system mcdonald's repurchased their franchises as well unusual to get three beg settlements like this. >> as we head to "power lunch," i will note the dow is hanging on pulled lower by apple, microsoft, and salesforce, but still managing to be in the green. that will do it for "the exchange." "power lunch" starts right now john, thank you so much. welcome, everybody, to "power lunch," along with courtney reagan i'm tyler mathisen. courtney in of course for kelly. here's what's ahead this hour. the post fed trade today's gains fizzling just a bit. it is a hard one to track but the s&p remains just about 1% from its intraday all-time high. the dow, less than 2% from that. but will the biggest gains be found going forward in small caps a veteran market analyst makes

that case. cloud stocks over solar, tumbling over proposed new rules out in california but one analyst say the future is bright and investors should buy the dip. the supply chain nightmare before christmas we will talk to one toy maker who says it is not getting berks it is guessing worse. >> christmas is a week aawayweey the s&p is lower after a higher start. the nasdaq is the hardest hit. we ar retreating by 2% the bond market yields, lower, the ten-year is now 1.4%, bitcoin pulling back this afternoon. the cryptocurrency is now down 18% over the past month. off 30% from its year high let's get more on the post fed market move and bob pisani at

the new york stock exchange. >> the market is bifurcating again into essentially value versus growth. what does that mean in let me show you look at cyclical sectors today, i am talking about energy and banks and materials 678 these are companies that would be moving along with the global economy, macro economic factors. they are all doing really well chevron, goldman sachs, dow, inc., all on the up site on the dow jones industrial average so health care is doing well, utilities are doing well, consumer staples like johnson & johnson, coca-cola for example sectors all doing well where are the problems in technology. right across the board here. semiconductors are weak. software stocks are weak there is the second category, kathy woods arc innovation, her flagship, down another 3%. cloud computing in particular

also very weak let me give you an example of a cloud computing stock. snowflake, they do data warehousing software a few weeks ago it was $400. it dropped all the way down into the $320 range and it has been a problem ever since 20% decline and struggled since then as concerns about high interest rates is the bull thesis still intact in the answer is yes, but it is intact because the fed is only raising rates gradually. it is not aggressively 25 basis points, probably, not 50 basis points and probably not every single meeting they are going to have. secondly, the economy is really strong the factors that could kill the market, the fed aggressively raising rates and the economy waenging, they are not impressive that's why the market holing up. high growth, low profitability technologies are overvalued in this market. the market is sniffing that out and that's why we are getting

gyrations in tech jury good news, the bull thesis is in fact but we have stocks perceived to be overvalued at this point. >> interesting stuff, bob. we will dissect it further despite today's move the dow and s&p remain near their all-time high but not small caps the russell 2000 is about 11% from its record. can it catch up? our next guest is putting his money in lesser and smaller names. steven with federated hermese. why do small cap stocks make sense to you here? is it just because of the pullback or fundamental reasons we need to consider. >> let's take a step back. it has been a busy end of the year investors have been waiting for the broad santa rally to emerge. it seems like the overall market, especially small caps is set up for a rally from these levels outside of mega cap stocks we have been marking time for a while now even though fundamentals continue to improve. so you mentioned earlier we have

the s&p 500 bumping up against all-time highs with one has the understand that almost 40% the strong year to date performance in the spx has been from the top stocks, top five stocks in the index if you look, the small cap russell 2000 is flat since the beginning of february and small cap growth stocks have been down pretty dramatically over the last month i think the reality is is that we have been in this less good news environment really since the first quarter of the year. not bad news just not as good news. in the third quarter of this year we had 7 % of companies beat their eps numbers since we have had less blowout numbers in the you will smaer cap stocks we had slowing earning growth since the first half of the year at the same time money supply peaked usually money supply correlates directly to multiples. we have been battling covid fits and starts we have had the fed looming al along. in in that less than an ideal

environment the market has generally hung in will and mega caps have done very well right now we have the big bad event with the fed meeting yesterday behind us. coinciding with spikes in covid cases everywhere i was just at cvs where there was a long line for rapity tests. with poor liquidity and conservative 2022 numbers for management schemes all taken together it feels like a good spot the put money to work in smaller cap stocks as we climb the proverbial wall of worry. >> you mentioned the fed decision yesterday now we have more information about where their heads collectively are when it comes to monetary policy knowing what we know now based on what they had to say do you think you should buy in general the spire small cap space like the russell 2000 or are you individually stock picking >> at the federated kaufman funds looking into 2022 like you said we are still in a low interest rate environment.

