>> stephanie link, last but not least. >> johnson & johnson, the stocks really haven't done anything this year, but they beat race guidance the last three months, race dividend. i'm buying that one. >> big help for a vacciopes for. thank you for wauptching "the exchange" begins now. >> thank you, scott. here's what's ahead at this hour the housing market is booming and just posted a record-breaking figure is this what will get the economy to line up with the stock market and what if it starts to overheat we will ask. plus the parabolic move in tesla. its market eclipses some of the biggest companies in the world tractors and sneakers are selling, epic gets new teammates in its battle with apple, what

uber's valuation is telling us, and are you ready for some football we begin with markets and bob pisani is here for that. bob? >> kelly, it was a bit of a choppy day it was rough overnight because the manufacturing and service numbers in europe were much weaker than expected, so everybody is watching the economy. our manufacturing and service numbers came out at 9:45 eastern and they were better than expected in fact, manufacturing a 19-month high, and the market sort of lifted on that see they went into green right after the opening numbers? watch very carefully the economics statistics today what's going on today? once again, the thematic tech techie etfs. people love watching battery stocks, anything related to gaming they continue to do very well. every day i see these stocks

visa etfs in the green technology dominates everything. the mega cap names are split today here but look at the sectors this week. technology up 3% consumer discretion, mostly amazon, is up 2% health care is flat. banks are down 7%, energy is down 7%. that's very typical of what we've been seeing. we get a few days where banks and energy move up, but none of those ever last. technology this week, what can you say about this when you get apple up 7%, 12% in a month apple is up as it passes $2 trillion. folks, that moves the stock market and that's what we're seeing this week up largely on those names. bob, back to you >> thank you very much, bob pisani there's been a lot of talk about the dichotomy of the stock market and the economy home sales surgerying 25% versus

june where supply is down 20% over a year ago. could housing be what gets the economy to line up with the stock market katarina simeoti, and it's good to have you both here. katarina, we'll start with you some say that this is the business cycle can there be kind of a v-shaped fundamental recovery and not just one in the stock market >> housing is a leading indicator and it was actually turning in the quarters before covid hit, and it was just starting to come around because the fed had lowered rates in 2019, and, of course, we're seeing a big rebound now it's unclear if this is going to be sustainable we're up about 8.7% year over year based on today's data and we're almost back to february's

pre-covid sales and addressing the issue of supply, right certainly lower interest rates help with that, and we're seeing a lot of people at home. they're re-evaluating their home environment, so that is spurring a lot of purchases of both new and existing homes we think of it as fomo, fear of missing out, and fogo, fear of going out. all our fogo aspects are driving the economy right now. >> and katarina, i'll ask you, especially in the housing sector, we talked about the mass runs of home depot and lowes for the homebuilders or are you just concerned that things have gotten too stretched? >> kelly, thank you for having me on the show

i agree with con stanstance this run of home buying we're seeing certainly points to consumer confidence. as we look at this overall v-shaped recovery, we're thrilled about it, but we still can't discount the fact that the economy is not fully recovered yet and we still are facing the uncertainty of the upcoming election, we're facing the things that we're focused on leading up to the tensions with china and continued threat of the virus and the absence of the vaccine. so having said all of that, we are expecting heightened volatility for the months to come, but this is certainly seen as a positive development. >> you have three recommendations. you think people should get into cheaper parts of the market, so maybe midcaps, some global equities, value names. the housing market accelerated

by covid-19, but you're still recommending gold and long-term treasuries do you think there is still value to be had there? >> absolutely. particularly to investors who feel they missed the rally we think there is still time to get in as long as they do it strategically and defensively and hedge their portfolios with long-duration treasuries, like we said. because the reason for this, as i mentioned earlier, we're expecting a lot of volatility, but we also expect there is going to be a lot of buying opportunities as we see them right now in sectors that have not benefited from the next leg up as tempting as it is to be buying high flyers, we are encouraging investors not to fall into this all this time trap of buying high and selling low, and instead we ask them to be defensive, to be strategic

