a pure play telecom company again. it's one i'm looking at from a distance at this point. >> got to leave it there. thank very much. appreciate it. >> thank you, tyler yrj that does it for "the exchange". >> coming up on s"power lunch" how really agents are looking to get ulbewod buyers in off the sidelines. a car is a car...

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