market expectation is as well. encore works with underwater borrowers of credit card debt to get out from under it and earn an profit. this is the way i want to play it. >> appreciate it i will see you in a hours in overtime "the exchange" begins now. >> welcome to "the exchange. i'm jon fortt. here's what's ahead. the bears largely controlling the narrative once again, but will they stay in charge morgan stanley says they have one last act to play a look at how long that act could be and where you should turn for opportunities. as more cracks continue to show in the housing market, one real estate investor says there's an area of the market that will hold up better than others that investor joins us ahead. speaking of housing, we're going to get the latest read on the builders toll brothers reporting after the bell, plus two more retail names on deck. we will get you set up for all of it in earnings exchange, but

we begin with today's markets and bob at the new york stock exchange. >> the markets are fearful of a hawkish speech from jay powell on friday, but right now, we're holding up on the flat line with the s&p 500. as you can see down 1. the dow is down more because of some weakness in united health, down about 9 points, that's about 70 points alone in the dow jones industrials. the big movers today, it's not good news for the inflation front because energy stocks are rallying big time here a lot of this is on the big move up in natural gas we've been seeing in the last few days, but halliburton, occidental and schlumberger on the upside the commodity plays have having a good day freeport, mosaic, cf industries, these are fertilizers, mosaic and cf primarily, all moving nicely big tech, call it either side a positive or negative apple flatish.

alphabet nvidia up nicely micron on the flat side. what's been weak is the defensive sector big pharma not having a good day. neither is united health the health care sector a little bit on the downside today. remember, these are defensive plays. what's going on here remember, everyone is afraid that jay powell is going to sound more hawkish, but the bottom line, one of the reasons the market is holding up is the data is supportive of the economic slowdown that all the bulls want and that they want to hear jay powell talk about look what happened today new home sales, lowest since january of 2016. pmi services, lowest since 2020. pmi manufacturing, lowest since august of 2020 jon, all of this is good news if you are a bull an want to see data supporting some kind of slowdown because, remember, that will help support the position of jay powell and that is, that they're winning slowly, to fight against inflation and, of course, they want that economy to slow down a bit

jon, back to you. >> yeah. are they winning it quickly enough that's the question, bob pisani. thank you. sticking with today's bearish tone, morgan stanley making a bold call for the rest of the year saying now is the time for patience and building dry powder this bear market in our view has one last act, they say are they right if so, where should investors look for opportunities joining me kevin ma the president and cio at honey and walsh asset management why one last act >> i think it's clear right now that market is very uncertain about what the federal reserve is going to do over their last three meetings of 2022 if, in fact, they turn less hawkish, not dovish, but less hawkish than many believe, i think that provides a tailwind for the stock market if they raise by 75 basis points in september, and perhaps even 50 basis points in november or

december, i think that could cause the market to retrench again. regardless, we are in a decelerating economy right now investors would be wise to position themselves for slowing economic growth. >> okay. so is jackson hole mostly about figuring out, are the winds blowing more towards 75 or 50 test at this point is it too soon to tell whether it's 25s after what's next what should we expect the market to react to? >> it's certainly too soon to predict what's going to happen in november and december they don't meet in october and we have midterm elections in november there's going to be headlines that could potentially move markets. what i anticipate hearing from powell on friday, is a more hawkish tone which is going to lead the markets to believe they're going to raise by 75 basis points in september. my fear is that they remain as aggressive as they are in the face of a slowing economy that's had two consecutive quarters of

negative real gdp growth given all those unknowns, i think some defensive positioning and some opportunistic growth positioning is warranted where do you look for that i think the health care sector provides both. >> okay. why health care? there's a bunch of different areas within that, whether you're talking about what amazon is moving into or biotech? >> i'm talking about both. for the opportunistic growth what we've seen since may is a pick up in m&a activity. the larger cap pharmaceutical companies with excess cash on their balance sheet deploying that and buying some of the innovative health care solutions of these smaller cap bio companies, such as the acquisition by amgen or pfizer of global therapeutics announced this month but if you want the more traditional defensive health care plays, look at some of the larger cap names such as bristol-myers squibb, merck and company or even as mentioned in