and, as a matter of fact, use this time to rebalance their portfolios, which will be extremely good >> it's hard times to buy low and sell high. it's hard at times to do it consistently, anyway constance, you kind of pointed out that we need to be on the watch for lower rates, even with the rebounds of housing, rebounds in the market, why do you think this era will stick around for the time being? >> yeah, it's a great question our forecast for ten years is for it to really remain below 1% for the next year. a lot of that has to do with what we've seen in previous pandemics, right we've seen lower rates after pandemics going back several hundred years, and we have increased savings as a result of the pandemic that's happening globally, by the way. we're seeing that from china to the u.s. households are saving more, that higher precautionary savings pulls back spending, causes

additional inflationary environment, so we think there is scope for yields to remain low on their own furthermore, we wouldn't be surprised if you do start to inch too high and choke on the ro recovery too early, the fed is probably going to come in and try various modalities from job owning to allthe way, possibly to yield curve control to keep rates low to make sure we sustain. because as katarina said, before the vaccine, we were in for a very roller coaster type experience of fits and starts. we're starting to see cases tick up in european countries, countries that thought they had this under control so until the vaccine comes, we're in for a little bit of a rocky ride, and, therefore, the fed is really going to try to make sure that rates are as low as possible to support the parts of the economy that they can support. >> i know you're doing your part for the home improvement economy. the plant looks great. >> thank you

>> we'll see you later, katarina simonetti and constance hunter president trump will officially square off against joe biden in the debate. "squawk box" talks a little about why investors should be concerned. >> the challenge for biden right now and why he did such a good job last night is he avoided talking about the specifics, which will make the viewers of his show very concerned about where the markets are going to go, about where investment is going to go, about where their own money is going to go >> joining me now to talk more about the biden economy and the impact covid is having on real estate, don peebles is the chair and ceo of peebles investment

committee. it's great to have you here, don. >> thank you, kelly. great to be here >> so biden is a little light on the specifics and talking about liking the country do you think that will sell? >> i think he's doing a good job. if you look at the reaction to president trump, his personal style o'fenffend az ls a lot ofs and americans want to see a change there biden offers a different perspective and a persona and his ability to walk across the aisles i do think his policies are going to alarm the markets, and that's why he's talking specifics. i think some of the specifics will be a tax increase, but other elements are going to be very positive for the markets, a more inclusive economy, a greater focus on addressing some of the issues that the younger generation is concerned about, like criminal justice reform and

things that have led to these protests around the country. so i think we're going to get some things that are going to be very positive to the market and i think some other things that are going to cause us some pause. >> in listening to what both you and mr. lunk said this morning, like a wolf in sheep's clothing and trying to make things look just fine, or is he trying to be kind p of the joe biden we've known for the past 30 years? >> vice president biden is a very good human being and a very honorable person he is going to be who he is, and i believe that has always been to the center of our party he's been much more of a centrist in our party, and i think he'll continue to be there. i think the people to the left,

most of them understand who biden is and they expect to get more out of him, but they see him as a transitional president. they're not getting what they want from trump, so biden is a good transition, and hopefully four years, eight years from now they get the candidate they want who is more to the left and kind of reorganize their country. >> it will be interesting for him to look at the details ahead if president trump pushes him on that, there is still more to find out pretty dramatic headlines, especially in the "wall street journal" where they're saying covid-19 is more serious for real estate than the financial crisis would you agree with that diagnosis, and what does the city do to come back from this >> i think it's worth than both of those and you can throw in the financial crisis of the 1970s as well. it's worse than all three of them there was an exodus in new york prior to covid new york was becoming much more competitive in terms of being a

business-friendly environment, it was less competitive and less attractive to high net individuals. as a result, they were going to other neighborhoods. it showed that new york could do work and business outside new york city and they didn't have to be there. you will see a massive growth in south florida real estate. you're already seeing the hamptons on fire and new york city, some major projects are selling now at 50% discounts for new construction i think that shows some real stress >> that's amazing. you know, listen, i'm much younger than you i don't know much, but i'm also in that kind of skeptical camp about what's going to happen to the city for all the reasons you laid out, but time and again people come back and they say, kelly, you don't understand. people have said this about new york after these different crises for decades the city always comes back it is fine right now, it is going to stay fine