companies with secular growth themes and pricing power will still be growing we need to get back to broader beats and raises household wealth is still very high, off a period where many stocks, especially small caps haven't done well all year we are looking at some cyclical pro-growth characteristic stocks but that have long term secular trends and very strong pricing power. loong, when you have strong pricing power and strong volume at the federated kaufman funds we don't care what's going on in the overall macro environment or interest rates, we just like to kind companies that work. >> i remember when it was just the kaufman fund before federated bought it. it was always one of the stars in small caps. i note a couple of your picks here are i guess broad brush building materials, building

supply companies, eagle materials and advanced drainage. why do you think that's a speed spot going into 2022 >> look, like i said we like stories with strong pricing and strong volume characteristics. let's take a name you didn't mention. i think it pairs well with what's going on in the environment. the ticker is lthm one of the world's largest lithium suppliers. it is vital to the oval didding economy of the future. from audios to battery storage lithium is needed ever where it can be difficult to mine process as well as reach the exact battery specifications that the industry demands. it is basically a oligopoly. penetration is low lithium prices exploded upwards, they are poised to benefit from

this extended demand in pricing cycle. eagles materials, exp, they are a manufacturer of wallboard and cement in the u.s., a little less new wave than lithium, but -- >> less sexy. >> you said it, not me but eagle is a great company. >> we will provide the sex appeal. >> they have tremendous pricing power right now in the residential and non-residential markets. there is no such thing as a new cement or wallboard company in the u.s. right now >> steven deknick low of federated funds. appreciate it. california's proposal to cut back consumer incentives throwing shade on solar stocks this week alone. solar edge down 5% end phase 9% sun run down 20% you get the idea

our next guest says the selloff is overdone and it is time to buy the dip. for more, mark straws senior analyst at jp morgan joins us. good to have you with us the california public utilities commission has had a proposed addi decision, a pd what does it say is it a done deal or are legislators and lobbyisting going to pick it apart what does it do? >> thanks, tyler at the heart of this is an issue called -- what's called net metering the idea of taking unused power from our rooftops, from our solar rooftops and sending it back into the grid in exchange for a payment from the utility the process has been around for many years as the penetration of solar has increased across the country, you have seep more approximate more utilities start to push back on the rates that they are paying for this power coming from homeowners. the decision earlier this week

from california was one of the more drastic declines we have seen they are also proposing to impose some fixed fees on just the ability to sell some of that electricity back it's proposed decision the cpuc has said they will vote on this very final determination no earlier than january 27th. in the meantime, there is some pretty interesting dynamics happening in that the commissioner that was actually in charge of this process over the past year is leaving her post she's heading off to the epa so the cpuc has five commissioners. there is a possibility that one the new commissioners coming in or one of the existing commissioners could ultimately introduce what's called an alternate decision which we think could have some better

economics. >> i don't mean to belabor this, but in the bottom line here is are monies that are paid to people with solar installations on their house for excess power. that money is paid boy power generators or power companies. and they are balking a the rates they are being asked to pay for that, which would therefore make the solar installations less desirable to the homeowner, right? >> yeah. and for a solar-only customer that's -- you know when they are in the office during the day they are not using the power they are sending it back that will have an impact on those customers, no doubt, if this proceeds. what we think in reality will happen, though, is that it will drive more customers towards solar plus storage storing the power during the day and using it when they get home from work. >> that seems to be the bright future when you get the point when you can store excess power

in a battery at your house that furthers the whole process as far as i am concerned why do you think -- give me names of companies you think are ripe for the picking now. >> to your prior guest's points, small cap stocks have been relatively weak over the past month. in addition to that, this event in california has been known as far as when the announcement would be made. so part of that weakness over the past month be that investors uncertainty about what the outcome would be right? since the decision, you kind of mentioned the weekly performance of some of these names when we look at a sun run or a sin oeva or an end phase, companies that relatively high exposure to california, but you look at the multiple has the stocks are trading at now, and the growth that investors are assuming going forward, based on