the earlier segment united health group we know united health group isis bidding on signify health with amazon they're trying to gain market share. the theme today could create an attractive entry point. >> will this m&a creature beau lens with the stocks themselves? if there's m&a, even if it's positive in the medium or longer term, is it going to cause stocks to go down because they have to make the outlay to buy whatever they're buying? >> absolutely. and think about it this way, large cap pharmaceutical companies continue to have their margins compressed, downward pressure put on drug prices and many of their large-scale revenue drugs going off patent subject to generic pricing we think they will have to be inquisitive to the betterment of the pharmaceutical companies who already have drugs in the fda approval pipeline.

yes, it's a risky place to put money and that's why you build a diversified portfolio of smaller cap, biotech stops that have the potential to be acquired, but that's for people looking for growth, to be more defensive they say in the traditional pharmaceutical plays. >> all right kevin mahn, thank you. from health to bonds, let's see if they're healthy, two year notes, rick santelli tracking the action. >> not a pretty auction. the grade i gave the 2-year, d d-minus. $44 billion to kick off 126 billion in supplies. the yield at the dutch auction 3.0% 3.29%. higher yield, lower price. if you're the seller like the u.s. government lower price is

never good and most of the grade here was because of price so messy. if you look at the internals 2.49 bid to cover the lightest bid to cover since march of this year the other thing that jumped out, 17.3 on direct bidders that's the lightest since june yes, the numbers aren't so far away from the 10 auction average but all metrics are away from 10 auction average. tomorrow's five year may go better jackson hole looming large good luck to try to move the supply with any type of rigor whatsoever back to you. >> d-minus you call that a charlie brown auction. that's not a good grade. rick, thank you. the chips sector in focus. nvidia reports earnings after the bell tomorrow. the stock has been under pressure with a recent cut to its outlook. this as rival intel lithits a five-year low as it prepares to

open new fabs and does interesting moves with financing today. the semiconductor etf smh down 6% in the past week. let's talk about it all with the senior semiconductors analyst at bank of america securities vivek, start off with nvidia, relative to intel, has been doing pretty well over the last few quarters, years anyway what do you expect from nvidia and is now a time to buy into it >> thank you, jon. i think the big picture with nvidia has not really changed. three points, very large markets. i think the adoption of ai is still 20% off its curve. the number of ai divided servers, the ratio still less than 20% nvidia dominates the market. secondly, it's front of big new cycles on the technology and the new accelerators, cpus, new

dpus number three, there is tremendous leverage in the market because every new product that they come out with is based on the same underlying architecture, the same technology can be leveraged to not just ai but meta verse, robertics, and so many verticals. it is in front of what has tended to be once every three to four-year cyclical correct shun in its gaming segment and not surprising two out of the three large markets for gaming, china was under a lot of lockdowns and we saw all the turmoil in europe those are two of three gaming markets. gaming cards by the crypto miners, as they move to a different protocol, i think that's also reducing the demand for gaming i think in front of a tough quarter, tough guidance it will be below consensus as we have seen over the last decade those are the opportunities that turn out to be attractive times to revisit the big picture story, which in

our mind is still extremely attractive. >> let's talk intel which you don't like interesting announcement this morning, i spoke with intel's cfo, coinvestment with brookfield to fund their fab buildouts. this is going to cause less strain on their cash flow. appears to potentially at least have some upside for their model. does this make you feel better about the company or no? >> yeah. so first, i think we have to acknowledge and applaud the fact that intel is, you know, very keen to invest more in the u.s i think they absolutely need a lot more semiconductor investments domestically in the u.s. i think it's a big risk to be very dependent on taiwan and the east i think we also applaud intel for finding creative ways to pay for that having said that, intel faces three structural issues. the first structural issue is the technology is behind number two, intel continues to lose market share to amd in the

