>> paycheck, 3 to 4% dividend yield. >> josh? >> jpm, quality matters. >> pete? >> i'm going to go with nat, nordic american tankers. this stock, i think, has some upside >> michael >> goldman sachs if you like j.p. morgan's earnings, you'll like goldman sachs, and i own it long term. >> thank you very much that does it for us. "the exchange" with john fortt begins right now see you tomorrow thank you, brian i'm john fortt in for kelly evans. the morning averages clawing back from morning lows, but is this only coming because washington is promising more free money and the testing fiasco across america new data showing some results are taking a full seven days to become completed

it makes contact tracing nearly impossible how can this still be happening and what does this mean for america's hopes of reopening plus the pizza trade and painting your way to profits buch profits. but we begin with bob pisani and the opening markets. bob? >> the s&p moving at a fairly wide 40% range throughout the day. we were flat on the open still on the upside. dow industrial average, for once it's way down, believe it or not, by apple, microsoft and pfizer being helped by some of those deep cyclical names i'm talking about. s&p 500 in a range for most of the day. by the way, the vix is back in the 30s. hasn't been there for a couple weeks. we talked earlier in the day, some of these cloud computing names that have been strong or weak this week software stocks are down, internet stocks are down

i call it that tech momentum trade here that's been so strong in the last two weeks. this is just giving back a fraction of the gains that we've seen in the last two weeks value that's ive, that's the etf for that, up on the week you've got auto companies doing a little bit better today, for example, ford and general motors industrial names like caterpillar are up materials like freeport, deep industrials like honeywell those are the classic value names you see as well as energy stocks struggling recently, but you can see today a good day for apache, exxon helping the dow, halliburton and eog. remember the reopening positive story is starting to morph a little more into a potential reclosing store, but not quite the market is still not convinced that a complete shut is imminent, because that's why we're seeing this shift into these value names. if there was a complete worry that we were going to shut down

again, folks, we'd be down a lot more and certainly there would be no place to hide. guys, back to you. >> thanks, bob it changes every day let's dig deeper now into the bank earnings. wilford frost joins me with key earnings wilf >> the range for all banks is bigger than expected the question now is whether this will be the peak for those provisions management not able to give that guarantee despite it being their base case expectation. despite a rise in covid cases since quarter's end, jeremy diamond said, we feel exactly the same today as we did for the market on provisions q2 ficc with j.p. morgan was

strong here's citi ceo mike corbett summing up the expectation for bank investors >> am i willing to get on the airliner am i willing to get on a subway? am i willing to go to a crowded venue to watch a sport event, a concert, whatever the case may be going into this third quarter, i just don't see that. i would say many don't see that coming until we feel like there is an antivirus vaccine that's available for the mass population around that i think one of the things that people struggle with today is the disconnect in some ways between where the market is in some ways and actually where we are in terms of this health pandemic >> j.p. morgan has been holding onto slight gains just by three basis points now citi you can see down 2.5%

wells down 5%. john shrewsberry joins us on closing bell >> it's hard to parse the good news from the bad news, but on the loan provisions from the banks, you can say, yeah, they're prepared, but on the other hand i believe we had j.p. morgan's cfo saying they're socking that money away because they expect unemployment could be 10% in the first half of next year ouch >> i think ukyou could see a spn on provisions as a good thing, but you can see they don't have cash charges this is setting aside money in case of a rainy day. they haven't had to write it off yet, as it were, if you see what i mean, so they're preparing for a possible turn worse but they're not taking it as a cash loss yet you can see a positive in three quarters' time if they're able to put that back john, i think all of their base cases, this will have been the

peak for provisions, but none of them are sure the base case will play out because there is so much uncertainty that remains. one thing they did point out, without the government's support that exists, things would be a lot worse than they are and we need to see some of those government programs extended >> yeah. it's getting hard to put a peg in exactly how bad things are. it changes moment to moment. wilf, thank you. our next guest, both seem to be making a targeted approach to the market, one making a comparison between the dot-com bubble and one saying prices for some darlings will simply not live up to the hype. let's go to jamie cox, managing partner at harris financial group. guys, good afternoon >> good afternoon. >> simeon, tell me, what's your reaction in particular to the latest news out of the banks >> look, i like the big