our models, the pullback in the stocks has been more dramatic than what the actual exposure to california is, even in a worst case scenario, which as we talked about, we think there are potential alternatives for it to be better. >> mark straws, jp morgan, we appreciate your time today. >> thanks, tyler. >> you bet. coming up, supply chain bottle necks are getting worse when one problem is solved, others pop up. at least says the toy maker behind care bears and my little pony. and supply chain problems hitting lennar's outlook is the long term outlook better than the short-term? our trading nation team will trade the builders

where's mom? she said she would be home in time for the show. don't worry, sweetie. she promised she'd be here for it. ooh! nice shot! thanks! glad we have xfinity, with wifi speed faster than a gig! me too! woah, look! mom is on tv! she's amazing!

(cheers) xfinity brought us together, after all! power your whole home this holiday with wifi speeds faster than a gig. click, call, or visit a store today. sing 2 welcome back to "power lunch. i want to draw your attention to shares of airbnb, falling as much as 8% as rbc capital analysts say omicron cancellations could certainly be an incremental head wind, downgrading the stock and lowering its price target to $175 from $195, calling wall street expectations simply too high, writing that if high-end property rentals moved towards direct bookings that could challenge the likes of airbnb. now the stock is on track for its worst month since may, off by around 27% from its 52-week high and underperforming other travel stocks today, as you can see there. court me, back to you.

>> thank you seema. turning now to the supply chain, creating a new nightmare before christmas for toy makers. a whopping 83% of the world's toys are produced in china with global shipping rates up to five times higher than prepandemic levels plus covid lockdowns and labor shortages leaving containers stranded it is nearly impossible to get everything here in tomb for the holidays but they are battling back, setting up war rooms in hong kong in & from florida with teams working around the clock the get toys to consumers. but is that enough to overcome the unprecedented challenges jay foreman joins us, ceo of basic fund it is great to have you back giving us a pulse check of where we are we know that the government got involved they were asking for longer hours at the ports in california is that helping at all relieve some of the congestion >> it sure does help relieve the congestion and helping to get

products to stores while we were all panicking in september and october, the consumer responded, got out early and started to buy and the supply chain is filling up but the fact that the ports are working 24/7 to up load the ships causes new problems. the new problem is, so many containers are piling up not just with this christmas's merchandise but all the merchandise that's due to be put on the shelf after christmas on top of that, there is a big problem with getting the empty containers, the big metal containers, back to the port and back on ships to send back to china so when the next round of merchandise is ready to go they have enough of those containers to fill up right now, there is a shortage in china of those metal containers so every time you solve a problem, unfortunately, a new problem crops up. >> we spoke about how basic funds includes iconic toys you also point out that while

you do sell many well-known toys and you aren't necessarily a small rye retailer you are not as big as a walmart or costco or target or home depot that's chartering their own ships it seems like they have been okay with their inventory. things are working through is that not the case if you are not that big and you can't afford the charter your own ships? >> for sure. that's why we are working in war rooms 24/7, because we have to scramble to fine all the empty space. listen, those big retailers employ a lot of people and supply a lot of merchandise. that's the benefit of being big. it is the small guy that's really got to scramble ask the frustration on the part of smaller vendors like ourselves is we don't seem to get representation when the administration is having meetings to talk about supply chain there is never my small guys there, no basic funds there. we are sort of left to our own devices to try to figure out how to get capacity on these container ships and bring our merchandise in

sometimes a lot of our merchandise will go to places like walmart or target but they are also going to learning express and the local toy store on our corner or in our shopping mall. so it is -- the little guy always has a problem. >> can you give us, our viewers, an example or two of items this year, this holiday season, that you weren't able to bring in at the level of stock that you anticipated? are there a couple of secret examples that you said, well, we couldn't get the large sized care bear, but we got a lot of the smaller ones >> absolutely. 100% the mighty dump truck is big, about so big the freight on that truck went from $2 a piece to $10 that truck only retails for $25 to $30 when the cost to bring it in alone is a third of the cost of the selling price of product, it

really gives us a problem. so we have left thousands and thousands of trucks back at the factory because we just can't afford to bring them in. so that means a little bit more scarcity of the product here, also less volume and less profit for our manufacture. >> it taektsz you all. let me turn to another question in a has been per plegsing me for weeks now. how did it all go so wrong why was everything working very smoothly, it would seem in 2016, 2017, 2018, 2019, and this year it goes blewy, and everybody says we can't get stuff, and the prices are five times what they were for containers? what happened? >> well, really, two things happened obviously covid. when covid in 2000 closed down the factories there was a complete rebalance of where all the shipping ended up and was stationed. then when china opened back up, the rest of the world closed down the u.s. and europe closed down.