if real estate prices come down, you'll have a flood of new buyers what would you say in response to that? >> i would say that's extremely optimistic thinking and we've never seen a pandemic in the last few generations i think that new york will ultimately come back it will come back differently. it will be a different place, and it will be much more affordable, and it's going to take quite a bit to dig out of a hole because you have to look at new york city's politics right now. extreme to the left. they're not focused, the political agenda is not focused on being a business-friendly environment. even quality of life nobody walking around new york city or living in new york city can say the quality of life is not diminished significantly crime is up. those are elements in stimulus that are going to create more people leaving the city. so i think it's going to take new york about a decade or so to dig out of this, maybe longer, but it's not going to be soon. >> don, final question, then tillman fertito was on last week he has a number of major

restaurants in new york, and frk he's worried about where this is headed but he said the usa can't come back without new york city is that right? >> no, it's not right. new york city used to be the center of the universe for the financial capital of the globe technology has enabled that to be a more portable industry than what it's been in the past i think new york city will struggle, but other cities in other states are going to prosper as a result of that. i think you're going to see the tax-friendly states and the seven states with no personal income tax grow significantly, and it's a much more competitive environment. new york city can come back if it becomes competitive and if we all recognize that we've got to go and compete with south florida, we've got to compete with nashville, we have to compete with austin, texas and dallas, texas. absent of that, if we keep these blinders on, new york's hole will dig deeper. >> i think the request for don

peebles for mayor will kick up after this, sir. >> thank you for the vote of confidence i'll probably focus on my business, but we'll see. >> thank you so much for joining me i really do enjoy hearing your thoughts thank you very much for your time >> thank you >> don peebles is the chief ceo for peebles corporation. in the meantime, the superlatives for tesla as their stock is about to split. airlines have been grounded as one key traveler stays out of the skies. plus epic has a new partner in its battle with apple that and more. we're back in two. ♪

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airline stocks have been beaten up this year for major carriers 50% or more the bad news is they may not recover for three more years why, phil lebeau >> you may not see people flying at the levels they were in 2019

for several more years if you talk to airline executives, almost all of them say the same thing the business traveler will not be coming back until at least 2024 i've heard a few people mention 2025 if you look at the airline stocks, yeah, they're doing a little bit better in terms of getting the leisure travelers to fly, but corporate travel may not rebound for three or four years. a few things are weighing on corporate travel right now first the covid-19 concerns out there, not only for your own staff or you as a businessperson saying, i'm not crazy about flying right now, not necessarily because of the plane but where you're going there are few, if any, conventions. meetings are down substantially. i rarely hear from my traveling friends, i have a meeting i'm going to for a day no, they've been replaced with video calls. in terms of the cash burn, that's the focus right now for investors. the airlines are gradually bringing down their daily cash burn we heard from southwest airlines that their daily cash burn for

july was a little bit lower than previously expected, but that's going to continue through the end of the year, kelly unfortunately, what we're seeing here for the airline investors is the real catalyst that they need, corporate travel, it's just not coming back anytime soon >> let's talk about tesla noin e meantime, phil it's getting ready to split. tesla is up 399% in 2020 that means it's up nearly fivefold its market cap is more than $370 billion. it's one of the biggest companies in the entire world. phil, i'd ask you about the next catalyst for this stock, but i can't even identify the last couple maybe the last quarter, certainly, was encourage, but this -- encouraging, but this is a huge run >> then there's they were profitable for the first quarter, will they join the s&p. then you had the stock split and that's been pushing the stock the last couple weeks.

when you look alts the potential catalyst, there are three on the calendar that, look, they'll potentially push the stock higher, maybe valuable wait the enthusiasm there, and it could pes potentially before the stock lower. you have battery day coming on september 22 they already lead in terms of battery costs. q 3 deliveries will be announced in early october, then the q3 results late october and early november what people will be looking at is deliveries. remember, their goal for the year, the guidance they have put out there, is to deliver at least -- at least -- 500,000 vehicles remember, they about 360,000 last year. they have not changed that guidance despite the fact that it was pretty slow at the beginning of the year, but china is what people will be focused on finally, take a look at their market cap we're also showing you toyota's market cap as well this is amazing. tesla's market cap a year ago, i

think it was like $39 billion. it was nowhere close to toyota now it dwarves toyota. it's gone up $30 million in the last year. >> we are running out of superlatives, but those are some catalysts to watch out for i appreciate it in the meantime. phil lebeau talking cars and airplanes for us should airbnb get some relief my next guest says yes he'll tell you how much money is needed and how to avoid the worst. stocks up in the s&p 500 it'sthe next name in our overcrowded kings segment. we're back in two. some companies still have hr stuck between employees and their data.