provisions i mean, that's being conservative, appropriately conservative, and if they're socking that mona way and we're trading at just barely over one times book, i like it better than nine times book for the bank sector. >> do you like it for banks specifically or the broader economy? isn't this kind of like running to the hardware store to batten down the hatches because a hurricane is coming? >> there is a fiscal stimulus in the very short run, so you could interpret the high provisions as very slightly bearish, but we already knew we were in a rough spot with the path of the virus and the economy. that's one of the things why i think metrics are right these days because we just don't know what earnings will be over the next several quarters. i like the lower valuations on a book basis and i like the provisions as you look inpast te

next couple quarters into the next couple years. >> jamie, do you think banks are prepared >> they came out and said, this is not your typical recession. a couple will be backloaded. i think it's responsible to do these loan provisions up front, but at the same time banks were very much saved by fixed income trading and things like that q3 earnings will not be as good. i think if you're looking forward to whether you should buy the stocks now or wait, you have to realize if you take out those extraordinary fixed trading options, they were probably in the same boat as wells fargo. i would wait, if i'm really paying attention to whether i'm buying banks right now, i think there is a little more to come before we call the all clear i worr know, what the reopening looks like i would love for this to go away just as much as anyone else,ll lower for longer, the malaise is

going to last. the longer it lasts, the more economic damage. it happens to people the more chance there is for bad things to happen i think it's a little bit early yet to call this a success >> jamie, we also have to talk about the elephant in the room and the donkey in the room and that's the election coming at the end of the year which is bound to be some source of volatility when you consider there is some uncertainty around reopening, uncertainty around stimulus and uncertainty around politics, is the politics just another straw on that camel? >> i don't think the politics has anything to do with it people pay way too much attention to who is in power and all that kind of thing that's something for another day. right now it's all about whether or not we can reopen the economy safely, get people back to school, get people back to work. because everything stops and starts there we don't get that, it doesn't matter who is in power, they'll be faced with the same

challenges and they'll have to respond to it with fiscal stimulus, which is not necessarily a good thing you want an organic ability to grow, you don't want this artificial need for government to come in and fill the gap, so i don't really think it matters too much >> simeon, there is a lot of stretched valuations right now in tech and in growth. but it's not quite like it was 20 years ago these companies are making money. as an investor, what do you do >> that's exactly right. it isn't sock puppets and eyeballs anymore they are making money and return on assets in tech are higher than the overall market. they are higher on value, so the instinct to value right now might not pay off because it's been such a trap for so long we like quality at a reasonable price, if you will over 10% of the s&p has actually cut its dividends so far there have been some raises that are actually outstripping

cutters. if you look at the s&p 500 aristocrat index, which are companies raising their index for 25 straight years, you only have one cutter and you're trading at a discount to the market valuation with a return on assets and other fundamentals that look pretty decent. i would be worried about tech. i don't think i would take the full swing all the way to value, but somewhere in that quality range makes a lot of sense to us >> quality at a reasonable price. it's usually a good thing to go with if you can find it. simeon, jamie, thank you >> thank you coming up, covid cases keep spiking as testing backlogs keep growing. a closer look at why we can't seem to get this right plus, it's like using tin cans and string. that's how michael osterholm describes how the united states is collecting virus data a standard approach is needed and it's needed now. he joins me live, next and a different way to play the housing trade. this stock is up 25% in the past

three months the name and what makes it a good investment, ahead

welcome back to "the exchange." as cases continue to spike, testing continues to be a problem with wait times for results getting longer and

longer our meg tirrell has the very latest meg? >> reporter: hey, john quest diagnostics out with an update last night saying that for most patients, those who are not in the hospital or who are asymptomatic health care workers, average wait times for test results is about seven days that's been growing from two to three days on average since early june quest is not the only lab seeing this labcorp is seeing delays of up to four to six days now. bioreference laboratories saying they return results in three days or less quest really citing the uptick in demand in surging cases particularly across the south, southwest and west for this. albert girard who is heading the tests for this company, 15 to 20

