>> evrg, unusual activity. >> massive liquidity into the system in china. trade deal. >> s&p over 3300 does it for us the exchange begins right now. >> yes, it does, scott and thanks welcome to the exchange, everybody. i'm brian sullivan big show here's what's ahead. wall street may have liked the trade deal but many small businesses across america aren't sold why? because the tariffs are still here we'll look at the other side of the trade deal plus, another day, another all-time high. are investors treating companies on fundamentals or could this just be a fed-fueled rally we'll discuss and debate and a luxury overload, and are we in for a remodeling slowdown all of that ahead when we begin again with today's markets, seema mody and yet, seema,

another record high. >> it's just the type of market environment we're living in, brian. take a look at global markets here muted response overseas to the signing of that phase one deal as brian was saying fresh highs here in the u.s., s&p 500 above 3300 all 11 sectors are high on the day. we want to draw your attention to utilities at a new high, led by a number of power generation companies offered by dividends this still seems to be a rate play at the moment lastly, morgan stanley when was the last time you saw a bank up 8% on the day on pace for its best day since 2012, that's what we're seeing with morgan stanley, delivering an impressive beat on revenue and earnings and raising its financial targets. this, of course, capping off a mixed week of earnings brian, back to you. >> seema, thank you very much. many companies cheered the signing of the trade deal with china yesterday. one group that wasn't so enthusiastic are the small and

midsized domestic companies around america for the past year, this show, the exchange, has talked to lots of small businesses and their owners who shared the impact that tariffs had on them here is what some of them told us after the deal. linn le, ceo of society nine said, quote, this deal has yet to be confirmed and has a lot of small businesses holding their breath dan diore says the agreement leaves us in the same place we were before. it's a disappointing outcome and arnold kamler, kent international, the bicycle company says while we are pleased that the phase one deal represents a step in the right direction, there are many questions not answered here as answered united states chamber of commerce, neil, i'm sure your phone, email, pager, whatever you've got, was blowing up

yesterday with all your constituent companies calling you. what are they saying about the signing of the deal? >> well, thanks for having me, brian. our phones have been blowing up, our emails as well most of our members, and we're proud to represent millions of small businesses across the country. they recognize this for what it is phase one in what has to be a multi-phase deal the good news is that the threat of additional tariffs are off. some of the current tariffs have been reduced in terms of the amount that's being collected, but we still have tariffs in place in a large variety of goods that we import the most important thing is phase one moving to phase two. and in phase two, we can really tackle the key fundamental problems that are driving this trade dispute, the intellectual, the state subsidies that create an unfair advantage for chinese companies over american companies. and if we can resolve those, we can remove the tariffs put in

place. that's the ultimate goal and we took a step forward toward that. we've got a lot of work to do. >> listen, i'm sure i could pull 500 companies and they would say we want the tariffs gone your offices are pretty much right around the corner from the white house. we've got the capital building over your shoulder you're dialed in, neil any indication of when these tariffs might get killed >> well, when we can come to an agreement, right and so our job at the u.s. chamber is to push to get that agreement sooner rather than later. that's why we look at phase one as a step toward getting there the second the signatures were inked on phase one, we began working on how can we get to phase two? we're encouraging the administration to engage with china immediately. we're encouraging the chinese to live up to the commitments that they made yesterday. and the more we can work on t s this, the more we can resolve some of these issues, the quicker the tariffs can go away. that's ultimately our goal our goal on behalf of our business members, our small business members is to get rid of these tariffs and solve the

fundamental problems that drove this dispute in the first place. >> listen, you guys, you have been pounding on the president and his administration, and i'm sure everybody in that -- our former colleague, larry kudlow are they telling you it's likely to happen sooner than later? are we getting any word that that is something that maybe, neil, is on the table? >> yeah. i think the administration understands what a priority it is they understand the implications for the economy. the economy sin credibley important. economic expansion everyone shares the interest in getting this resolved. that's going to be tough we should be realistic about the challenges we face ahead it's worth noting today the senate passed usmca. it took us a long time to get to that point, too, longer than we wanted at the u.s. chamber but

