driven by all those covid tests. >> okay, jason snipe >> bank of america steady loan growth coming back, stay long here >> josh brown? >> carlyle group >> let's take a look at peloton again as we head out before we hand it over to "the exchange. again, that cnbc scoop, shares are still halted, the company halting production of some of its bicycles and treadmills because of waning demand it is a story we just broke. you're going to get more on it right now on "the exchange." guys ♪ thank you, scott hi, everybody. i'm kelly evans. peloton will reopen at 1:07 p.m. cnbc.com's lauren thomas just broke this story she's going to give us all the details she has in just a moment rk is rallying, the chinese stocks are flying, the semis are higher the nasdaq is leading the rally

today. growth has been sold off hard, but we'll speak to someone who says the stocks might be ready for a comeback speaking of china, the central bank cuts rates while most of the rest of the world is talking about hikes. we'll look at why and whether you should fade today's rally if the chinese economy is headed for a slowdown the big reports get set to come out for netflix but let's start with dom chu for the latest market numbers. >> the market numbers right now are generally positive theme throughout the course of today's session, albeit off the session highs. just to give you some context, we are currently up 300 points in the dow we were up 461 points at the high so a pretty decent pullback on an intraday basis. the s&p 500, 4579 the last trade there. the clear outperformer in today's session up by about 200 points 14,540 the last trade there. one of the reasons the nasdaq is outperforming and trading today

has to do with those mega cap technology stocks and media type stocks that have been really hit hard over the course of the last several weeks here apple up about one-quarter of 1% amazon is down just about a quarter of 1%. tesla's up 3.5%. so the five biggest companies in the s&p, helping to drive some of those gains at least in trading so far today and if you're looking for one of the more volatile places where people are seeing some real outperformance, it's in the electric vehicle/alternative energy industry. take a look at these names sunrun, up 10% plug power up 7% sunpower up 6% now, on a year-to-date basis over the last couple of weeks and over the last year we've seen some down trends for many of these names so alternative and ev type stocks have been really volatilized as of late >> dom, thank you very much.

story of the afternoon, very quickly becoming peloton the shares reopened after being halted twice they're now down more than 20% all of this after a cnbc.com scoop published in just the last 15 minutes or so that the company is halting production of bikes and treadmills as demand slows. that's according to documents obtained by cnbc take a quick look at the share price behind me. peloton is trading down 25%, let's call it, to $24 a share. this company went public at 29 in september of 2019 the opening trade was 27 so we are back below the ipo price and well below the highs of $161. cnbc.com retail reporter lauren thomas broke the story this afternoon and she joins me now what can you tell us >> thank you for having me, kelly. like you said, really volatile trading going on that stock right now after we published that piece so essentially what peloton is facing right now is it really wasn't able to determine what demand it was going to see

coming out of the pandemic it saw so much demand last year, sales up triple digits year over year and now that's really waning and essentially falling on of a cliff. what i was able to see in these documents that i did obtain was peloton is continuing to reduce its forecast for demand, and it's in a position now where it has so much inventory on hand, so much supply, but the demand from consumers just isn't there. so, like you said, the news here really is that peloton is temporarily pausing production of its bike, its bike plus, as well as its tread product for a period of time to try to reset those inventory levels again, this is really a continuation of some news that has broken out over the weekend. we reported earlier this week that peloton is now working with mckenzie to look for ways to cut costs, that is likely going to entail layoffs as well as store closures >> what do you make of the news that just before this they raised the price or they kind of

added the delivery and setup charge into the price of the bike instead of making it part of the deal? >> it's a bit of a 180 honestly. because, if you recall, last year peloton actually lowered the price of its bike. and at the time that was really a pitch to make it a more affordable option for consumers. i think the hope was that it would increase that total addressable market for peloton to where it could increase demand but from what i've seen, again, from these internal documents is that hasn't really gone as planned, one and now that it's facing, you know, inflation like many companies, it has to try to pass on some of those costs, those supply chain costs and setup fees to the consumer now so the bike price is actually going to go back up by about $250 and the tread will be about $350, more expensive starting in february >> i feel for them somewhat because the pandemic is such an unprecedented situation. they bought, was it precore they bought all these facilities so