million tests he says coming online by september or october, and pooling tests where you test 5 to 10 samples per test pro teams are getting easier access to testing, hassan whiteside of the portland trailblazers saying he waited 20 minutes for a test result. they say by bringing new testing capacity to central florida, launching a mobile testing site open to the public and bringing in point of care testing to support not only the nba but members of the community in orlando, our program will actually be additive to public testing. but john, there are a lot of questions about this to answer them we're going to talk to bioreference laboratory's chairman dr. cohn who joins us now dr. cohn, great to see you

tell us what the turnaround times for you in the vast public versus the pro teams >> thank you we have multiple different clients. we have governments, hospitals, physicians, all sorts of industries, sports franchises. we're talking multiple colleges, public schools, urgent care, unions there are a whole host of different verticals of different types of people who need all sorts of testing what we've done in florida is we actually have increased our capacity at our melbourne laboratory in addition, we're providing even more testing to our hospital, urgent care physicians and the general public we also run a bunch of the testing for the drive-thrus, we do a host of different entities in the state in the last couple weeks, we have increased the amount of resource we're providing to the state of florida in addition to the added platforms we brought to the melbourne laboratory.

>> still, your turnaround times are on average of three days for regular folks versus reports we've seen of, what, 12 to 15 hours to process the nba players' tests a lot of people feel like they need their health information. people in the public are getting tested because they're potentially worried about exposure to covid. is there a disparity here that you can fix? >> actually, i don't think there is a disparity first off, on the turnaround time, we had extended our turnaround time a couple weeks ago. we had, like many of the other commercial labs, had a longer turnaround time, and the reason that was, i think it's important to know, is we had a nursing home crisis here in new york we signed up over 400 nursing homes in partnership with new york state we tested a quarter of a million people, a quarter of a million employees because of that vulnerable population, and we were very proud of that decision to help the state get through the pandemic with the nursing home crisis. that had a turnaround time of

about a week and a half to two weeks. then we regrouped and we're back to two to three days a lot of it depends on logistics. it depends when that speciman is taken, it depends which lab it goes to, it depends which batch it goes into here's our commitment. our commitment is if a patient is in the hospital, if they're in the intensive care, if they're a health care worker, if they're a front line worker, those people go to the front of the line we've always done that since march 13 when we started our covid testing and we continue to do that today. >> dr. cohen, it's john fortt. are you essentially saying this is the best that we can do, that you feel we are as a nation, or maybe you're just speaking for you specifically, that we're triaging this correctly? >> well, that is a great question so the question i would have for you is if you're a large employer and thousands of employees go back to work

because of your testing ability, where is that relative to a college, university or student going back where is that relative to a nursing home where is that relative tative ta hospital who is trying to bring back elective procedures to get up and running again there are literally hundreds of different scenarios of people trying to get testing. we've had people who want to test for retail, hospitality, manufacturing, food service, professional services, casinos, sports franchises. so for us, i don't make the decisions and we don't make the decisions about what those priorities are except for the ones i talked about. health care workers, people in the icus, people in the hospitals, and of course people -- nursing home employeesmeemployee employees. but beyond that, there are hundreds of different types of scenarios where people need testing. >> right dr. cohen, just a last question for you quickly. if there is one thing your

company and the industry needs to bring down testing time, what is it? >> we're testing 700,000 people a day in america i think the current estimation is we probably need 2 million tests a day, conservatively. so there are a lot of technology issues that are -- not issues, advancements that are beginning to occur so we do pooling i know you mentioned it. we actually began to pool specimans in low-incidence areas which are areas like the new york area. incidents like pooling will gradually increase our capacity. our capacity is 50, 60,000 a day. we'll get up to 70,000 it's an evolving story and it's incredibly fluid but we are committed again to providing the tests people need to have done >> dr. cohen, we appreciate your time thanks for being with us