it really caused an imbalance. i think about it like the conveyor belt in that lucille ball skit? yeah, right. >> where they have got to shove the candies in their mouth because they are just piling up. you have this whole confluence on top of demand increasing by 30% for these types of consumer products ask the shipping capacity is only geared for 100 to 105% there is just so much demand and not enough capacity, whether it is truck, rail, or steam ship, to bring it in and it just causes chaos, just like that conveyor belt. if you want to add one more sort of complication to it, think about just trying to get the chocolates in the box and ship them imagine if you had to get all the empty boxes returned and sent back to the factory instead of discarded we have to get all of those containers back. that causes another tremendous problem. >> yeah. >> and of course the imbalance in labor we don't have enough labor in this country from top to bottom.

>> obviously a confluence of things but high demand and a capacity that could have absorbed 105% when you have got 130% demand, that's the basic -- and some of the containers were just in the wrong place at the wrong time, right. >> absolutely. >> jay, thank you very much. happy holidays and may all your toys arrive on time >> thank you we are working hard to loan santa's sleigh. >> i watched fred claus last night. vince vaughn and paul giamotti, inevitability. it was supply chain stuff. i want to look at the nasdaq it is currently trading at session lows it has been the problem child lately adobe, xilinx, skyworks nvidia nvidia impossible yes, it is down a lot. among the worst performers today. coming up, get ready with your engines, the activist underdog that made waves after winning a

proxy battle against he cannon speaking exclusively with cnbc saying their esg fight just getting started. plus a critical flaw in a widely used software raising alarms across the internet the head of cyber security and infrastructure security agency says log 4 j is the most serious vulnerily abitshe has ever seen. more on that when "power lunch" returns. i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people

achieve their financial goals. visit findyourindependentadvisor.com huh. is that true? geico's been saving folks money for 85 years? yeah, that's right. wait — so if geico's 85, that makes you — are you asking if i'm 85 years old? i mean sea turtles live to 150, so...nn — i — i was not. do i look 85? what! no! you, you look young, fff...you...you, you look young for...however old you are. geico. saving people money for 85 years.

hey businesses! for...you all deserve are. something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like ones that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing customers our best deals on every iphone, including up to $1000 off the epic iphone 13 pro.

welcome back i'm rahel solomon. here's the your cnbc news update at this hour majority leader chuck schumer is delaying consideration on president joe biden's build back better spending bill until next year according bloomberg biden has been talking with the democratic hold out senator joe manchin but apparently has knot convinced him to pass anything this month manchin says he doesn't want the government to spend too much just as inflation starts to gain speed. three states reporting five deaths from severe storms that moved through the roy moore with strong winds and suspected

tornadoes. the winds left significant damage in their wake. to the south, windy weather is combining with dry conditions to spark brushfires in oklahoma and texas. residents had to evacuate. after three months of eruptions the video on the spannic eyend la of la pauma has been silent this week. look at what the eruptions left behind a massive lava platform that engulfed banana planttations and also some buildings. officials will wait until next we are before officially saying the volcano has stopped erupting >> those pictures are astonishing. >> i will say. >> wow mother nature. thanks, rahel, appreciate it. engine number one. it is not one of the toys we were just talking about. it is the activist underdog who took on exxon and won. so does engine one's ceo expect similar fights in the months ahead. leslie picker spoke with them.