that they could make enough bikes to keep up with demand now that seems to very quickly have reversed. should they have just stuck with the bike there are so many other products they're trying to launch they have a strength project, they say there's been low email capture for that we know the tread had issues of a tragic death of a young child. i'm just curious, if they kind of did too much with the moment that they had? >> yeah, absolutely. i mean, i think that's consensus from folks that i talk to, especially when you look back last year they announced a $400 million investment and a facility in ohio they just recently broke ground on that. it's not yet expected to be up and running until 2023 now the goal of that project was, again, to increase manufacturing capacity but now we're at a point do they really need that capacity? so, they have made these investments, they acquired precore, but at this point as demand is kind of settling out to maybe a more normal level, it's unclear if they will really

need that capacity moving forward. and you mentioned the guide, which is strength product. it had expected to go on sale last year. that's what i see in these documents. but it's actually been pushed out now to as late as april, peloton is saying that it hasn't quite seen the interest from consumers online, that it was expecting when it made a media splash with that product recently >> incredible. again, the shares are down at 24, which is probably an all-time low if they opened for trade a couple of years ago and they're ipo at 27. so a huge sort of 360 for them, we can call it, over the past few years. lauren, thank you for your reporting. thanks for being able to join us so quickly we really appreciate it. >> of course thanks for having me >> lauren thomas for the full story, go to cnbc.com let's switch gears now, broaden things out, get macro and talk about the battle of the birds at the federal reserve a group of hawkish policymakers who are preferring to move more quickly to raise rates and set

against the balance sheet, they're worried about the fragility of the economy steve liesman is here with a bird's eye view. >> thanks, kelly with president biden nominating three new members to the fed board, there's the potential for a pretty drawn policy debate that pitched new washington doves against a block of midwestern hawks and issued everything from the amount and the pace of rate hikes and balance sheet reduction to bank regulation and the fed's involvement in climate change. fed governor nominee lisa cook is a bormer obama administration economist. the street thinks all of these and sees doves in their potential monetary policy. they could come up against a group of emerging midwestern walks who include fed governor waller he was research director in st. louis for the current president bullard.

they have typically been among the more hawkish fed members, at least they were before the pandemic all three presidents have the vote this year in the middle put fed chair jay powell and lael brainard nominated now to be vice chair so far little space between them on monetary policy, although some differences when it comes perhaps to bank regulation we don't know much about the new nominees at zero rates and a $9 trillion balance sheet, there may not be much difference between hawks and doves, at least earlier on the debate could emerge later this year over how far and how fast the fed should go in tightening policy. >> absolutely. we expect it to. they're under a lot of pressure. steve, thank you we appreciate our steve liesman reporting. and a quick programming note treasury secretary and former fed chair janet yellen will join "closing bell" for an exclusive interview today at 4:00 p.m. eastern. my next guest says if growth stocks could turn in good

earnings, they could still barry, welcome your thoughts on the risks around this fed tightening >> well, i see two things. in chinese mythology there's a dragon called hung, the rainbow dragon it's got two heads one is covid for us. the other is the federal reserve. the covid head is going back to sleep even though our company had to cancel a 50-year anniversary trip because of covid. it is going to go back to sleep. it's the other one, it's the federal reserve. and we just look at that, you know, the trade reporting that you just had at the beginning of the year it went from an expectation of three hikes to four hikes. and what has the stock market done since it's gone down next week we get the information from the federal reserve of what they're really thinking. and fed chairman powell is very good at communication. so i don't think there's going to be much of a surprise but if it's not above four times this coming year, i think the market will start to settle down >> all right