server side and that dynamic is not going to change for the next two or three years number three, a big part of how the company is exposed to the pc market, let's say the pc market is past its glory day the three structural issues are in any way addressed by all kinds of funding. i think in my mind they're actually more of a distraction because they are, you know, hindering the progress towards what should be a sustainable path to recovery for intel i don't think it really changes the fundamental equation. >> when do we find out as investors whether pat gelsinger's strategy is night e right? even if it takes two to three years to pan out, is that when we find out? do we find out sooner? if we know sooner than the results come in, we would expect the stocks to react sooner >> yeah. look, if the problems didn't just start in the last two

years, i think they have been there the last five or ten years before this management team took charge but even despite all the problems, intel still has 80% market share in pcs. i think that is unsustainable when you have a competitor such as amd who is very aggressive, nimble, operating at the top of the game and on the other side you have nvidia, right, and broadcom and marvel leading the markets into many new directions and i think for intel to simultaneously compete with the best of the designers, which are the amd and nvidia, qualcomm, at the same time, i think it's an unsustainably tough problem. i think it's going to take a while for this to turn around >> okay. sounds like your answer is you don't think it's possible. but we'll see. we'll see when we get that call one way or another as well

vivek, thank you coming up, egregious differences, that's how twitter's former security chief describes the company's defense against hackers and now he's filing a whistleblower complaint with regulators. this is sending the stock lower, fueling the fire in elon musk's lawsuit against the company trying not to buy it those details are next plus two key corners of consumer spending. housing and retail we will get you ready for toll brothers, urban outfitters and nordstrom results on earnings exchange we're back in two. this is "the exchange" on cnbc.

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welcome back to "the exchange." today, marks 15 years since the first hash tag was used on twitter and in that time twitter has faced plenty of scrutiny from lawmakers and regulators over privacy and cyber security policies and now the company is under fire from its former head of security who alleges reckless and negligent gent behavior from twitter's leadership eamon javers is following the story. julia boorstin has twitter's response and chris pearson is ceo of cyber security firm black cloak. he is looking at the fallout for twitter and other tech firms in light of this complaint. eamon, start with you. >> well, what we know is the

wimbledon in question is twitter's former head of security peiter zatko. he's a hacker who is known by the nickname mudge the contents of his written whistleblower complaint filed with federal agencies were confirmed to cnbc by zatko's legal team this morning. he says twitter misled the government about security and spam, violated an ftc settlement, running out of date software and withheld key facts about data breaches the company faced. too many employees, maybe thousands, had access not tracked well to the company's core software. that raises the prospect of disgruntled or malicious employees using the access for their own benefit or even if they're on a foreign government's payroll the complaint also says the company prioritized user growth over reducing spam and executives stood to make bonuses for themselves of as much as $10 million tied to increases in daily users, but not to decreases in spam. mudge was hired to twitter by jack dorsey but fired in january

of this year a spokesperson for the senate intelligence committee tells cnbc that the committee has also received a copy of mudge's complaint and setting up a meeting with him as we speak the spokesperson says we take this matter seriously. in a separate interview with cnn, zatko's legal team said he hasn't had any contact with elon musk who is, as we know, in a heated battle with twitter over the takeover effort. back over to you. >> eamon, thank you. turn to julia boorstin, with the company's response julia? >> well, jon, the whistleblower accusations could have implications for twitter and elon musk's refusal to buy the company. musk's attorney alex spiro saying, quote, we have already issued a subpoena for mr. zatko and we found his exit and that of other key employees curious in light of what we've been finding. but twitter responding and discrediting the allegations,