>> j must a year since the firm was started engine number one has taken many routes to try to further esg goals, a white paper supporting gm's electric vehicles pivot and several etfs. exxon is what corporate america thinks about when they hear the name engine number one and start to assess their esg vulnerability. the c suite can take a deep breath, though. >> exxon is an outlier you may as investors, and we feel like we were able to go and make this argument, make an economic argument be the tip of the spear on this conversation and a lot of people came with us and followed us that we took on activist approach. in everything else we think it will be more of a constructive approach like what we do at general motors. >> i asked whether she was happy

with exxon's recently announced goals to reduce greenhouse gas intensity by 30% over the next eight years. >> well, we are glad exxon is starting to make some progress on these issues. since we started the campaign a year ago but our perspective is still that it is a company that has work to do on governance and work to do on sharing with the market a strategic plan over time for how their business transforms we would like to see more there. and we are happy that we were able to lead a campaign that puts the right capabilities in the board room so there is an opportunity to have that conversation now >> i probed hadar to see whether she would be open to running another proxy battle against exxon. she said, and i quote, we will be watching them you can subscribe the our tlifing alpha newsletter through the qr code on your screen or via our website. >> how is that for a tease for the newsletter

up next, what is giving millennial millionaires their mojo they think crypto is the key but oldeinr vestors still aren't conv convinced. the result of a brand new cnbc survey, when "power lunch" returns.

xfinity rewards are our way of thanking you just for being with us. enjoy rewards like sing family fun nights! rent sing for $1, then belt out all your favorite tunes from the movie with sing karaoke. plus, see sing 2 in theaters with buy-one-get-one free fandango tickets. join over a million members by signing up for free on the xfinity app. our thanks. your rewards.

90 minutes left in the trading day. we want to get you caught up on the markets. stocks, bonds, commodities, and how crypto is helping mint new millionaires let's begin with dom chu on today's action in stocks as nasdaq, dom, heads towards daily lows >> just about there right now, tyler. today feels like a day where things are shaking out after an unexpected upside run yesterday in the face the fed telling everyone they are going to tap the brakes on the economy and of course the markets today it is more about figuring out what's going to work going forward and what's not it is hard to generalize but it is kind of like growth versus value again. here's what it locks like from an etf perspective vtv against the vug, 1% gain for value, 2% losses for growth. you can kind of see there. now, what's behind the action?

you have got software cloud semiconductor stocks taking it on the chin. think adobe. the worst performer in the s&p 500 right now. or think shopify or workday or maybe inindividual why or advanced micro devices men while, bank stocks like wells fargo and consumer staples names like kraft heinz are outperforming regardless of any promotions heinz might have about not paying you to make cheese cakes this holiday. >> thanks, now to the bond market where yields continue to drop despite the faster taper and potential rate hikes rick santelli is tracking the action bring us up to date on the markets. you said something in note yesterday. if the federal wanted to accelerate the taper -- i mentioned this at i believe 2:30 yesterday, why don't they just pull the band-aid off all at once and just say i am stopping

the taper now -- i moan i am going to stop buying the bonds now. >> i am asking the same question >> yeah. >> yeah. the market is telling us that's exactly what it was thinking why? because all interest rates are lower today. five-ier down 6.5 basis points 30-i don't remember is unchanged. tyler, i think you hit the reason why, because, trowly, you could call yesterday hawkish you can call it a pivot, but let's look at the facts. they are still buying, although a bit less, and interest rates are basically still at zero. none of that is really going the change until we get the spring, and the market wants something quicker. it wants more rate increases it wants some rate increase sooner now, i am not saying that you need to go wild and raise rates a lot. but the market does have an opinion. look at intraday of ten. after the two central bank meetings were over, our rates nose dived if you look at month to date,

this is important of the two year guilt, the two year instrument, the sovereign instrument in the uk it was up three basis points more important, it turned the market, rates are going down, now they are moving up that's what would have happened if our fed would have done, that we have seen rates move up if you look at what happened at the ecb, a completely different story. there is their two-year note it is going nowhere quickly. unchanged in a sideways trade. finally the yield curve, teps to twos, one week, flatter than it was at 83 on its friday close last wee if you look at a november 1 ps start, hovering at 2 machine month flat at 0 basis points that would have steepened if they had been more aggressive. tyler you are a smart guy. >> rick santelli thanks very much oil closing for the day, heading for the highs of the week.