so, what would you do then in that investing environment i know you're not typically the kind of person who looks to growth stocks or, you know, people right now are all tilting towards value and thinking that's the surefire trade for the year >> yeah, that's a great question, kelly. you know, in our golden rainbow fund we have stocks and bonds. on the bond side if i had cash two years wouldn't go beyond two years, that's the steepest part of the curve you do something called riding the curve down over two years you at least get your 1% interest back regardless of what happens with the fed this year. on the other side on the stock side, we really do see that the re-opening is going to be very important and higher interest rates is going to be very important. the higher interest rates hurts growth stocks because they're based on the value of those future earnings, and they're not worth as much today if interest rates go up. so, more the value, more the cyclical types of names, and that's what we would be favoring

from energy stocks to finance stocks to industrial types of stocks at this juncture. not that the others you have to get out of them entirely, but that's probably where the next wave really is going to be >> you guys like pioneer, regions financial and eaton corp you do think this earnings season could be a period and i'm wonder figure the banks are already starting to tell us that their earnings missed in some cases depending on the metric you look at. the stocks have been down substantially. and what do you expect as earnings season continues to play out could be a bit of a rotation here? >> well, and the banking sector, you're right, we're seeing some misses and that's mainly because of personnel costs in order to attract and keep the people that they want. the larger banks and regional banks are having to spend more but if we look this year so far this year, all those sectors down, one of the few sectors that's up this year is the finance sector, and that's because of the steepening of the yield curve. it does make things more

profitable for a lot of these institutions so, i don't think i would be afraid of them at this point, and it might actually be some good entry points as these prices have come down pretty much so far this year. >> all right, barry, thank you it's good to see you we appreciate it still ahead, chinese stocks are leading the market after their central bank cuts a key lending rate jd.com up more than 10%. is this the start of a longer-term rally? that's next. plus, a major tipping point for evs. bank of america says this is the year and has the names they think will come out on top "the exchange" is back in a moment >> this is "the exchange" on cnbc

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welcome back to "the exchange." a huge jump in chinese stocks today after their central bank cut lending rates. sectors got hit hard during months of regulatory crackdown and deleveraging the k-web is tracking for its best month since january 2021. it's up about 7% just today. joining me is the chief investment officer with craneshares. this is certainly good news a lot of these investors have been waiting for. but how good news is it?

>> the economy is softening, but certainly we think that similar to what the great scoop cnbc had on peloton is what you're seeing in china, what will happen here is that you're having global stimulus come down and that's going to be a big problem, an issue for china because a lot of the economy's been supported by export-driven manufacturing. and over the last week, we've seen a movement toward monetary easing in china. and we also believe that's going to lead to a pick-up in consumption that domestic consumption has to offset the weakness we'll see in export-driven manufacturing. and that's going to be a great thing for the e-commerce companies within k-web >> what prompted this rate cut >> china faces some challenges that china obviously put up a grave gdp number in 2021 but export-driven manufacturing has really held up really well again, driven by global government stimulus. as that comes down, that

export-driven manufacturing is going to slow. so china needs to hand baton off to domestic consumption. we saw the loan prime rate cut we saw the medium-term loan rate cut earlier this week. we believe that there's a bank reserve cut coming in the next month, maybe two months. a lot of the policymaker indication is toward more easing, more support of the economy. >> which would signal to everybody that maybe the big crackdown is over. i mean, do you think that's what's happening as we start to approach that sort of party later this year? do you think it's time for them to start shoring up the economy? >> i think that they have to, that the economy has really been supported by this export-driven manufacturing. and as that slows, what's going to offset it domestic consumption is something where the chinese government can stimulate the consumer they can provide incentives.