we got it done and restored certainty for americans who rely on a trade for between the u.s., canada and mexico for their jobs, including small businesses we can get the china deal done, too, we just have to keep our shoulder to the grindstone. >> neil bradley, important topic for hundreds of thousands of companies across america thank you. >> thanks for having me. >> let's stay on this and dive deeper into one of the areas that have been impacted big time on the tariffs, retail president and ceo of footwear, steve, what are your companies saying about the signing of the trade deal same thing we're glad it got done, glad it's not getting worse, but we need these tariffs done? >> we're certainly glad it's not getting worse but it's 96 pages of a trade deal and tariff elimination isn't in there at

all. all the goods being tariffed the day that the deal was announced will be tariffed on february 14th, 92% of apparel, 53% of footwear, all bags, hats and gloves they're all still facing tariffs. these are high tariffs this isn't monopoly money. this is stuff we really have to pay the u.s. government. >> and we look across the spectrum we've got this usmca signed as well, at least in the senate passed and it's interesting because at the same time on this trade fight, we get backed off on a little bit we've got this deal now in place with mexico and canada does that reduce the sting at all, kind of the aloe vera on the wound of the tariffs does the usmca help one bit? >> we're thrilled it was passed by the senate today. we've been encouraging the administration to implement it as soon as possible, and it does give us a good shot at predictability we have a couple hundred

thousand jobs in the textile, footwear and apparel industry, that provides us more predictability and we're pleased to see that moving forward it doesn't remove the cost that we encounter when we do business with china those are real dollars and that results in price increases for american consumers. it results in companies not being able to invest in manufacturing, invest in innovation you have to pay the tariffs, taxes to the u.s. government, we can't use those resources to pass those on to consumers. >> how are they doing otherwise with the economy >> they're doing great we see the stock market at record highs tariff mitigation is the name of the game people are being very creative to try to avoid these tariffs. it is a cost it's a cost we don't want to have to pay. >> do you think that the signing of the phase one part of the deal -- if you've got a company, member company, steve, that was thinking about taking their supply chain out of china, to bangladesh, vietnam, mexico or

the united states, do you think they reverse those plans now, or should they go ahead and try to diversify that supply chain because you never know where this is going to end up? >> yeah. we keep telling our members it's time to continue to diversify. that's what our members are telling us perhaps people were over concentrated in china, but companies are looking at other sourcing venues, really, around the world, realizing that, you know, they don't want to move out of china where they've got good quality, good skills, good capabilities, good efficiencies, but there's a lot of uncertainty about china. remember, the phase one deal, not only does it keep tariffs in place, but it uses tariffs as an enforcement tool like anyone else, we want to hold china accountable we don't think taxing our own citizens is the best way to do that. >> steve lamar, appreciate your views on this as well. thanks so much. >> thanks for having us. >> don't go anywhere here is what else is coming up on "the exchange." coming up, the markets continue to hit new highs almost

daily. but what's really driving these gain gains? are we actually in a fed-induced rally? >> plus, is tesla's run about to hit a speed bump and home remodeling spending is expected to slow this year. a look at why and the names it could hit. oh, your mom just texted. she's landed. and she's on her way to our house. this is "the exchange" on cnbc t. start the coffee. set the temperature to 72. start roomba. we got this... don't look. what? don't look. lets move. ♪ mom. the lexus es, eagerly prepared for the unexpected. lease the 2020 es 350 for $389 a month for 36 months. experience amazing at your lexus dealer.