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welcome back to "the exchange." futures were lower this morning but things really turned around after a stronger than expected

preliminary isi report this morning and that really strong existing homes sales data were really hanging onto the gains, as you can see behind me the dow was behind 39 points the nasdaq is up 12. here's a look across the sectors today. look, it's a pretty familiar picture. technology consumer discretionary in the leadership positions. consumer staples there industrials helped out by deere sales this morning we'll have that in a little bit. laggards in a similar position materials are also lagging here are some of the individual moov movers this hour bioentech could enter regulatory review as early as october the drug maker shows early studies show responsive test data sticking with biotech, sorento

buying a pipeline of gene-encoded therapeutic antibodies, starting treatment for covid-19 perhaps some concerns about the valuation that they're paying. finally, shares of boston beer hitting an all-time high after they were a top pick in advertising and promotions pretty shocking for sam's which is up at a time when bars and restaurants are mostly closed. let's go to sue herera for a cnbc update. sue? >> here's what's happening at this hour, everyone. the world health organization says it's hoping the pandemic will come to an end in less than two years. at this time the world has reported more than 22 million confirmed cases and almost 800,000 deaths that's according to data from johns hopkins. the justice department is planning to appeal last month's court decision that throughout a death sentence for convicted boston marathon bottomer

dzhokhar tsarnaev. and the macy's thanksgiving day parade will be reimagined. it will be similar to its july 4th fireworks show bit of good news that's the news update this hour kelly, back to you >> thank you, sue. sue herera the postmaster general louis dejoy is testifying this hour. eamon javers is there. eamon? >> they were worried that the postmaster general's actions were linked to president trump's

worry about votes and how they are counted this fall. >> when i see what's going on with a president who wants to get rid of the postal service, wants to get rid of vote by mail, you can't be surprised if we're seeing the kind of degraded mail that he's talking about. >> but dejoy said he's just trying to protect the postal service by cutting costs and dealing with the systemic problems the post office has had. here's what he said. >> i want to alleviate the people's worry that we will get ballots there on time. this is my sacred duty between now and election day >> reporter: all of that came today as the president continued to hammer home his criticism of voting by mail, significaaying g don't go right this fall, it could be weeks or months until we know the results of the election

back to you. >> thank you, eamon. coming up, the airline industry received hundreds of thousands of dollars by the u.s. government the hotel industry hasn't been so lucky foot locker putting its best foot forward deere goes tech, and why uber and lyft have gone from tech to transports it's all in "rapid fire" right after this what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. mhm, yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. now offering zero commissions on online trades. we charge you less so you have more to invest. ♪

welcome back let's catch you up on a few stories that should be on your radar this friday. it's time for "rapid fire" and here to break down the stories are eric chemi, deirdre bosa and

frank holland. sales stored in the second quarter and the store announced it's bringing everything back, executive salaries among them. they're still down 20% on the year meanwhile, deere raised full year guidance in spite of covid uncertainty. that stock is up 6% today, and brian, about 17% in 2020 first of all, it's nice to see someone besides target and walmart performing and we haven't seen someone in this sector for a long time >> no, we haven't, and the price of wheat has gone up everyone is stocking up on food in the grocery store i appreciate the hard work the men and women out in the fields in iowa, nebraska and everywhere else is doing.