they're also going to be monetarily easing to try to support the broader economy. but i think 100% you have a combination. you know, last year we dealt with archigos, we dealt with the china internet regulation. we've got the holding foreign companies accountable act. and i think in november and december we dealt with a lot of tax loss harvesting in the individual stocks. and as these issues abate to varying degrees, investors are really underweight these names and you kind of know the market does what's least expected, and a k-web rally could certainly catch a lot of investors flat-footed. >> it would. what else, finally, can you tell us about how much people pulled out of this area, how underinvested might they be right now? >> we know a lot of global equity mandate, a lot of global emerging market mandate managers have been underweight china. they're overweight india

and particularly within china, historically, they're not buying bank of china or, you know, energy stocks in china they're buying the alibabas, the tencents, the jds. so that historical overweight to the china internet space has become an underweight. and that's what makes days really the last several days where you see not only china outperforming india but particularly these china internet names outperforming india by a significant measure that's creating a lot of pain in the active em world. those managers need to balance, they need to catch up with this by coming into the names >> very, very interesting. and they help explain why we are seeing such a pop today. we'll leave it there thanks for your time today coming up, finding a home to buy in this market is getting more difficult, exsh it's also getting more expensive thanks to rising mortgage rates. we'll look at what that means for the market plus, we're digging into one sector and hunting for yield

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hi, everybody. welcome back we are seeing green in the markets today. the nasdaq, which had been leading the way, down leading the rebound today with about a 1.2% gain. dow's up 265 let's get another check on peloton. the shares are dropping substantially on a cnbc.com scoop that they're halting production of bikes and treadmills this was according to internal document shown to cnbc the shares are down 17%. they're at 2640 so they're below the ipo price from late 2019 but above the all-time low of about $17 and change that we saw back

at the pandemic lows in march 2020 before it absolutely took off to the upside. we'll continue to keep an eye on it meantime, the chipmakers are actually higher today. having its worst week since march 2020 amd, micron and on semi are underperforming but the it's up there around 287 amd is down 12% in january for its worst month since 2018 moderna also underperforming it's the biggest laggard in the nasdaq 100 so far this year. it's down 50% in three months, it's back to 173 still, stocks are mostly higher so let's end on a positive note. we're seeing big rebounds in the rental and resale names like these. and poshmark's case, it's up almost 10% today a lot of these names still more than half below their recent highs. still ahead, netflix, csx, and

slum ja all set to report results. we have the action on all three stocks in "earnings exchange," next

on "squawk box," the big picture on netflix, reaction and

analysis how the results could impact f.a.n.g. stocks. what investors need to hear now. tomorrow, 6:00 eastern watch "squawk box" any time on demand welcome back to "the exchange." i'm rahel solomon. the house panel investigating the january 6th attack on the capitol has requested an interview with ivanka trump. the committee says it is seeking information on her communications with her father during key moments that day. ghislaine maxwell has formally requested a new trial after a juror on the case said that he had been sexually abused as a child but failed to disclose that information to the court. a new study says big box stores could generate half the electricity they need using rooftop solar panels the study says walmart and target have the biggest potential for solar energy production and an update now. a british belgian teenager has

become the youngest woman to fly solo around the world. the 19-year-old touched down in belgium this morning to complete her five-month journey she visited 52 countries and covered some 32,000 miles. kelly, i don't know if you remember, but you and i talked about this when she was taking off. time really flies, i guess >> amazing that is an education that is amazing. it's her college essay now thank you, rahel it's time for another edition of "earnings exchange" where we give you the action, the story, and the trade on three stocks to report netflix is reporting after the bell the street expecting earnings of 82 cents a share on 7.7 billion in revenue for the fourth quarter the stock is 25% off its recent highs. and it missed wall street's earnings estimates in five of the past seven quarters. joining me now with the story on netflix is our own julia boorstin and cnbc contributor