check out this chart since september, the fed's balance sheet have basically moved higher in lock step. you really that's about when the fed, three or four months ago, began lowering rates while putting billions of dollars new in the financial markets, in part, through its operations in the repo market. which is which it doesn't matter. the point is, they're tied together, it looks like. the question is this the rally is good. we're all making money is it because only of the fed or fundamentals still at play join i joining us now is andre garcia-maya. when i mention this chart, john,

you rolled your eyes you wanted to throw something at me how much of this market run is the fed? 100%, 0% >> it's never just one thing, right? like i said in the break, i can make a chart two things, compare two things and make it look bull esh or bearish, just by changing the timeframe, the number of days, whatever. >> that is not what we did there, by the way. it's a three or four-month chart. >> obviously the fed injected liquidity because they're afraid of repo hiccup whether all that money that they were putting into the repo market went into stocks, i doubt that very highly we have a sea change in the fed's attitude that you see bloomberg quotes every day saying we're going to let inflation run above 2% now, that is a huge change from prior feds, right? and prior monetary policy where 2% was always seen as a ceiling. that's actually forward guidance that is just starting to get into the market, right

they're thinking the fed is going to -- will they really let it go through 2% it's not even close to 2% now. not only are we not going to stop at 2%, we're going to let it go through. that means no rate hikes really until we get above 2%. if you take them literally at what they say. >> somebody said, andre, why does this repo stuff matter for equity markets i'll give you the worst sort of analogy. it was the best one i could come up with. you're going out to dinner with a friend you take 100 bucks you think you're going to buy. your friend buys all of a sudden you've got $100 of money you cannot spend. you can spend it on something else and these actions in the repo market in some ways are freeing up cash for the big players on wall street the fed bought lunch. >> that could be the case. you could take that 100 bucks and save it as well, right that's where the animal spirits have to be around and there has to be that momentum for people to say actually i kind of want to spend it, because my neighbor

also spent their money and they have a new tesla that's where the animal spirits still have to be around and from that respect, that's part of the equation, right? the fact that we had such a strong year last year and the fact that we're not seeing that recession that everyone is talking about, the more people think maybe, you know what this could go on for a much longer period. one other thing i would add, that i think the market is trying to smell about this year, is that the global economy could actually see some reaction el ration in that first quarter versus last year, especially in the second half of last year it was actually decelerating that's part of the equation that the market is trying to -- >> 90 central bank cuts. >> some fundamentals at play >> one more thing you have to look at when you're looking at your beautiful chart is that the flows do not correlate well. the flows are going into bonds and money markets.

>> 75 billion. >> equity flows are net negative, okay >> really, overall >> yes overall. i'll send you the chart. >> we love charts. i'll see your chart. >> therefore the correlation you're making is not really working right now. but as you said, emerging markets are picking up we have global mmt, right? modern monetary theory taking hold where everybody is deficit spending, even our own budget deficit is off the charts. but nobody is talking about that, why? because of the great recession and financial crisis and they'll do anything, including our own fed, because right now we cannot cut rate. >> okay, my friend nrkts battle

of charts, i do not need a chart. you mumbled it there, someone is buying stocks are going for a reason, there's more buying pressure than selling pressure. someone is buying. >> so in 1500, it's a lot different. >> i know. we did it. >> 20 to 25,000 on the dow is a 25% move, 25 to 30 is a 20% move who is doing the buying, do you think, right here? mom and pop, hedge funds >> there's enough buying in the markets at all-time highs, right? another thing to look at is earnings as well. >> we haven't seen it, right. ♪ fact that we have negative earnings growth in the market at all-time highs is telling us that the investor is okay with

some pain last year as long as we see earnings this year. >> we're still in tina, right? there's no alternative where else are you going to put your money, bonds, credit? >> no. >> equity markets have done great. it's a good discussion we'll get you back on with all your fancy charts. dancing with the charts. >> 20th anniversary, 20 years of charts. >> fantastic john, thank you very much. andre, thank you very much good discussion there. on deck, this stock soaring on strong holiday sales, up 40% today. the name and whether it will continue to shine. that's a hint. plus despite those record highs for stocks we just talked about, something surprising is happening in housing the story is and the moves behind it. catch nbc live while you're on the go, cnbc lap download it if you have not already. we're back in two minutes.