i don't know about eric or deirdre, the last time they went shopping for a harvester, but some could range in the millions of dollars john deere has also been in high rates. some of these john deeres cost as much as a house >> this reminds me of my good buddy in charlotte, he owns a boat selling industry. these tractors are the same thing, low interest rates and low gas. you have to fill these things up and get them to run. so the markets are in favor of buying these things and getting them going >> it also calls for stimulus payments and i believe $14 million in aid, so that's keeping them going i want to ask eric quick as well about full locker. that one is surprise to go me because it's so mall based

what accounts for -- >> that's a good question. the mall by me, i see people standing outside in lines waiting for the nike store there is clearly some societal push to look good even though you can't see anybody's shoes on these web cams maybe the consumer is just stronger than everyone has been worried about. that's why we're at all-time highs in the market generally. foot locker reflects that. if we're going to be at all-time highs in the market, people want to buy stuff, so it makes sense they're buying shoes they don't really need. >> i bet deirdre is wearing sneakers right now what do you want to bet? >> i hate to say it, i'm not wearing any shoes at all sometimes i'm wearing slippers you out med, guys. i'm certainly not buying shoes, either i have seen those lines, certainly there is pent-up demand it raises some questions, what is happening to all of these operational efficiencies foot locker far from out of the woods right now.

we don't know what the back-to-school season is going to look like, so the fact they're reinstating their dividend, economic compensation, so what does it mean if the virus resurges again and you're not seeing those kind of sales will they have to go back and put efficiencies in place? that's one question that came up for me >> by the way, brian, flip-flops are like a showoff >> did brian show us his feet? >> no. just the flip-flop, deirdre, everybody who is listening >> show us your feed, deirdre. >> no way. in the next hour, uber and lyft won their legal game of chicken with california. they granted the ride share companies a delay. uber and lyft can continue to operate as usual, but interestingly, is the magic gone from the stocks, anyway? don gallagher in the "wall

street journal" saying the companies are acting more like transportation than tech companies these days >> this is correct, that is the ultimate insult. but it's one that they've been facing for a very long time, tracing back to their rpr. remember when uber was going to be a $100 billion-plus market cap company. hasn't even gotten anywhere close to that as a public company. lyft is far below their private market valuation seen years ago. the question going forward, is this inevitable? do they stay here or are they able to keep their business model as is, not just here in the u.s. for uber but around the world? that's increasingly looking like it's not going to be the case. of course, what happened yesterday, that 11th hour reprieve they got, that just kicks the can down the road. we'll see what happens in november but that will be a pivotal moment >> eric, it's imperative to think how many different companies have sold themselves aztec companies. there is all this excitement

especially in the early stages, but here they are a year after the ipo and it's like, eh. >> every industry you're in, there's technology it's every company from rideshare to insurance can't call themselves technology companies. they are what they are people are buying cars, they're not getting into cars. it doesn't matter that they say they're tech companies, they are ridesharing companies, they're transportation companies, they're taxis. that's all they are. >> guys, why are we only focused on uber and lyft this law goes to anyone in the gig economy, doordash. i'm not saying the drivers don't matter, but let's be honest, there are probably hundreds of thousands of other people screaming, why is uber getting all the attention? what about my job. >> deirdre, i'll go to you on this real quickly, but if they succeed on prop 22, they get a car out and nobody else does

the questions about other cars in the economy remains unsolved. >> i was going to say, i don't think they're screaming. they're probably being very, very quiet hoping they don't face a preliminary injunction, but you're right, prop 22 doesn't just affect uber and lyft but it's not just uber and lyft sponsoring this door dash initiative the problem is what happens to the share economy going forward? this could be a big hit with not just prelimina just implications in california. >> we'll see if other states go that route, even california. another fight with apple is escalating, this time with news publishers apple usually takes a 30% cut from publishers for first-time subscriptions through the app store. but it's been revealed that apple has a reduced rate for amazon now the "wall street journal,"

"washington post," vox, our parent company bbc, said the company should get the same terms as amazon's, and while these two sides have been fighting for a long time, the fact they're able to say, we want what amazon gets, might be some powerful new piece of information for them >> amazon's founder is the richest person in the world. who are we we're not that our parent companies are not amazon let's face it, they get a better deal because they have more clout. these news organizations don't have as much clout so they get the deal they get. let's just leave it at that. >> altogether, are they able -- i guess it's not so much about individual cases throwing around their market power, but at a time when apple is under antitrust scrutiny, do they know, we band together, we say we're not even getting fair terms, and ultimately maybe they can win, brian, a bigger victory against them and others, like epic games, which is hosting it like an anti-apple prize night,

earn a bigger victory against apple. >> you said it, they filed a federal lawsuit. this is going to work its way through the courts you look at the app store market, like the cell phone market, it's largely a two-horse race, maybe a two and a half horse race as well the government, the doj, folks on the antitrust side are going to have to decide if these app stores, particularly apple's, have gotten too big for their breeches you'll get young and like it, and i think that's what apple is saying to everybody but amazon let's talk a little about what's on tv these days and it's football for now it looks like we will have football this fall. the nfl season will start september 10th, the houston texans versus the kansas city chiefs but the model has been similar to the mlb's and they've had huge outbreaks the cost of a super bowl ad is