steve grasso is here with his zip-up turtleneck blazer >> i went from the woodsman of westchester to this now. [ laughter ] >> julia, kick things off for us >> well, kelly, you know with netflix, what's even more important than this top and bottom line numbers is subscribers. netflix itself forecast that it would add 8.5 million subs in the fourth quarter analysts are more skeptical. they're forecasting 8.2 million subs in the fourth quarter but what is even more important than q4 subs is the guidance that netflix gives for the first quarter. analysts are hoping that there will be 6.9 million subscribers projected, and, kelly, we know that the vast majority the subscribers both in q4 and in q1 will be added internationally. netflix is investing a huge amount in content. they are expected to spend some $19 billion on content this

year that's an estimate according to wells. and that would be up 13% from what they spent last year. and then of course they've been rising prices here in the u.s. in order to compensate for some of those higher content costs. so we'll be listening for any commentary on what kind of turn they expect, whether they think their subscribers are willing to pay a little bit more for all those big shows and movies that they debuted in q4 and that they have lined up for this year. >> this is a stock that there are arguments, we've seen them again today, about what the most important metric is for earnings is it subscriber numbers, is it not? but they missed on five of the seven past reports on eps, you wonder if that's just as important these days >> i was going to say i think you started it off perfectly because if it feels to me that they're losing momentum, it feels to you the same thing. that's how you pose the question like that. the other question i have is i get that they have to raise prices and they do have pricing

power. they are the king of content but when you think about it, kelly, i think they're trying to make up for slowing growth so, when they originally would raise prices, they were raising when they were the king on the block when it came to streaming. when you look at the technicals on the stock, they're right around support where it should be but i can make the case that it could trade, i don't know, $30 lower, $40 lower that equates to a 6 or 7% drop from now so, i know as a trader you have to be prepared for the binary situation. it is at support, the stock could pop from here. i think it's more likely to pop short term, collapse maybe another 5 or 6 or 7% >> julia, do you want to just respond to that? because i've wondered the same thing about this price hike. does it come from a position of strength or maybe of a little bit more weakness? >> well, look, the analysts seem to think that it comes from a position of strength about 70%

of those analysts have a buy rating only less than 10% have a sell rating on this stock. i think what we're seeing is this expectation that we'll see a big jump in subscribers in the fourth quarter this would be the biggest subscriber gain number we've seen in a year and that's because there was really a lull in the new content that was added in the first half of the year. and a lot of that was due to covid delays so the question now is whether the fact that they had a really strong content lineup in q4 and whether they're going to -- and the expectation they're going to continue to have that kind of content lineup, whether that really helps drive the subscriber growth numbers and whether netflix has become a must-have. there is a lot of concern right now that we could see churn more broadly among the streaming subscription services. people only want to subscribe to so many, and they've been paying for a number of them so is netflix one of the ones that people have to have the expectation is that it probably will be, maybe keep that, disney plus, one or two others but maybe not six or seven that you

might've signed up for in the depths of the pandemic >> that is a good reminder of the peloton story that's playing out today and what's happening to some of the these companies we'll talk some schlumberger those shares surged 50% the last year analysts are looking for earnings pippa stevens is here. pippa? >> hey, kelly. shares are up 50% in the past year, but the services companies have underperformed their upstream players with production now coming back online, they really do stand to benefit. for schlumberger specifically, this is a case of where size does matter. it's the largest player within the services group, so they can benefit from their geographic footprint as well as their robust product offering. so a few key things to watch here out of their report the first is the company has said that their immediate priority is deleveraging the

balance sheet so investors will be focused on a capital discipline and then free cash flow generation another really important metric to watch amid this higher commodity price environment. and then also because of its geographic footprint, investors will be looking for commentary around how north america versus international operations are stacking up. and, finally, another area to watch is their digital business, which they say is an avenue of growth into the future they're making acquisitions, they're making investments in tech companies, their size and scope can make a differentiated product relative to their peers. so a lot of things to watch here >> very interesting. i didn't realize they were doing so much on that front. steve, what would you do with a stock like schlumberger? >> so when you look at the one-year performance on schlumberger, it's up over 50% one month, kelly, it's up 34%. that seems like a lot of front loading based on inflation, based on where we're at on the