saying, quote, mr. zatko was fired from his senior executive role at twitter in january 2022 for ineffective leadership and poor performance going on to say, what we've seen so far is a false narrative about twitter and our privacy and data security practices ritled with inconsistencies and inaccuracies truest analyst telling us, quote, if we thought initially that mr. musk had very little chance of winning in court, these revelations improve his odds somewhat, but saying, quote, our view of the situation remains unchanged and our rating on twitter remains at hold this all comes on the heels of elon musk's legal team subpoenaing twitter co-founder jack dorsey. he did support musk's bid and now musk is hoping he will provide details about those all-important spam accounts. all of this comes ahead of a twitter vote on the deal that's in mid-september followed by the trial that is set for a month later. guys >> all right thank you. let's dig now into the

fallout. my next guest says twitter could be looking at some significant security issues if the whistleblower's complaints are true joining me now is chris pearson, ceo of black cloak and a former department of homeland security privacy security member. chris, i remember mudge from long ago when he was testifying about hacking, back when the internet was young i mean, the web was young. the internet was middle-aged by then he's a credible person in general, so does that mean trouble for twitter here >> i think there are a few things here. i mean, obviously these are serious allegations, if they're true if they're true they might be a much larger risk as you take a look at the twitter ecosystem, the types of users they have on the ecosystem in terms of politicians, governments, heads of state not just the you and me, but people that are broader making policy and announcing policy

there. this does need to be taken with a grain of salt. something that needs to be investigated in terms of the allegations. but, you know, it's something where we need to hear twitter's story. i think the biggest things i've heard that are going to be concerning is going to be user access access to user data that might be kind of running rampant more at twitter and not having sufficient controls over who as an employee can access what type of data. there are other things alleged and in some of that whistleblower report information that's more around updating and patching these are -- a lot of these are normal things that every cheap security, chief security officer deals with on a week to week basis. >> i'm not a lawyer or security professional, but i've spent time talking to experts over the years. seems like a key issue here is twitter is trying to say hey, look, we have the agreement with elon musk. nothing out of the ordinary, out of ordinary corporate practice has happened that would invalidate that agreement.

but the key part of what mudge is saying here is that there are certain security practices that twitter had in place that were bad or a lack of security processes and practices beyond the pail isn't that the key issue here? is it possible that -- >> could be. >> security -- we take for granted or talk about in jgenera could cost billions of dollars here >> like we saw with at had transaction way back when, when it was acknowledged there was a public data breach that had not been reported, yet it impacted the purchase price cyber security and privacy practices are always going to be part of any mergers and acquisition, any type of price of deal you have, it will most certainly be part of this price deal what you have is a few things. number one, you may have security allegations or allegations around poor security that are material, that are meaningful and impactful second, you have that 2011 consent decree that twitter signed with the federal trade

commission it was fined on for one violation already. if the security is really as poor or has as many holes as being alleged it could potentially cause another investigation or another fine to be levied against twitter for that affecting the price and then the key issue, how many bots, how many spam accounts, fake accounts are there as a part of twitter because that is what you're buying you're buying the user base. if that is a problem that is out of control, if it has run amuck, it could impact the actual deal, the deal price, and whether this thing gets done. >> if you're a board of directors, right, this is another reminder that if you're going to go through any transaction, somebody is trying to acquire you, you're trying to acquire somebody, the security practices involved, right, they could make or break that deal? >> it is absolutely. at the end of the day, every single company has privacy and cyber security issues, but privacy and cyber security becomes an issue for your

company in terms of its brand, reputation, who it is and can either inflate that price or deflate that price or potentially cause a deal to go awry and not be done it is something that all corporate executives own it's something that board owns it looks like, quite honestly, it's going to be a key point in the upcoming litigation that happens. >> chris pearson, ceo of black cloak, thank you and now, still ahead, builder sentiment falling for eight straight months and now we've got the latest read on rent prices and new home sales will they tell a different story? there's a currency conundrum in the market as the euro lites a two decade -- hits a two decade low fence the dlaolr. "the exchange" is back after this. but, at upwork, we found him. he's in adelaide between his daily lunch delivery and an 8:15 call with san francisco. and you can find him, and millions of other talented pros, right now on upwork.com