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welcome back breaking news related to the baseball sign stealing scandal what have you got? carlos beltran is now out. he was the only player named in those reports. this is now the third manager who has lost his job as a result of this houston manager, of course, was fired and alex cora, boston red sox, was a bench

coach on that team, and now carlos beltran had just been hired as the mets manager. he hadn't managed a game yet will he be hired and fired because of his actions as a player. >> pitchers and catchers, you're basically losing a manager with a month to go and trying to figure out, who will run the team i don't want to put you on the spot, what about the rest of the mets front office? the gm is only beginning his second year now. >> stevie cohen eventually will take over as the majority owner of the mets from the wilpons from ownership you have a transition situation there it depends on who has the power right now. is it the wilpons, cohen who is calling those shots we reached out to the mets a few minutes ago and had no comments about any of this. >> the ownership is not in flux but certainly multiple parties

might have multiple points of view no manager for the mets a month before spring training things are not looking up in queens, eric. >> they never were, brian. this is the story of the mets, right? >> you said it eric, thank you very much. carlos beltran out before ever coaching one game with the new york mets. airlines, trucks and custodial banks are your top stock stories right now. here are some of the movers at this hour. shares of spirit airlines up 8%, fourth quarter guidance that showed revenue for available seat mile declined less than some expected. shares of warehouse and delivery service company xpo soaring up 11%. ceo brad jacobs telling "mad money's" jim cramer, a spinoff or more of some of its businesses new york bank melon, worst performer in the s&p 500 right now, as they report revenue in the last quarter that fell short of expectations. core expenses were higher than

expected. all right. cnbc news update right now for that, we go to sue herera. sue? >> thank you so much, brian. here is what's happening at this hour, everyone seven house democrats led by adam schiff making the solemn walk across the capital for the second day to open the impeachment trial for president donald trump mcconnell criticized house speaker pelosi while senate minority leader schumer again argues for witnesses. >> well, nothing says seriousness and sobriety like handing out souvenirs, as though this were a happy bill signing instead of the gravest process in our constitution. >> a trial without witnesses is not a trial. a trial without documents is not a trial. that is why every completed impeachment trial in our nation's history, every single one that has gone to completion, 15 have all included witnesses.

>> diplomats from countries that lost citizens in last week's air disaster in iran honoring those victims today in london. they lit a candle to commemorate the victims. iran's military admitted to downing the plane, killing all 176 people on board. you are up-to-date that's the news update this hour brian, back to you. >> sue herera, thank you very much. here is what else is coming up on "the exchange. >> announcer: ahead, cigna shares shine california is causing tesla problems pizza is king in delivery. and the new financial crime that's hitting banks it's all cinomg up on "the exchange." technology company that provides data and analytics driven solutions and services. change healthcare is thrilled to be joining the nasdaq family. every day we are working on behalf of those who expect more from the healthcare system. our customers and partners push us, inspire us,

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diamond in the rough and pizza's slice of the delivery pie keeps getting bigger today's rapid fire here to break down the stories and headlines, kate rogers, phil lebeau great to have you on set. >> thank you. >> morgan stanley trying to drive down the stock new tesla registrations fell

the massive drop due to a rollout or rollback in the tax credit in the bellwether market, this could be a troubling sign for the company. to top it all off, morgan stanley's analyst downgraded the stock questioning the stability of the momentum. phil lebeau, i'll start with you on this one. do we know why the registrations dropped off? >> i have a conclusion it's wrong, in terms of its just the incentive following off. when they started making the model three, that's what you need to look at, they first filled orders in california. as they have expanded around the world -- and, remember, they're supplying the world with the exception of the beginning of china right now, they're supplying the world and as they're supplying other areas, they're going to be selling fewer in california. >> so you think it's a measure

of where the registrations are. >> correct. >> should have looked globally or at least across the united states >> that's why we go with the delivery numbers, a global number we have the graphic right now. it basically shows that they hit their target of 360,000. occasionally, you will see stories like sales have fallen off in the united states and tesla. that's because they're supplying europe or other countries around the world. as they have expanded where they are supplying the vehicles, certain markets close to home, california, are not going to see as many deliveries in a particular quarter or half a year. >> and, robert, listen, the downgrade from jonas at morgan stanley i understand it's a downgrade. if you look into it, he's still bullish on the core auto side of the story. it's more about the mobility and price of the stock. >> they've added 40 billion or more in market cap over the past month and yet aside from china, which was a huge announcement, but expected, there hasn't been anything brand new, surprising about tesla to add that 40 billion.