political front, based on where we're at with chairman powell raising rates. for me i would sell the stock. and i'll give you a little more expansion on that. think about this is there going to be -- first of all, you know this better than anyone energy did nothing for five years. >> right >> now we're starting to catch a bid, and everybody wants to jump on the energy bandwagon. but, remember, this administration, right, wrong, or indifferent, wants to push green energy there's not a whole lot of places for an slb in their portfolio. they, by happenstance, created a heck of a rally because the supply/demand equilibrium was upset. but i think that needs to back off a little bit crc, that's a company that's focused on carbon recapture carbon sequestration, he said. so, if that's one that checks the box of esg investing and it's not in the name people

don't realize that they have that angle that's based on helping improve the environment because people don't think of that when you think of the normal fossil fuel complex >> all right, california resources core, a final word on this one >> we heard from baker hughes this morning, and they did miss estimates, but they said that they are seeing an uptick from the higher oil price environment. as these earnings roll out, we'll get a better sense of the health of the overall energy picture after a stong year-to-date rally and, finally, csz where analysts are expecting slowing growth for the second straight quarter thanks to some supply chain and labor problems the shares are down 5% but a little higher today. and the expectation is for 41 cents a share of earnings frank holland has that story for us frank? >> hey there, kelly. it's really me this time maybe growth might be slowing when we're talking volume, but profits certainly aren't

slowing. analysts expect revenue to increase by 19%. last quarter, csx saw growth in container shipping that's where they get about 50% of their overall revenue when we look at the port of l.a. and long beach, we're seeing just around 100 ships waiting to unload or slowing down their trip to those ports because they know there's going to be congestion there we talk about pipeline a lot of times when we talk about pharmaceuticals or tech. rails are trading at an all-time high because they have one heck of a pipeline. goods are coming in from asia. they're moving them from either the west coast to the center of the country in chicago or they're coming off the east coast ports and going to stores here i don't think anybody you know is going to slow down their online shopping. but another thing on the other side is the labor cost and also the fuel cost. they saw their labor cost up 10% last quarter their fuel cost up 90% last quarter. so rails even though they're trading at all-time highs not really immune to inflation but the other flip side of that far inflation story is they have

increased pricing power. >> it's a tricky one as frank outlines it because you think, okay, it's more of a value industrial cyclical re-opening name but then it's also a sort of facing these unique headwinds. >> yes and that's just it so, as frank did some good reporting on that, profits are up, revenues are up, they've been able to reap the benefit of increasing their margins but the actual products that they're transporting has been on the decline for five years or thereabouts. how much longer can you bleed a bigger profit out of a shrinking pie? to me i would say sell this one. and when you think about this, you have to ask yourself a couple of questions. is the supply chain going to be easing or increasing over the next six to eight months and my guess is it's going to be easing if it's going to be easing, then they're not going to be able to warrant the rates that they're

charging right now so that means that operating income should come in along with traffic, which has been trending lower. so on all fronts to me, this is definitely a sell. >> very, very interesting. i feel like i learned a lot today. steve, thank you frank, thank you as well for that reporting up next, the past two months have been rough going for the ev stocks with tesla down 9%, rivian down by almost half but one analyst says the ev market is at a tipping pntoi we'll discuss. e to help you hite ground running. when you switch to t-mobile and bring your own device, we'll pay off your phone up to $800. you can keep your phone. keep your number. and get your employees connected on the largest and fastest 5g network. plus, we give you $200 in facebook ads on us! so you can reach more customers, create more opportunities, and make this the best year for your business yet. visit your local t-mobile store today.