welcome back to "the exchange." it is a mixed bag for the markets right now. the nasdaq is out performing, holding on to some slight gains. the lightest shade of green. s&p is about flat. the dow is off its lows of about 200 points here's some of the movers this hour palo alto networks climbing up almost 12% after beating earnings estimates and giving strong quarterly and full-year guidance the company's board also approved a 3 for 1 stock split, effective next month macy's, also higher by about 4.5% after reporting a strong quarter, but the retailer is cutting its full-year guidance as it expects shoppers to pull back on spend dug to inflation still up more than 4%. natural gas futures seeing volatility after hitting $10 for the first time since july of

2008 price is sinking as freeport plans to open its lng plant in november prices are up nearly 20% in august overall now to tyler mathisen with a cnbc news snooupts thank you very much. -- update. >> thank you very much up to the minute new this hour, a federal jury in michigan has convicted two men of plotting to kidnap michigan governor gretchen whitmer. barry croft junior and adam fox plotted to kidnap whitmer in 2020 and planning to obtain a bomb to distract police as part of their plan. in a statement, whitmer said today's verdicts prove violence and threats have no place in our politics and those who seek to divide us will be held accountable. democrats in florida will choose who they want to take on governor ron desantis in november vying to take on desantis is state agricultural commissioner nicky freed who is running

against congressman and former republican governor charlie christ a new report found a third of veterans say they've been arrested at least once, compared with fewer than one-fifth of all nonveterans. the council on criminal justice wants to determine why and their preliminary report points to multiple risk factors including combat related trauma and post-traumatic stress. tonight on the news more on primary day in florida and some key races in new york state and city, the latest election results on the news. back to you. >> thank you and coming up, you know it works for some baseball field, if you build it they will come does that phrase still work for home builders? we will get you ready for toll brothers report after the bell along with a pair of retailers, what shoppers are spending on

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it is time for earnings exchange where we give you the action, the story and the trade on three

names set to report results. first up, toll brothers. that stock has struggled this year as the housing market continues to cool. diana olick joins me and jeff mills, cio of writtenmar trust, has the trades today. >> diana >> while the stock may not have been doing so well, toll was fairing better in earnings than its peers because it's at the luxury price point and buyers weren't as dependent on mortgage rates an the rate moves we've seen that may be about to change because we've seen in the home sales categories at top price tiers are actually falling just as the lower price tiers were. we got new home sales out report this morning showing a steep drop in july especially we'll be looking at toll brothers for their inventory numbers. inventories up near an 11 month supply, four to six month supply is healthy we're looking at prices for toll brothers the high price point, over $800,000 will it fall a little bit?

we did see some price movement a little bit, but overall home builders up only 8% year over year in july where prices had been up over 20% in provide months year over year. we're going to be watching cancellation rates on toll brothers because that is the big picture for the builders we've seen cancellation rates overall double just since may and that, of course, is keeping the builders worried that again, they're going to have too much supply in their backlogs, jon. >> thanks. jeff, higher cancellation rates, higher interest rates, higher inventories, anything you like here? >> yeah. jon, all completely relevant things to point out. i'm not bullish on housing or the economy for that matter, and we mentioned it, existing home sales down, new home sales another miss, mortgage applications down. but i do think there is a but here and doesn't mean that toll is going to go up when the market goes down, but i think you have sort of a long-term

value play here. first of all, the stock has never been cheaper at four times forward earnings i think the cost of materials probably peaked, long-term interest rates probably peaked this might surprise some people but stocks like toll, home depot, they have historically out performed during recessions and that includes 2008 usually you see a lot of under performance leading into the recession so people saying boy, look at all this bad news, we're heading into a recession, maybe we've seen most of the under performance already. i think that's something worth considering. lastly, i think the chart is somewhat supportive. you have the $41 level that's been key support. it held in june. an interesting stock here. certainly long term, plenty of structural support for the housing market. >> let's see what you think ability nordstrom. that stock is up 18% since its last earnings report in may when it raised its revenue growth target and the lower end of eps guidance courtney reagan has the story. >> hi, jon