my question to you, phil, is with these tax credits going away, that is a meaningful dollar amount. >> yes, it is. >> what percentage do you think off sales will that -- especially because a lot of people went into it to rush to buy. so you will get that lapping effect that will see a decrease. but over time, how meaningful do you think that is? >> they are the brand when you talk about electric vehicles i have yet to run into somebody saying i'm thinking about buying an electric vehicle. i was thinking about -- when people say i'm thinking about an electric vehicle, i'm thinking about tesla, and that's it. >> i did see an e-tron on the road, an audi. by the way they're not getting great reviews. >> no. >> it may be pushing people back -- >> tesla has become to electric vehicles what kleenex has -- >> it's the verb i'm going to google it, i'm going to xerox it.

shiny, gold stuff. signet the jewelry retailer reporting holiday sales of growth of 1.5%. doesn't sound like a lot it was better than most analyst expectations, raised their fourth quarter guidance. shares of signet left for dead not long ago, speak iing of shot sellers. today they're soaring, not a misprint, 33%. some of that, arguably, is short covering let's bring in courtney reagan to talk about this maybe diamond in the rough courtney, online sales up, proving people don't just buy commodity items, they're buying expensive or relatively expensive jewelry online. >> when blue nile started i thought who will buy diamonds online but guess what, they do. this was the first strong holiday season that signet had basically since 2015 it was really a shock to see same-day sales up, when analysts were thinking they would be down 2% to 4% we talk about signet of course, those are the mall

jewelry stores, the zales, the kay, piercing pagoda you have some divergent stores within those that's a big blow it out of the water number. >> what do you think they're getting right about e-commerce that was my takeaway the e-commerce number is so big, up over 13%. but they are the mall jewelry store at a more discounted price, too, i might add. >> yeah. >> what do you think they're doing right to make consumers make the move online >> couple of things. they've had more targeted marketing. look, it sounds sort of like how can that be the answer to cut through the noise, you have to have really good marketing to get people to go to your site because of all the choices we have. they have product newness, they called out specific campaigns that did pretty well that were new. the quarter before, they have a lot of promotions running that they needed to, to move the needle and get people to buy they didn't have to do it this time the company thinks it's because

of the marketing and the newness. many of them are in the mall that was interesting. >> you and i talked about this earlier in the hallway, which is all the best conversations. >> that's true. >> which is, do you wonder if the stock market's record high is having some kind of positive effect on things like signet your 401(k) is up, your savings is up. i've been look at necklace. >> why not >> i'm going to treat myself or my family member because i feel richer. >> that could be part of it. holiday retail sales. >> what we heard about jewelry, is that the whole jewelry sector is struggling because younger people, millennials are casual, don't like jewelry yet they're overcoming that. not only with jewelry but with the mall. >> the other thing i'm wondering trend wise, is jewelry a more durable retail purchase than an extra sweat er or clothing