>> thank you >> jon, back over to you >> thank you, meg. let's stick with the growing challenges in our testing capacity and our national response joining us now is dr. michael osterholm from the university of minnesota. doctor, thank you for joining me >> thank you very much for having me. >> continuing it the conversatin we're having, i just want to know, when it comes to testing and turning around the results, what is the best in the world for this if it isn't the u.s., and what are they doing that we're not? >> you have to look at, first of all, we're basically hitting a crisis of reality hitting what we can actually provide. what you really want to know is are we providing the level of testing that we need in this country to effectively control the current pandemic the answer is an absolute no and part of that is not because we're not doing enough testing in some cases, we're not doing the right testing. our group put out a document several months ago about the

whole idea of smart testing. the mantra of test, test, test is just wrong. what we need to do is have the right test and the right population at the right time for the right result to have the right impact >> what is the right test? >> the right test in this case is ppr testing but are you going to put workplace testing which, in many cases, has nothing to do with the actual risk in that workplace against the fact that cases coming in to a clinic were symptomatic or ill today are the ones we want to identify so that we can, in fact, begin to do contact tracing if appropriate or at least let them know how to isolate themselves from infecting others that's just a wrong combination of priorities. that's what we're talking about by smart testing >> doctor, i've got the uncomfortable feeling -- tell me what you think about this. this is all taking out a "hunger games" sort of feel. there is a group of people in the capital, maybe you're a sports team, who get their tests and get the results fast, and maybe you're left to the wolves

to duke it out maybe that's not right i want to know how it looks to you and what would it take to solve for that does this need to be centralized? does the federal government need to take a more hands-on role that they seem to be trying to avoid and leave it to the states >> first of all, you're hitting to two points that are very important. if it takes eight days to get testing results back, that's not smart testing. that's wrong at least you're getting testing done what we're worried about is that soon we won't be able to meet the needs for testing because the reagents, the things we need to run these tests, railroare it supply there was no measurement of management capacity in these tests so we're trying to address a major forest fire with a garden hose. as you've seen the number of testing requested going up for clinical cases, so, then, is the burden on getting the current testing done we've seen organizations that promised they would have testing

done for everyone who needed it when they wanted it within days who now can't deliver or they are taking eight or more days. so the central question is why do we not have a national plan that someone is overseeing to make sure there are all the adequate reagents, all the adequate test materials that we need to do the testing and that's the challenge >> doctor, do you know who i am most concerned about right now schoolteachers in the areas where kids are going back to school i know there is all kinds of speculation about whether asymptomatic people, especially kids, are really at risk but if the turnaround times are too long for people who are essential workers on the front line, and that's about to be hundreds of thousands, if not millions, of teachers, boy, that could be bad what should be done for the schools when it comes to this, specifically >> you talk about the teachers now, the real key issue is testing the students because that's the risk where the transmission is going to occur from students to teachers. right now we do not have the

capacity to begin considering testing students in any meaningful way and, in fact, if we have an outbreak in a school, it's going to take eight days in many situations to actually get those test results back. you're absolutely right. but then again, this is part of the plan that we don't have. we don't have a master plan that says, this is who is at a priority to be tested. i will tell you again, i would test clinically ill individuals such as in schools long before i would just routinely test in the workplace. we don't have that organizational prioritization at all. that's where we'y where we're a part because we've had this increase in need, but we don't have a plan to address it or prioritize within that need. >> well, we need to get smarter about this, as you said, and fast your voice is important. thank you, dr. osterholm >> thank you nbc's stream iing peacock

premieres tomorrow new home sales in june climbed to the highest pace in 15 years a look at who issnapping up those houses and two names to buy to cash in on the trend. and a reminder, you can always watch us or listen to us live on the go on the cnbc app "the exchange" is back in two. to return to the workplace, safely, companies will need the right tools. that's why salesforce created work.com it's an all-new suite of apps, expertise, and services. to manage this crisis today, and thrive tomorrow. everything companies need to return to the workplace. let's reopen. safely.

welcome back to "the exchange." the dow is up 258 points it was up 339 at the high. the s&p up just a bit, around eight points the nasdaq was up 43 points at the high now it's down about 27 now to sue herera for a cnbc news update. sue? >> good to see you, jon. good afternoon, everybody. here's what's happening at this hour protesters attached balloons to signs reading, the economy is

costing us our lives during france's bastille day celebration. the scaled-down event was used to honor front line health care workers, but some are accusing the government of trying to divert attention from hospital shortages. sweden is defending its no mask policy despite having one of the world's highest death rates per capita the country's health agency says social distancing and proper hand hygiene should be enough. here at home, tulane university is banning parties and gatherings of more than 50 people violators risk suspension or even expulsion for more on the policy, you can go to cnbc.com shaquille o'neal stopping yesterday to check on a driver involved in a crash in florida shaq fist-bumped deputies who arrived at the scene of the crash before going on his way. a good samaritan deed. you are up to date that's the news update this hour jon, i'll send it back to you. >> thank you, sue. and a big fist