nordstrom is going to be an interesting one because it sits in the department store space which has been under pressure. we heard from macy's which was better than feared c kohl's wasn't great. that has been a shopper that's been more insulated. we also know it had a big anniversary sale during the quarter that is likely going to give it a nice bump. of course when looking at the financial details of that you have to be careful with the timing for the year over year comparison, but it should have driven some traffic and interest into nordstrom and that's something some of the analysts are pointing to as a positive there, along with that higher income consumer still holding up when the company has done what they can to make sure they're not over stored or over square footage, if that's a word, looking at some of the smaller format locations, even those service centers and, so i expect them to talk a lot about how all of that is continuing to work together, but really, i think at

the end of the day, it's just it is a consumer facing pressure from all directions still interested in paying for very discretionary goods, which is exactly where nordstrom plays. >> thanks. jeff, okay, it's efficient, it's luxury, but macy's cut guidance is that priced into nordstrom? will it do well? >> yeah. macy's did cut guidance but interesting the way it's trading, right up about 4%. it was up 6% earlier a lot of investors are going to be focusing on the efficiency, the inventory, the margins i think that's going to be the real consideration here. my comments relative to nordstrom sound similar to toll, in that i have concerns about the consumer delinquency rates are going up, in the subprimary, less relevant for nordstrom, banks tightening lending standards, things of that nature. there's a but here as well, and this is a retail stock you can own. it's not going to go up when

retail is getting hammered, but i think this is interesting. the turnaround story is real, what they're doing with supply chain productivity, digital, those more convenient local store locations we talked about, some really interesting partnerships, just to make merchandising relevant 3% dividend so a little bit of a margin of safety there nice buyback announced they've out performed this year, but if you look at the evaluation, historically cheap still. an interesting stock, sort of a challenging industry but something you can take a look at. >> all right well, we got to go back to courtry in on urban outfitters, d down 23% the company are reports 31% build in inventory in its last quarter and an issue that many retailers have been dealing with over the past several weeks and months is urban outfitters positioned as well as nordstrom it's not luxury exactly, but

it's maybe hipper than kohl's? >> perhaps it has three brands. it has the namesake, urban outfitters which does trend younger. anthropology and free people, a little older when talking age of shopper. that is going to help because the urban outfitters banner is not expected to perform well when looking at sales year over year this time around. inventories were a big issue at the end of the first quarter which weren't as much of an issue with other retailers in the first quarter but here in the second quarter i think a lot of the question is what happened to it? were they able to sell and if they were, at what level did they have to really discount the goods to sell them that's a question as well as the cost to run the business it is a question for everyone, but you are bat outfitters particularly had trouble with freight and fuel costs in the last quarter we're going to want to know if that has been better managed as some of those prices -- the

pricing pressures that companies are facing to run the businesses have lessened. >> all right jeff, do you like the urban outfitters as much as the sub-urban outfitters at nordstrom? >> i don't think i do. i don't think i like it as much. even with the recent rally, in retail it's sort of been worse the first over the past couple months. a lot of stuff has rallied with urban you have some margin of safety relative to the valuation if you compare it to gap and urban has done a decent job in transitioning to digital over 50% of their sales are digital now. courtney mentioned that product diversification. it's not just close, anthropology free peoples, but they've struggled. it's going to be about inventory management, about cost management and they've strug tllds. that's been the primary driver of retail and driving some of the trading today. if you look at macy's, dick's

the way the stocks are trading relative to one another. urban usually trades on top of nordstrom's, but it's at a 2 p premium. this is one you can set aside for now. >> whether housing or clothes, inventory is the issue thank you. now coming up, the dollar continuing to gain strength hitting a two decade high against the euro earlier today that is putting pressure on companies that do business overseas, including this one, that's down 15% today. the name is next. bubbles bubbles so many bubbles! as an expedia member you earn points on your travels, and that's on top of your airline miles.