$5.5 million but teams are trying to buy their way out of a commitment if football is canceled >> sure, if there ends up not being a super bowl, you have to protect your shareholder's money. if i'm writing a check for $5.5 billion, you say if it doesn't happen, can i get my money back? cbs says, we'll leave it as a verbal prowess as to whether you get your money back. i'm not sure i trust that. >> deirdre, the super bowl is still the premier event for television, so what they're able to charge for ad rates, whether this even gets on tv when streaming has so much of the market share is a tough question >> and if the super bowl does go ahead and you're getting the same rate that was charged last year, but there's more people watching it because they're stuck at home and less sports

events, you could look pretty smart to shareholders, i don't know i think it's also interesting what pepsi is doing, committing to commercials but changing the content of the commercials you'll not see j.lo, you won't see beyonce, you'll see people at home watching football. i think that's an interesting strategy right there >> what does that tell you, bri? >> the nfl is going to go on if they have to go into a bubble like the nba and quarantine a couple months as teams, they're going to do that this is like a 20 to $30 billion a year industry, by the way. >> canada. >> the allouettes of montreal. >> i've literally never heard of those teams. let's talk about the big question hanging over college football, college classes and

college parties. which one of those should be canceled to preserve the fall semester dr. scott gottlieb talked to us about how to battle these campus outbreaks this morning here's what he said on "squawk box. >> you want to have the economy functioning and able to go out to stores? maybe we should have universal masking. you want to return to a college campus this fall, maybe they'll have to give up large parties. if the universities want to, they can enforce that with the threat of expulsion. >> brian sullivan, are universities ever going to expel students for going to parties, and if not, are we ever going to stop the spread of covid >> i'm sure they will. i'm sure there will be cases to set kpamexamples what did they expect did they expect kids to come back and not be college students my son just left for college today. these kids are not worried about it right or wrong, they're not worried about it the fatality rate for people

under the age of 24 is almost statistically zero there have been fatalities and it's too many. the kids are aware of the statistics the risk, kelly, if they go to college, they start to spread it, and then you send them home. now you're risking mom, dad, grandma, the neighborhood if we start to see outbreaks, and we will there is no question there will be outbreaks they're going to have to keep them with other young people somehow. that's it. >> totally >> what did they expect was going to happen? >> i totally, totally agree with you, but you're a college student, you know you're at very little risk, but you know there are people on your campus that are at greater risk. >> stay away from them they brought them down, that's the point. they're already there. once they're there, they've got an obligation, i think, to keep them there the teachers maybe can teach virtually. they can do whatever they need to do to separate themselves from the vulnerable population 1968 pandemic twice as deadly to young people as covid.

we never talk about it, but it was twice as deadly, kille millions of people -- couple million people around the world. young people will have to lead us out of this by generating antibodies because they're able to withstand it a lot better >> eric, this came up as well in a tyler cowling piece where he argued, look, it's not the football, it's not the school, it's the parties that's the problem. >> sports, do you really need all these people to be interacting together and then they spread it they'll have to travel to skate lines to go to all these other football games any way you're putting these people together in big groups, you're going to have a problem, whether it's sports or parties it's all some version of a gathering. >> yeah, i know. we have to go. very interesting stuff as always eric chemi, deirdre bosa and brian sullivan in "rapid fire. it's the most overbought

stock. that's today's overcrowded kings. you can always watch or listen to us on the go on the cnbc app. we're back in a couple

welcome back to "the exchange." it is time for today's overcrowded kings. this one is the most bought in the s&p 500 right now. it is l brands check out these stats. here's your stat in the highest moving average the highest of l brands is 51% above its moving average right now. anything above 70 is overbought. it's sitting up there at 80. here's how we got there. its performance this year is up 64% for a mall-based retailer which tells you something. it's rallied 321% from its 60-year low. that low was $8 back in march. l brands has sprung all the way back up to nearly $30 a share.