>> you got it. amazon's building boom no summer vacation for the middle class, and is it too late to get in on that pizza trade? that is all coming up next in today's edition of "rapid fire." we'll be right back.

it's time. let's catch you up on a few stories that should be on your radar. "rapid fire ". here with their takes are seema mody and kate rogers papa john's is coming off on a

high with the surge after their lows who would have thought pizza would be the last thing standing in a situation like this it's doing really well >> jon, it really is aside from just the stock performances that are very impressive, these are two of the very best performing restaurant stocks year to date. the other two are chipotle and wing stop focused on carryout and delivery if you look at hiring, that's been impressive, too both domino's and papa john's said they were looking at hiring delivery drivers there have been 8 million total layouts nationwide, and these two companies really hiring in a big way. a lot of people thought this would be a trend i don't think it's a trend right now because things are starting to deopen, as we've been calling it restaurants are closing back down people are turning to carryout

and delivery big time. >> shdid shaq get into that big time >> we're also talking about pizza. pizza is very easy to divide i don't know if this is also a fundamental story. the reality is when we're all hungry and you have to satisfy a large number of people in one place, pizza is a good option. >> seema, is there a bad time for pizza? >> is there a bad time now is a good time, to his point. all these names have really invested in technology and that seems to have really paid off for a name like domino's you look at pizza hut, it's really fallen out of favor and it hasn't been as quick to embrace technology as the likes of domino's or papa john's peacock, part of our parent company universal, launches nationwide tomorrow. it joins an already crowded

streaming space. julia boorstin tells us what to expect hey, julia >> hey, jon. it offers to users both the free streaming version and the $5 subscription service it's also adding more golf and cycling. chairman pete strauss telling us it's live news and sports, and the fact that people can watch for free will help it compete. >> in a competitive market we've actually identified a white space opportunity which is to launch a premium ad supporting service which really taps into the breadth and the content we offered universal. >> peacock is launching without deals from roku, amazon fire tv. strauss said they're working on those deals.

they're also working on getting those premiums offered through other providers. it's also offered through comcast. >> i can't help but think that this is kind of ironic comcast, big cable provider, is used to perhaps controlling distribution a bit, but nbc universal, the comcast unit, can't get roku and amazon fired to do these deals. it's over the top, isn't it? >> so, jon, does that mean its value membership, which is free to $5, while others are $15 a month. sometimes when i log into netflix, i experience the decision paralysis where i just get so overwhelmed that i just sort of go back to tv. but i wonder in a way if that helps peacock just sort of focus on quality versus quantity and if that helps beat out those fares around subscription

fatigue. >> frank, while you're eating that pizza, you going to watch some peacock >> i love streaming services in general because you can kind of find what you want and they have a lot of niche programming i think this is a great idea a lot of forecasts for netflix subscriber groups has them possibly doubling what they put in their guidance. i think this leaves them room for their streaming service whether it's a tv show or a one-shot documentary, it really drives down what people are interested in, and who doesn't want more of what they're interested in. i think this will survive. >> julia, is it going to be quidby all over again? >> they were to launch on certain devices. i think this is more an option to hulu, and there is no subscription and you can really watch for free will give it an

advantage. and just how much more of a boost will they get when sports comes back >> i think they should do pizza delivery i think that would do well these days people are into pizza delivery topic 3. amazon is building more than a dozen new facilities this year to meet a surge in demand and to help fulfill its one-day prime delivery promise the building boom could help fedex and ups. they were doing so well with this one-day delivery, then this pandemic hit >> take look at this map it kind of illustrates this building boom we're talking about with amazon building a lot more performance centers and also delivery centers where it delivers packages around big and mid-sized cities

this is all about their promise around that one-day free shipping when you have prime when you look at amazon's ability to deliver on prime in 2020 versus 2019, it's a lot slower now in 2020, it takes 3 to 15 days, and in 2019 it took no more than two days these days you're hoping to get your packages fastfaster, so am really needs to step up there. >> i am using amazon more than i ever have been i'm surprised by the fact that they deliver between 3 and 15 days i guess i feel like i'm ordering more because i don't go to the store anymore. i'm also a pizza junkie. i can't pick what is more important to me. both important in the pandemic for sure