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welcome back to "the exchange." it's back to school time, right, so let's have some show and tell where we show you a chart and tell you the story shares of zoom on pace for their worst day in a year after cutting full-year guidance for profit and sales cfo kelly stuckleberg telling ""squawk box" zoom is seeing a shift in revenue sources but not

helping offset international headwinds. and that online business -- >> we're excited about the progress we're seeing in the enterprise segment of our business which grew 27% year over year. we did talk about impact from fx and macro economic environment it's mainly focused on our online segment of the business this is part of our business that grew dramatically over the last two and a half years and it's now dropped down to under 50% of our revenue, but it is really being challenged. what's going on in europe. >> that business you heard her talking about helped push shares to an all-time high of nearly $600 a share in late 2020, but the stock is down 85% since then and on track for its fifth straight quarter of declines still ahead, my next guest says there's a freeze coming to the housing market, but there's one area that he calls close to recession proof. that's next.

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welcome back there are more signs of cracks showing in the housing market with new home sales down sharply in july as the 30-year fixed

rises again and at the same time seeing prices starting to ease in some areas of the rental market diana olick has reporting on all of this and back with me now with the latest. diana? >> after a tremendous run in 2021, rent growth for apartments looks to have peaked nationally rents rose 0.8% between june and july of this year one third the growth seen at the same time year ago all according to real page apartment reits had been the darlings of the pandemic because while some fled the big city markets, an influx in the sun belt pushed rents. reits are a low interest rate play because they offer higher dividends. represents are easing and interest rates righting and some of the apartment reits are better i spoke with an analyst with piper sandler who is bullish on sun belt names like camden and mid-america, rents there didn't push as high last year but demand is still solid. he is less so on the big coastal market reits like equity

residential, avalon bay and udr. rents skyrocketed on the coast and are unsustainable. while rent growth may be easing it is unlikely to drop because the home sales market is weakening so quickly due to rising mortgage rates. we've seen the average on 30-year fix pop up again in the just the past few days, now edging towards 6% again according tomor gantgage news daily. new home sales for july were out this morning with a massive dropdown, nearly 13% and nearly 30% year-over-year as the supply of newly built homes for sale is soaring. now my next guest has his hands in various segments of the real estate market including construction and property management he says a freeze is ahead for housing. he also says there's one area that's going to hold up better than others. that's the multifamily market. for more let's bring in patrick carroll, founder and ceo of carroll, a real estate investment firm with more than

$8 billion in assets patrick, why multifamily because i wonder have investors gotten so involved in multifamily that they could pull back and affect the market >> yeah, i mean, look, multifamily is an amazing resilient asset class. i mean, when the economy's expanding, you know, people move out of their parents' home, people relocate, and they rent apartments when the economy's slowing down and we're going into a recession, you know, people pull back the, you know, the amount of money they're spending. so they look for cha cheaper alternative. so historically it's been a great asset class. there's definitely a freeze going on in the market right now. i mean, this was a market that had record transactions, the multifamily market for the past few years, and right now it's all about frozen, and it's really -- there's. >> well -- >> yes, go ahead >> i understand the rent or demand for multifamily, but what about the amount that investors

are going to be willing to pay to own that multifamily unit, right? i mean, as interest rates rise, as perhaps the available capital shrinks a bit, is that going to affect the market? >> absolutely. i mean, we're seeing price declines in asset sales. i mean, 10 to 15% a minimum. we closed two properties last week, and there was at least a 10 to 15% discount applied, and so yeah, right now it's very hard for investors and lenders to project where interest rates are going and where cap rates are going, and cap rates drive the value, so if you can't estimate the cap rate, it's very hard to estimate the value you should be paying. >> so as an investor, what do you do in this environment then? i guess it's helpful to you if you got a bunch of dry powder cash to buy properties, though multifamily can be pretty expens expensive. do you put that to work in certain segments when you see prices come down