pippa stevens is covering the highs for us >> tyler, oil is debting a boost today as it continues to climb back to where it traded before omicron became a concern for the market traders appear to be betting that it is not going to have as severe a demand impact as initially thought. wti is up 2% at $72.23 brent crude is up 1.5% at $74.93 a positive data report is also supporting prices. u.s. gasoline demand hit 9.5 million barrels per day. this is notable because that tops the prepandemic level from december of 2019 according to commerce bank. but the firm said it is skeptical this good sentiment in the oil market will be carried overinto the first quarter instead they see supply significantly exceeding demand ubs saying while prices will remain volatile they are bullish on global and national oil stocks into 2022. let's turn now to the word

that's on everybody's lips, crypto cnbc showing the new members of millionaire club have a hefty portion of their wealth in crypto robert frarch joins us with the details. hey, resident. >> hey, tyler, more than 80% of millennial millionaires own coinbase what is more surprising, how much they own. according to the survey, more than half of millennial millionaires have at least 50% of their wealth in crypto. nearly a third of them have 75% or more in crypto. compared with baby boomers, only 4% of any boomers have any crypto the numbers suggest it is a main source of wealth for many millennials. half of them plan to add to their crypto investments over the next 12 months only 6% planning to reduce their crypto holdings. millennial millionaires are bullish on other investments as

well most plan to add to their equities next i don't remember they had the highest forecast of any generation on the economy, interest rates, and inflation. tyler, they like everything right now, and they want more of it back to you. >> robert, thanks very much. robert frank. >> what's wrong with that? so we like stuff justice tooezing. up next, we continue our "power lunch's" dryer's manual breaking the auto industry down to find the best auto investments. we have built the cars and maw we are looking at ere whto buy and sell them. stay with us for that. at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

trading isn't just a hobby. it's your future. so you don't lose sight of the big picture, even when you're focused on what's happening right now. and thinkorswim trading™ is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community sharing strategies right on the platform. because we take trading as seriously as you do. thinkorswim trading™ from td ameritrade.

it's time once again to open you are your driver's manual, our periodic look at the automobile business from top to bottom today we look at used auto retailers, companies like car max, group one automotive, and l littia moergts david from morning star joins us demand for used cars has never been, i don't think, higher than it is today. that means that used car prices are higher but does that -- so, does that affect the margins that these

dealers can earn on sales? in other words, they have to pay more to acquire the used car, and then they can sell it for more but can they keep their margins. honestly, when you lock at the franchise dealers like a group one or a lithia, their eabout it margins are what a couple years ago would have been ludicrous to model, now 8%. before the pandemic, a dealer could do 3 to 4% the way the dealers run the business they look more at gross poverty dollars and worry about where the margin comes out at the end of the day might now margins are strong because the pricing power is excellent because there is no inventory. you would think no inventory would be bad for the dealers earnings but they have outstanding pricing power. >> why is there so little inventory among used cars. we know why there is less

inventory among new cars, having to do with the chip shortage and other supply chain things. but why is there less inventory among used cars? >> the two are connected when the pandemic hit that caused a crash in new vehicle sales. but people are not coming in to buy a new car and trade in used vehicle. you will see used vehicle prices -- this happened also after lehman brothers. used vehicle praysing initially tanks but skyrockets because the inventory dries up unfortunately, with 2020 and 2021 we had the double whammy of the pandemic, because of the pandemic, the chip shortage, which was really bad around mid 2021. >> tyler and i were in the market for new cars. i bought a used carp i hadn't bought a car for 15 years. if you are looking at more than just the cars, you want to buy stocks, you want to invest in

companies behind this used car trend, where should you put your money? what is the best way to play it? >> publicwise there is not tons of companies, there are digital start-ups like carvanas and i think everybody is familiar with car max. but there is also the six publicly traded franchise dealers that i cover, names like littia motors, group one, sonic, penske, auto nation, et cetera littia for me does look extremely interesting. years ago i was on cnbc and said they were the walmart of auto dealers. they are because of their specialty in the rural markets but since that time they have also expanded into metro areas and they are just growing voraciously right now. actually, i have their growth of what i call a 50/50 -- what they call a 50/50 plan. i call that louis courthouse mode or plaid now. it is outstanding growth

and honestly they are ahead of schedule to do it. >> very interesting stuff. it is an interesting market. i am sure will it continue to heat up, especially until we figure out this chip shortage, and maybe until people want to go back to using public transportation a little bit more, too. dave winston thank you for joining us. >> sure. up next, the supply chain home wrecker, lennar share prices are sinking because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work.

you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

you're watching "power lunch. i'm seema mody lennar tumbling after weaker earnings than expected home builder squeezed by higher lumber and wage costs and material shortages weighing on the housing group. home construction etf falling after a serge in housing starts in november. its best month since march one of our next traders says could be more pain ahead for the home builder trade bring him in, and matt, housing incredibly strong thanks to lower rates, lower inventory as well, but lennar's results, how concerned should investors be?