new data shows the middle class might be getting priced out of vacations as short-term rentals see a surge in prices. seema mody, we have cabin fever. we need to get out but we can't. >> it's getting more expensive to get out you're seeing as a demand in vacations rise, they're pricing higher florida keys, prices for a vacation rental up nearly 14% in the month of june compared to the same period last year. marriott invested in villas lan homes last year. it's seeing the highest gross revenue since 2019 last year airbnb finding out that in rural areas in the u.s., it's earned $200 million in the month of june that's compared to 25% from the month of june in 2019. that vacation rental getting a

bit more expensive but alternatively helping homeowners >> what are you going to do, frank? day trips? >> i'm from philadelphia, and we take a lot of trips to the jersey shore which is an easy day trip i think day trips are one solution, but obviously things will get more expensive as we're all stuck in the house and we want to go somewhere else, so everything seema is saying makes sense to me. >> kate, your dog wants to get out. >> i'm sorry >> it's cute >> we've got cabin fever he is flipping out off camera. sorry about that, everyone my apartment building is completely empty i'm not surprised to hear people are flocking to these rentals. i think prices will continue to go up. but everyone needs a vacation right now so you don't want to hear about people getting priced out. >> there's always room for one more kate rodgers, colin, seema

more tech companies are allowing employees to continue working from home. we will take a look at what that means for th tbohe companies and their landlords, next. - [narrator] at southern new hampshire university,

we're committed to making college more accessible by making it more affordable, that's why we're keeping our tuition the same through the year 2021. - i knew snhu was the place for me when i saw how affordable it was. i ran to my husband with my computer and i said, "look, we can do this." - [narrator] take advantage of some of the lowest

online tuition rates in the nation. find your degree at snhu.edu. welcome back tech giants like facebook and twitter, just a few of the firms who have announced permanent shifts toward remote working as that becomes the new normal for many tech companies, they're letting leases expire and they're consolidating office spaces cnbc.com technological reporter a ari levy wrote about it. ari, i haven't seen you in a while. i love your hair >> i've got produce in -- or product in my hair, not fresh product. good to see you. i miss you out here. >> tell us about this remote working and what it's going to

do for office buildings in a place where commercial real estate, especially, real expensive. >> jon, one of the interesting things that has happened here is these companies never intended to become remote they liked the office culture, they liked the ping-pong tables and the snacks they were growing up in that environment. all of a sudden they were forced to go home and overnight turn into a remote office what we quickly saw was, yes, we all adapted zoom and we all adapted and became comfortable with that, but there are a lot of other tools that allow companies to communicate and collaborate and to share code. so the companies had to start investing in this stuff right away, and what they saw was their employees were really good at it, really effective. they were efficient and in some cases they really liked being home we're four months into this, companies have been paying rent for four months, and for a lot of these companies, this is a significant part of their cash burn, a significant piece of the amount of money raised, and now

they're looking at it and saying we have no idea what's going to happen with schools, we don't know what's going to happen with the pandemic what we do know is our employees are doing well, and to go back to your previous segment, they're allowed to work at a lake in south carolina and they can go to the mountains as long as they get service. they can do a lot of things they couldn't do before, so it's really changing the service in the tech industry. >> part of the idea in new mexico was retention of lifestyle. they wanted all these people not going outside for lunch but staying productive how do you promote retention and lifestyle when people are working from home? are they going to have to work that out >> part of the answer is if there's no choice, it's what everyone is going to be doing. it's the alternative that you risk getting sick, you risk getting your family sick that's not a viable option so the view is that the industry

will evolve as the pandemic allows it to evolve, and what we're seeing is there are all these benefits from working at home or working remotely that we hadn't previously explored or hadn't really considered if we get to a place two years down the road, three years down the road, maybe sooner or maybe later, where office culture becomes viable again, then it will be -- and you're going to see all sorts of discounts on the market at that point, right? instead of these 10 to $15,000 a month visas we're hearing for small spaces those are the kinds of deals we're hearing about, that people would need to see a 15% reduction in order to pay rent at this point. >> i wonder, ari, if you're hearing anything babout the use of social gathering spaces with distance the companies might be planning on for down the line. i'm hearing a lot of talk from silicon valley, for example, we're no longer a hotel for office space, we're going to be