>> we do we disclosed on our last fun, it's a multifamily investment fund we're actively deploying capital. we look at any pullback in pricing as a good thing. we're long-term investors for the most part, and we're long-term believers in the sun belt we've been buying properties in the sun belt since 2011. we saw this trend coming we're still, you know, extremely bullish on these markets, and believe they've got a long way to run so yeah, any pullback in pricing for an established company, we still can get debt a lot of the newer players can't. we do this as an opportunity to grow >> so if we do end up going into a recession of some significance and there's a loosening in the labor market, if people start getting laid off, i imagine that affects the housing market eventually as well, right? because if people can'tafford to pay as much rent if there are more vacancies, rents are going to have to come down that's several months off at least.

>> i hope so i mean, look, it seems like everything's softening you know, to think there will be some type of softening in rents is pretty -- is a pretty safe bet. i don't think you'll see a massive correction just because of supply and demand you have more people moving to the sun belt than we do have, you know, affordable housing available. so it's really kept occupancies, you know, at record highs. it's kept rents going up, and you know, going into a recession, you may see a little mitigation of that, but i still think you'll see rent growth for the next three to five years in the market >> okay. three to five years, we will see. patrick carroll, thank you. >> thank you and still ahead, gold etfs seeing consistent outflows as the commodity remains under pressure has gold lost its shine as a hedge? we will talk about that and the impact on gold related stocks next how are we different? we exist only on your phone. so you get unlimited data for just $30/mo, taxes and fees included.

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gold is trying to stnap a six-da losing streak trading slightly higher at 1760 right now, this as the dollar continues to get stronger and that's having an impact on a number of companies including zoom, which called it a headwind in its latest earnings for more on the commodity and currency fallout, let's bring in seema mody seema. >> john, the price of gold jumped at the onset of russia's invasion in ukraine, in early spring to $2,000, but as higher rates started to dominate, the narrative, prices fell and then spiking slightly in early august on the prospect of tensions between tie ban and china following house speaker nancy pelosi's visit the real catalyst behind the fall in gold is the rebound in the u.s. dollar and rising yields all leading to about ten consecutive weeks of etf outflows a big number there, and considerable losses for gold miners, bernstein analyst bob baracker says the debate around

these will focus on the price of gold and where it heads from here and he raised concerns around newmont mining he's downgrading newmont mining and barrick gold fed speakers will embrace a more dovish tone and that could support prices from here on out. they say the support level is 1724 to 1745 you can see gold trading at 1760 john. >> okay, so when there is demand, where's it coming from who's buying gold? >> as we've seen over the past couple of years, it's the emerging market countries like china, rrussia, india, even turkey those are the countries that remain big buyers of gold. you've got to wonder if this dollar continues to strengthen, what type of pressure that puts on those countries that continue to buy the yellow metal, john. >> weren't they supposed to be buying bitcoin

i thought they would be buying -- no >> i think there's always been this level of interest from a lot of these countries to find other places to put -- to allocate their capital, whether it's gold or another type of alternative currency, there is that type of appetite and interest for sure. >> all right, seema mody, thank you. and that will do it for "the exchange." "power lunch" starts right now >> thank you very much, john, and welcome, everybody, to "power lunch," along with courtney reagan, i'm tyler mathisen, here's what's ahead this hour, stocks mixed right now following yesterday's big selloff. top tech watcher will tell us if this selloff is warranted after the two-month rally we have had. plus, is american reliance on chinese manufacturing ebbing, becoming a thing of the past apple for one stepping up production of its newest iphone in india, what this shift could mean for the u.s. and chines