>> well, i just think it's not a major concern. i mean, they talk about this issue with lumber prices lumber is getting very over bought on a near-term basis. some point first quarter next year will pull back. however, on a near-term basis, look at the chart on the itb, the mac d chart, measure of momentum with a great run and starting to lose steam having what they call a negative cross. several of those in the last year and each time followed by a near-term pullback that lasted a couple weeks what i'm saying not so much a disaster for the group by any stretch, but you don't want to chase the group. let the group come to you. able to buy it the next couple of weeks even though i still like them long term. >> and what do you think three interest rates hike th set for next year, where would you put your money >> look, this sector is sensitive to interest rates, but still a huge shortage of

inventory. the need for housing will continue if you look at the last time we saw rising lumber prices, beginning of the summer, the home builders really shrugged that off and managed to end it higher highs this past year over the course of the year i think right now what you're seeing is the double whammy of this sort of a low period in the housing market along with all of these pressures. once the market picks back up and it will pick back up these home builders should continue to benefit. >> got it. gina and matt, great to see you both for more "trading nation" head to our website and follow us on twitter. tyler, back to you. >> thank you, seema. coming up, one software flaw could leave the entire internet at risk. eamon javers has details from one top cybersecurity defender we'll be right back. >> announcer: now the latest, and a word from our sponsor.

("jingle bells") ♪ (doors knocking and bells ringing to the music) ♪ - [announcer] this holiday season, give the gift of grubhub.

welcome back to "power lunch" everyone. session los dow off more than

2.8% 2.75% now. s&p down more than 1%. dow, only index higher top of the hour at its peak up 262 now down 119. about one-third of a percent >> yeah. the government's top cybersecurity defender issues the most serious warning to corporate america about the recently discovered software vulnerability. ayeamon javers spoke with her earlier. a strong warning. >> right jen in charge of the cybersecurity agency chief defenders in the federal government defending against cyber attacks. her first chance to go on-camera since that log4jam calamity happened last week what she had was alarming. >> the most serious vulnerability i've seen in my decades-long career.

everyone should assume they are exposed and vulnerable and to check and make sure that they're not vulnerable. >> this vulnerability became public last week but dates back to 2013 when the flaw was introduced to open source software copied in millions of other places and now sort of gone viral in the software sense to the point where it affects all these different systems. i asked jen easterly about the origin of this where did this thing come from and asked if she knows who had their fingers on the keyboard and who was programming the code in 2013 and what their intent was? this is what she said. >> i don't -- i don't. >> you don't know intentional vulnerability put into open source software? an accident on the scale of like y2k? >> we don't know that yet. again, a lot of work being done. not in my agency, to understand. but this is something that everybody should be concerned about. not because of where it came

from, but because this is incredibly dangerous to everybody's business, everybody's networks, everybody's system. >> easterly told me the department of homeland security is looking into the back story of this and expects it from her agency and others we'll learn a lot more where this all came from in the weeks and months to come, but meanwhile said scisa posted on its website a list of things companies can do if concerned about this a checklist to go through and watch for your vulnerabilities and how to best patch your systems. coming in from venders and vendors of vendors and vendors of vendors of vendors. >> she used the phrase "everybody." does she really mean everybody >> she means everybody millions of devices around the world. common piece of software cut, paste, add it to other products and goes everywhere. ubiquitous that's the problem. >> all right

eamon, thanks. eamon javers reporting from washington you have ever been hacked? >> i don't think so, but i feel it could have happened and maybe i didn't know it. >> i have, but it was taken care of rather quickly. i did have a, an episode like it, but it is a very disturbing moment thanks for being here. >> thanks for having me. >> great to be with you. thanks for watching "power lunch," everybody. "closing bell" starts right now. and welcome to the "closing bell." at the new york stock exchange a strong pre-market picture giving way to down beat session on wall street nasdaq sharply lower as we head into the final hour of trade. >> ping-pong session i'm morgan brennan in for sarah brennan. tech under serious pressure and adobe and chip stocks seeing biggest declines and mega tech apple and tesla falling as well and investors trying to make sense of the fed's latest guidance including a mor