welcome back 2021 was a big year for electric vehiclemakers with tesla hitting new records and luc and rivian both going public. lucid and rivian are now seeing the biggest declines but 2022 could bring big changes with major ev launches on deck, including from some of the

legacy automakers. we have bank of america auto analyst john murphy. let's start with the stocks you think have the biggest upside opportunity here >> thanks for having me. listen, i think the new entrants being lucid, rivian have the hig hig highest upside potential given that they started from basically nothing. gm and ford have huge opportunity that is underestimated as they transition their portfolios to evs. so i think as you're looking at this, you can take a lot higher risk in the new companies, potentially have a lot higher reward or play it a little bit safer in companies we think are underappreciated at gm and ford. >> they came to market with people almost giving them the benefit of the doubt on their success over the next five years. it feels to me like they are just going to have to earn their way into those valuations or maybe they're down enough that it looks a little more doable. >> i think when you look at both those companies, they clear

three hurdles. often ev companies auto tech is the new biotech. you have to look at these companies as probability of success. i think the first thing for those two companies is you have great founders rj at rivian and -- at lucid are very credible leaders and founders of those companies. second, i think they have both pretty good technology and third they have really great products that are just beginning to commercialize now, the commercialization point is where things are tripping up here in the near term, started production in the launch curve which is always very difficult for startup companies. i think the market's getting a little bit twitchy on the startup production but they'll get through that over time. >> let's talk about why you think this is a tipping-point year for the evs and who will be the losers from that are traditional automakers not

keeping up >> i think the companies that are lagging behind in investment are going to lose over time. but i think this year you almost have half of your product being launched that is ev specific so it's really a big year in 2022 and that'll continue in '23 and '24. and we do think, you know, the penetration rates that we're looking for right now, 4% in '22, 5% in '23, probably have some real material upside. it's going to depend on sort of capacity ramps and potentially what happens with government incentives the build back better plan which seems like it's kind of dead on arrival right now may have to be broken up and piecemealed. i think the incentives that the biden administration and everybody's put forth in that plan really would spur ev demand and close the $9,000 cost gap that we're looking at right now in an ev so it's really important that the u.s. government step inher and make the u.s. industry competitive with what's going on in europe and china. so we do think there's a lot of

focus from the companies but i think also the government really needs to step in here and really make sure the u.s. is competitive on the global stage. >> yeah, and i'll be watching the oil prices certainly the higher it goes, certainly the more people will ponder alternatives. >> elon's done something that nobody else has done he's really tipped the spear on the ev evolution and revolution. so, i think that company it will trade sideways over time but there is real potential for fundamental success there. we just think a lot of that is pricing to the stock at this point. >> trading around 1,031 bucks we'll call it today. thanks for your time we appreciate it john murphy with b of af we'll dig into one sector that pays more than double the s&p, and it's not energy that's next. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts

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welcome back utilities outperforming the s&p over the past three months, and everyone can't wait to hear about this, dom chu is going to dig into the sector and the names to check out if you're on the hunt for yield >> why wouldn't we want to talk a lot about the smallest sector in the s&p 500

it's only about a 2, 2.5% weighting overall. but it's known as thedefensive one and one that pays dividend yields that are above market, above average. let's take a look at what's driving some of the action utilities up 10% it's still up, but it makes it the worst-performing still u but it makes it the worst. approximating sector on a 12-month basis look at that picture, that's why many investors still invest in this sector. the difficult endyield is 3.5% versus the 2.9% or so yield that you can see there. there is the graphic 3.6% for the energy sector 2.9% for utilities, and 1.3% for the s&p 500. with that dividend yield, what are some of the best players in that dividend pay yield that

haven't seen a dee klein this their sock pl, 5.6% yield southern energy company, 3.of the% duke energy, 3.9%. and con ed 3.8%. all of those yields are there because of the fact that they pay a dividend and they have not been impacted by a falling stock price. look at those stocks in the utility sector it is the smallest sector out there but there are some virtues and especially how some of the stocks have done lately, many people are going that sounds pretty good. up next, 16%, that's how much higher home prices climbed in december from the previous year we will dig into the housing issue and with rates on the rise where prices are heading. we will show you a chart and tell you a story american and unite ready both lower despite the airline carriers reporting narrower than