and still to come, it's bright lights, empty city. how the pandemic could shutter some big new york city hotels for good, next then tonight at 6:00 p.m., cramer is out, but we have you covered with summer school we're taking your questions covr school frank holland and josh brown are live at 6:00 p.m. eastern time we're back in a couple u, babe ♪ ♪ with a happiness that died ♪ i let it get away servicenow. the smarter way to workflow.

welcome back the pandemic has had devastating impacts on the travel sector especially new york city hotels. a lot of which could be closing permanently. >> no broadway shows or access to museums means visitors

stopped coming to new york city. that's reflected in the latest hotel occupancy data only 20% were full last month. compared to the 89% last july. a growing number of hotels have missed debt payments that's according to data reviewed by cnbc several have shut their doors. other properties are look at convergence. bryant park being turned into office space hospitality investment bank said similar to what we're seeing in retail, prices of certain hotel properties have come down by around 20% that could create opportunities for longer term investors. sources say barry sternlick is in the process of raising an 8 billion dollar fund. part of which will be used to by distressed hotel properties. experts were concerned there were too many hotel rooms in new york get this, over the last five years, new york city has added

more hotel rooms than any other market in the u.s. >> wow, that looks like 15,000 rooms in the last couple of years. thank you. as you look at the dismal stock performance of some of the largest hotel chains, there's another head wind facing them. it's the looming threat of foreclosure. joining me is ceo of the american hotel and lodging association. it's good to have you. what do you think we're talking about in term of the scale of foreclosures nationwide? >> it's going to be bad. there's no question about it we're already beginning the see it we already see delinquency rates at 25% nationwide. those are 30 days or longer in january of this year we're at 1% it's happening it's happening right in front of us >> is that because there was no government relief or because it was limited? what happened with ppp funds

>> some could do ppp founds. most of that money, if not all of it had been used. those ratios that started at 75% and lowered to 60% required that you use it on employees. a lot of the debt out there couldn't be serviced now we're seeing the result of that >> would the fed's main street program offer any relief >> no. the main street program has ban complete failure the problem with many of these loans is you can't take on additional debt. there's some legislation in congress called the hope act which we're very hopeful for it would allow a preferred equity position that would act like a loan but it would be preferred equity that would allow the holders of the debt to make payments and get past the pandemic if something like that doesn't occur then you'll see massive

foreclosures all across the country. you look at new york where the rate is 3% houston is two-thirds. it's 66% >> there will large structures there are massive reality. not just the land but the structures themselves. the industries always going to have significant amounts of debt because they are just big dild buildings. on top of that too, one of the things that's lost is massive amount of real estate taxes that you have to pay that aren't going to be paid local government will feel the brun brunts of this as well >> what recourse, direct funds which you know will be called bail out funds for the hotel industry >> people call them bail out funds don't understand what's going on it's unfortunate that

terminology is being used. all these owners are asking for is what every other industry is getting access to. that's low interest funds so they can pay their debt and pay back those loans they are more than willing to do so right now main street lending doesn't afford that. there's no program that affords that if you would give them a lifesaver to help them through the period, they are more than willing to pay that back if they are eligible to gain access to the money. >> is the worst case scenario that all these hotels change hands. it's not going to change hotel overnight because the demand is not there. the hotels will change into something else which means thousands of job loss or they will sit vacant for years and take millions of dollars to get them back up and running again that will be years down the road >> interesting chip, i have the say, there's a lot here to think about. a lot more ramifications than i realize. thank you for coming on today. >> thank you that does it for the exchange.

coming up, hold builders are hitting new highs following blow out housing data we'll discuss whether there's more room to run this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

welcome back, everybody. welcome to friday. this is "power lunch." sitting behind me, my father-in-law has joined us for the broadcast today. stocks are higher right now. the s&p and nasdaq set for their longest weekly win streak since january. that as some upbeat economic data help to erase early losses. tesla topping