>> pass it down. gold is gold. >> that's it. >> as long as you don't lose it. like an air pod. >> does it feel left wasteful as we talk about recommerce, reselling? >> you're buying an asset. >> and to your point about people potentially feeling better and waiting to make these bigger purchases. >> pass it down. courtney, great discussion. >> thanks for having me. hallway talk. >> she went to jared that's her husband's name. 3:00 p.m. tonight, ceo of signet will be on to talk about those stellar holiday sales numbers, company's guidance going forward and how many people are willing to buy necklaces and jewelry online apparently a lot from grub hub to uber eats, the way you get your food delivered has changed dramatically over the years. one thing that's not changed is what you're ordering online. according to npd group, pizza, still the most ordered item in the united states, historically dominos has been the leader. papa john's started to rally a bit here, kate this is right in your pizza

wheelhouse, if you will. >> yes. >> do you know why pizza comes hot and fresh. >> it does. >> as long as it's hot. >> well, so, the papa john's move, obviously there's a lot of excitement around rob lynch, who the company brought in after this john schneider and then -- >> debacle. >> he came over from ar by's there's a lot of investor excitement about him domino's still has about 18% of the total quick service pizza market share, according to qsr they're a trade publication. regional chains, 52% pizza hut, little caesar's, what have you, those are about 30%. domino's is still the leader they're not working with any aggregators, doing it all in house. >> maybe that's why they're winning. >> you can argue either way. >> without all the control, the heat shield and -- >> that is his entire goal in keeping this in-house, is the quality control from start to finish it's our product don't forget, they're doing this operation.

>> what's that >> opening up more stores closeer together so you have a domi domino's closer to you in your neighborhood so the delivery time shorter, the pizza is hotter when it gets to you and it's working. >> whether it's uber eats, grub hub, there's no consistency there. sometimes i've had meals delivered, great other times you get look a burger and fries. >> it's an hour and a half later. >> fries are terrible. >> half gone. >> in my neighborhood some are half gone. >> the restaurant doesn't care that's the issue. >> it's the quality control of the pizza coming in. >> correct. >> domino's, the genius move they made from a business perspective, when you order on your phone, you can see where it is. >> track it, yeah. >> it came out of the oven it's on the road my kids sort of watch it all right. the rich are renting at higher rates and developers are trying to keep up with that demand, according to real page, builders are on track to finish more new apartments this year than in any year in three decades, adding a total of 371,000 units to the

market of those apartments, nearly 80%, robert, are luxury rentals, a sign that the rich are nervous or don't want to pay these inkr incredible numbers that are going around cities like new york. >> it's a sign of two things one, just to build over the past five years in any city costs you so much money that on a per square foot basis you have to make it a luxury unit to make money, whether it's 2,000 a square foot or here in new york, $6,000 a square foot to break even on a development. it has to be luxury. secondly, there's so much inventory for the rich that they don't want to buy right now. they think prices are going to fall there's so much choice the wealthy are camping out in these rentals until the buying prices fall. so, there's just a huge amount of supply. >> i think the word "luxury" is so overused. let's be clear. >> top market. >> you can reach out and touch a highway, the lincoln tunnel thing going. luxury homes there's a -- >> it has an onyx bathroom so it's luxury. >> four feet seriously, is there any sort of

qualification standard >> yes. >> for calling something luxury? >> traditional definition is top 10% of the market by price. >> i thought it was so interesting in reading this that on average it's about $500 higher a month in new york and in l.a. 800 a month higher. >> yeah. >> what's your take on this idea that it may encourage those who are higher end of middle class to move up to luxury housing >> if they can afford it it's not the answer for the real problem in this country, lack of affordable housing. >> awesome city, by the way, look at the south side of the city every time i go back to chicago there's six new buildings. are they full? >> you know what i can knock door to door next time and find out for you. >> grub hub. >> there you go. >> in your tesla, delivering pizzas, phil. >> i think they're full. i do not see reports of them being empty. >> we never talk about chicago

i try to throw the great chicago. >> there's a lot of air bnb rentals in my building which i don't consider to be a super high end. >> you live in new jersey. >> yes. >> it's borderline illegal in new york. >> i think people are still doing it. >> they still do it. >> shhh. >> quiet, no neighbors. >> nike's vapor fly, was the shoe too good to be true carried various athletes to 19 top finishes, six world marathons across the world and now world athletics is planning to ban that shoe, apparently for giving runners what they view as an unfair advantage. and there's actually some stuff here, phil lebeau. if you look at it, apparently -- >> are we supposed to look at these notes before we come on? >> no. >> yes, you are. >> no. >> redistribute the offset from 11 meters to 8 millimeters to help maximize the energy return at the critical toe off. >> uh-huh. >> they actually have science. >> sure. >> yes hey, i'm bummed that they're