a gathering spot and otherwise people can work from home. >> yeah, i mean, all these things are being explored. i'm hearing about retreats where you can go rent a ton of space and make it safe, obviously have distance people can wear masks as needed. i'm sure we'll see that. the shorter term story is that the number of companies we're hearing about that are breaking their leases or just not renewing their leases, it's almost -- it's the default choice at this point and so very eager to see what happens to downtown san francisco over the next six months i'm kind of shared to see what happens to it, actually. i'm from the mideast and i haven't been back to san francisco since mid-march. what happens to downtown new york city, what happens to downtown chicago they'll have to get creative with these tall buildings that will be vacant for a while >> yes, we'll see when this

pandemic eases i hope it's sooner than later. i for one wouldn't mind seeing a bunch of human beings again. i like people most of the time >> i wouldn't mind seeing a barber shop. >> keep it, ari. that's one thing that shouldn't change post-pandemic change still ahead, while millennials were criticized for spending too much on the likes of avocado toast a few years ago, they are in prime home buying age and ready to spend. he joins us with two housing stocks that could benefit as a result that's next.

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welcome back the tech heavy qqqs hit a series of record highs but guess which sector has out performed it. yes, the home builders the etf tracking those stocks is up 39% doubling the qqqs gains home builder stocks are the obvious beneficiaries of post-pandemic housing boom it might be soon to call it post there's other names that investors should consider. let's bring in equity research analyst at bank of america securities john, good to have you good afternoon >> thanks for having me. >> what's driving the home builder park is it an urban exodus? >> it's a good question. the trend was in place before covid. if you think about sort of the demographic wave that's coming through the pike now, there's about 26 million millennials of prime home buying age today.

that will accelerate to about 29 million in 2025. at that point, it's that group will be about three million greater than the baby boomers. it's a strong wave of demographic support coming through the pike that's leading the charge. put on top of that, covid, and i think you have folks that were hanging onto city life as long thaz could sort of hitting the exit button at that point saying maybe this is the time to get out i think the demand trends were very much in place and moving in the right direction. we had a bump from covid where things hit the brakes in lake march and early april and now we're starting to accelerate again. >> with that backdrop, you like dr horton. >> i think dr horton fits well into this millennial first time buyer story where they are targeting the first time entry level buyer. they are going into markets and

building new product at or below the existing price of a resell home in that market. that's attractive to anybody but very attractive to this millennial buyer that adviser the like new over used they are the largest home builder by volume. that gives leverage in terms of procurement of land, labor and materials. the company has done a very nice job pruning their portfolio over the past year or two now are left with two very high margin, high return businesses in plumbing and what they call decorative architecture. if you think about theeds two businesses plumbing and decorative architecture, they are both very much break fix oriented if your faucet breaks, you'll replace it if your 4-year-old draws on the wall with a sharpie, you'll paint over that. they both have good brand power.

>> makes sense >> they target diy the products they have so you don't need a contractor in the home >> let me you a demographics question what happens to the retirement buyer if they are going to like downsize given what's happened in the pandemic? do you have any bets on that is the trend remain the same or does it shift because of how preferences might shift? >> it's a very good question it's part of the chain that's overlooked our view is that you're going to see kind of downsizing into first time entry level homes competing with the millennial generation but being closer to grand children and things of that nature. i think you'll see another tale

of single family housing from older folks moving >> do you think that means anything for the home depots of the world? >> i think there's behr paint is sold exclusively from home depot. i think the big box retailers are well positioned. thank you for watching the exchange stocks now near session highs. coming up next hour, landry's ceo joins us to discuss what the recent spikes in coronavirus cases means for his business weluh uafr sht break.

welcome to power lunch momentum stocks take a hit for a change delta worse quarter ever saying the industry will not get back to normal for two more years a top analyst says the worst could be yet to come plus, it's tuesday it's time for tilman the billionaire is here with a message for politicians across the country as reopenings are rolled back in many regions. he's not happy abo