expected losses in the quarter we will have their numbers, and a forecast we are actually seeing now net bookings back in the 80% level where they were prior to omicron. so people are, i believe, certainly have got tony the point where they believe this is going to be behind us before too long and they are having confidence in their travel plans certainly in the future. >> we certainly bottomed from the omicron impact and they are getting stronger particularly as you goat february, march, and beyond. and our forecast is that we will be profitable in the second quarter. ♪♪ care. it has the power to change the way we see things. ♪♪ it inspires us to go further.

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welcome back existing home sales dropping in december, but prices skyrocketing from the year before diana olick is here. >> last year was incredibly strong for home sales but

december disappointed. december sales of previously owned homes drops nearly 5% from november and were down 7% year over year. these sales were based on contracts signed in october and november, that's when mortgage rates popped up from their summer lows. they were still about 60 basis points lower than they are today. it probably wasn't the rates, more the supply or lack thereof. it was a new record low. less than 1 million homes for sale at the end of december. a 1.8 month supply, six months is considered a healthy balanced market it caused price gains to reaccelerate, up 16% year over year and for the full year another record high price was set, $346,900. what do we make of all of this higher mortgage rates are going hit affordability hard and should cool sales and price this is year. the outliar is the crazy low supply it is not going let prices cool that much and is going to push

single family rental demand and prices which is already super hot even higher. >> thank you, die onna olick for more on this low housing supply and record prices let's bring in the director of market research at black knight welcome. does your data corroborate this? where are we going from here >> we are seeing the same thing when we look into our real time stock ticker of what's going on in the housing market. we are seeing things reaccelerate late last year as well for all the reasons diana just mentioned affordability was relatively strong at the time that changed a little bit moving into 2021. but it is bumping into the record low levels of supply out there. the supply issue has worsened toward the tail end of 2021. >> is there anything that can be done to help on the supply front? >> all the things are pointing this the wrong direction at the moment we look at what's going on with new build activity, and the display challenges there

really the rod broader issue you are seeing is the traditional home sellers, the ones that feed the housing market we are going on two plus years of a deficit of listings out there in the housing market of the it has gotten a little bit better but we are till running double digit definite fits from where we should be this time of the year. >> that suggests prices will keep going up even as rates go higher what does history say about how that pattern usually plays out >> if you look at affordability we have seen tightening in the last few weeks of 2022 30-year rates are up almost half a percent this year. the average buyer, it is costing them $330 per month more than it was at this time last year we are in a 2008ish time frame we are definitely in a portion of the affordability curb where we should be seeing home price growth slow down we likely will see that here in

coming months. but it is held higher than otherwise it would have been because of the supply shortages. >> if it pushes people into the rental market they are going to face high rents, it eats into their budget to be able to save to buy a house on the reits, you al-- refis, we you tracking >> still a strong population over the last three weeks, given that almost half a percent in rates we saw that cut to must over 6 million certainly head winds strong from a historical per perspective, but nowhere near the follows we saw in 2020 and 2021. >> if you had to make a guess, how much higher would home prices go from here? >> it is going to be a tough story as interest rates and affordability moves. i think the story line that's

going to drive home price growth this year is going to be the inventory. did we see meaningful rebound? or is this deficit here for the foreseeable future >> count the for sale signs in the neighborhood that's your indicator. andy walden, of black knight, thank you. that does it for "the exchange," everybody stay right there tyler mathisen picks things up right now. ♪ >> kelly, we will see new just a couple of minutes. welcome, everybody, meantime to "power lunch." i'm tyler mathisen here's what's ahead on a very busy thursday, and snowy thursday afternoon in the new york area. peloton shares tellable. they have turned that red knob hard to the right. resistance high, tough shleddin for that company it is falling on a cnbc report that the company is stopping production on its bikes and tread mills. >> and half off sale,