going to get rid of these. i enjoy seeing this new technology that you can make an argument that is artificially helping out runners or sprinters, whoever it is it's just like when they add the ultra fast swimsuits and they ultimately banned those. i love seeing it. >> it's a fine line between technological innovation and mechanical doping. >> right. >> and the question is because these shoes cost over $250, are you giving a mechanical advantage to those who can afford those shoes and, therefore -- >> that's what i was going to say, why don't all these athletes just buy their shoes? if you're a top athlete, though, you're not buying shoes. you're getting shoes. >> amateurs had 4% better. an amazing amount of time when you're talking about marathons or any of these things. >> the psychological effects believing that the shoe makes you faster how much does that come into play >> let's show the shoe again it doesn't look like much. apparently it's the material

that's in the sole. >> you know what amputee runners wear, the blades >> yes. >> that's what this is, mini carbon fiber blade inside the sneaker that gives you that spring that allows you to run fast. >> looks like the front of the dreamliner paint job, phil lebeau i like it. phil, great to have you on set thank you, kate. thank you, robert. >> thank you. piecing together bits of information to form frankenstein like identity. sounds like something out of a horror story very real for smaller financial 'lstitutions, very painful wel talk about the frankenstein fraud coming up i can. the two words whispered at the start of every race. every new job. and attempt to parallel park. (electrical current buzzing) each new draft of every novel. (typing clicks) the finishing touch on every masterpiece. (newborn cries)

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okay, guys, the bus is down, but we've got a spot! follow coach kevin. let's go, guys. sorry again that we're fully booked. this is the best we could do on such short notice. this is amazing. thank you so much. (announcer) treating others like we'd like to be treated has always been our guiding principle. apparently many criminals are taking the page out of mary shelly's playbook, piercing together identities ala dr. frankenstein, to defraud financial institutions

more with this horror story, kate rooney. >> it's official name is synthetic identity fraud, the fastest growing and one of the hardest financial crimes to detect so, instead of stealing an identity, a criminal makes one of these frankenstein i.d.s up, randomly pick where they can buy a social security number and link other fake information like an address, for example. they slowly build credit over multiple years finally they open accounts with financial institutions, take out loans with no plans to pay those back i spoke to one federal credit union in indiana that was caught off guard by synthetic fraud they ended up with $200,000 worth of losses, a major hit for a small lender some in silicon valley are taking on the issue. i spoke to one founder he says these fake people can show certain erratic patterns. >> they'll be moving around quite a lot, aggressively growing credit in many cases we even see fraud rings that have produced a number of synthetic identities, like 100 of them, all of whom

who behave in the same unusual ways we can differentiate the identities that are real, regular people like us, from the synthetic identities that have been fictitiously created. >> hitting lenders to the tune of $2 to $3 billion a year as for how somebody could get away with using a real social security number, i'm told it does raise red flags in credit bureaus but they're often seen as human errors since the rest of the profile doesn't match lenders often write it offs a credit loss, brian. >> everything is getting easier, faster, more mobile, are we seeing more synthetic fraud because it's numbers behind a computer or phone screen >> exactly that's great in some ways that this process is getting easier and faster but experts i spoke to say that's also adding to the possibility for people to take advantage. you also have this economic boom we've seen, and lenders loosening credit so it's been easier for people

to get loans which, again, could be a good thing. but they're doing it faster and experts say that's one other theme that's adding to this. the last part of this, of course, is data breaches it's easier to buy information on the dark web. one of the tactics that they use is buying the social security numbers of younger people. so, minors, if you have a social security number of somebody under the age of 18, they definitely won't notice until they go to apply for credit. that's another team we're seeing. >> taking kids' social security numbers, unbelievable. kate rooney, unmeevable story. thanks for bringing it to us see you soon. >> housing market may be heating up overall, but remodeling appears to be cooling off. why? and what it means for the real estate market and the likes of lowes and home depot we are near session highs. dow up 184, .6% gain, more new records. the markets and their juggernaut seemingly unstoppable rally.

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welcome back there is something rather unusual happening in the the housing market

it is heating up right in the dead of winter on the east coast. however one corner of the market is showing signs of weakness diana olick has more on the remodeling side of the story >> reporter: that's right. home remodeling is actually pulling back people usually remodel sometime in the year after they close on a help ome, so sale last year w lower and so that means that remodeling will barely grow this year according to a new report in 2018, just as a comparison, remodeling growth hit 7% and spending will start the year at an able rate of about $326 billion and not go much higher than $333 billion by the end of the year and this could hit stores like lowes and home depot if sales are more robust this year, that will push remodeling

spending higher, but right now, a severe shortage of homes for sale is in the way but the shortage continues to keep some potential buyers in place and the longer you say in the house the more you tend to fix things that are broken >> all right, diana, thank you very much. and despite the forecast of the slowdowns in renovations, our next guest still favors some of the building product stocks here to explain is equity research analyst and you heard die annuanediana'. is that ill for all the home remodeling companies >> we agree with the idea thati positive rate. i disagree with their baseline i think that it is too conservative we do think that the main factor driving remodeling spend is home prices and in fact we're starting to see home prices in-flekin

indiain in-flekt if you look at industries like core logic >> and ams, you call it the rmr. because it is all about the stuff like the paint and the plumbing >> right and so what we have, remodeling yes historically it had high correlations to housing turnover but we see better correlations when we look at home price appreciation which is improving. that is really important because what we have is an older wealthier ownership base following the housing crisis and they are in older homes. so we are seeing remodeling. we do like lower ticket items such as paint and plumbing >> and you like also top bld, i don't even care what they do because i'm looking at the stock chart and it is on which the cha charts and you still like it. >> we do this is a bit of a hybrid.

residential is 80% of their end market so we think housing is growing and they have a trifecta of operating leverage they should get price on labor, increase in produce duk proper d and this bodes with he will for them >> and you are a-okay. thank you, ken and we're just a few hours away from unveiling the new nbc universal streaming service he peacock, a big deal for our veouany and you about and we'll gi y the key announcements that you can expect.

it is a big day for us here because our parent company unveiling the details of its new streaming service peacock. today at 4:00 p.m. julia boorstin has that preview. >> and nbc universal's peacock is taking a different approach than netflix, disney plus or apple tv plus because it will include ads. today we'll learn key details

about the service which is launching in april we expect there to be a free ad supported tier we'll see how much content is included we're also looking for pricing and how much content will be included in two other tiers. one is expected to be in the $5 range with ads and another reportedly will be in the $10 a month range with more content and no ads that will be included free for comcast cable subscribers giving them more reason to keep paying for the tv bundle. we'll see how much live programming nbc universal include, that would be another differentiator from the other streamers. and while peacock has announced a range of originals, most of its 15,000 hours of content will be deep library including "the office." we'll have to see what kind of guidance the company gives on subscribers and costs. >> and it is a big day look forward tol the unveiling julia, appreciate that got a few seconds left let's talk about the markets

"power lunch" will pick it up, but more new highs, dow up about 180 points and morgan stanley the big gainer in the s&p up 7.5% you have charles schwab also doing well we'll see you tomorrow "power lunch" begins right now brian, thank you very much welcome. i'm tyler mathison and here is what is new at 2:00 on a very busy thursday. stocks surging to fresh record highs today. and even some of the most hated names on wall street are feeling the love and we'll tell you what this could mean for the rally plus it is the great retail divide, the split between the winners and losers has never been deeper. and it is not the usual names. we have those details for you. and later, the delivery wars are heating up, grubhub surging 25% in the past month, but one analyst says this company won't even exist in two years. we'll explain that as