med tech business, great balance sheet. >> thank you for that. great new year to you. j.b. josh brown >> yeah, so, chubb -- why you laughing >> come on, we have ten seconds. >> you're just a funny guy and tomorrow is january 4th. >> thank you, everybody! get your calendar straight >> i'll see you in o.t., the exchange is now. thank you, scott hi, everybody. i'm kelly evans. here's what's ahead on "the exchange last year was miserable for stocks, and so far, this year is, too. it won't get better right away, but he is finding opportunity in the wreckage and one of his picks is pretty contrarian we'll have the name, ahead plus, one oil bull remaining steadfast. in fact, the set-up for commodities could be the best since the start of the supercycle in 2020 goldman cease jeff curry is here with more on that. another blow for tesla the stock now down more than 70%

over the past year, so when will wall street finally throw in the towel? we'll talk to one analyst who still rates tesla a strong buy first, the markets bob pisani watching the action at the new york stock exchange ugly look here, bob? >> what happened to our rally? we were strong in europe, strong in asia, opened strong here, for ten minutes. and they sold right into it, particularly technology stocks some unusual things happening. take a look at the major indices. it looks a lot like last week. what do i mean the dow is a relative outperformer because of consumer staples and other names that are value-oriented s&p is kind of in the middle, and nasdaq is bearing the brunt of the losses. by the way, 10,326, we're approaching a 52-week low. we were there last week, remember that's what i mean it looks a lot like last week. normally in a big down year, the first thing you do in the new year is you buy some of th biggest losers to a certain extent, this is happening. so intel and salesforce were big losers in the dow. a lot of tech stocks were. they are modest gainers.

walt disney had a terrible year generally, and nike wasn't a great year either. and they're also upside leaders. so far, so good. the other thing, of course, is that you start selling some of the big gainers of last year the biggest gainer, of course, were energy stocks chevron is down, okay. health care and consumer staples, like coca-cola and procter & gamble were relative outperformers last year, so you would sell them. see, it's working? buy -- sell the losers, buy the winners. that's what you do opposite sides and so take a look where it breaks down. this is where people are getting a little disconcerted. the two biggest names, we talk about, tesla and apple, down dramatically tesla, as you heard there from kelly, production issues apple had to downgrade it was also reports yesterday out of nikkei about a lower demand for certain components. so the semiconductors are weak today. they were also big losers if the theory is, you know, the stocks that are down the biggest should be up, this is not working for

the semiconductors today so you've got a little bit of disconkconcer disconcertation out there. remember, january 23rd last year, 2022, that was the all-time high. it was 4796. look at that, kelly -- we are -- >> wow >> exactly, a thousand points exactly, and that's -- do the math there, 21% lower than we were a year ago. >> bob, here's what's so troubling. so we know these things set the tone, right? we had all of these forces that should have given us a bounce here they've gone the fact that tesla has been moved through the afternoon and is now down almost 15% is one thing. people can go, yeah, well, it's a tesla story. apple is down 4% did you just show it at 123? >> yeah. >> riddle me that. it's the most widely owned stock in the market. it doesn't have any of the same operating or valuation problems that tesla does, and that to me is a much bigger tell. >> i think the nikkei report on

weaker demand. none of this has been confirmed by apple at all, this was out yesterday, this story. i think that's weighing on it. that would account for why the semiconductors would be weaker the potential for growing demand but at this point, this is all speculation right now. we don't have any confirmation >> we used to say that housing is the economy that's probably still true, but it feels like the iphone is the economy. whatever happens with that, everything rises and falls we'll check in with you soon, appreciate it. bob pisani at the stock exchange the nasdaq is the biggest loser again today as we kick off the new year, no surprise. my next guest is finding some opportunities from the collapse in tech stocks one stock in particular he likes here is amazon, coming off its worst year since 2000, and still bucking the broader sell-off today. he also says he'll get more bullish on stocks when the fed stocks hiking. let's welcome in chris chrisante. happy new year, chris. welcome. >> reporter: hey, kelly, nice to be with you again. happy new year >> i want to drill down into this trading action, cwhich i

apologize for doing so, because i know you're a big picture thinker, but this is ugly. what do you make of it >> i think we'll have a tough first quarter. yeah, i'll get constructive when the fed stops hiking, but the fed will stop hiking for all the wrong reasons in the sense that earnings will start to slow. i think there'll be evidence that the fed no longer needs to hike, because things are really slowing down and i think that's going to happen a bit faster than consensus. and i think the market's starting to look ahead, not worry so much about inflation, and start worrying about corporate earnings >> right so, you know, this puts us back into the old conundrum, which is, the two things people say are, well, the fed can't stop hiking because inflation is so high, and they can't stop hiking because the labor market data is what it is but they're saying both of those factors will slow. it's kind of ridiculous we have to sit around there waiting and pretending like it's not going to catch up with reality >> and what you'll see next is, wow, i can't believe how fast this has slowed. things have really fallen off a

cliff. but it always kind of happens this same way or at least it kind of rhymes unemployment will start to rise last, we'll start to see warnings, i think, about corporate earnings with these reports. i think the fourth quarter will be fine, but the prospective outlooks, i think, will be cloudy at best, and may be darned right pessimistic and we'll start to get those later this month into february >> the guidance issues and all of that. so you do like amazon here this is a company that has seen probably its biggest revaluation since dotcom why do you think it can or do you think it can withstand some of the forces that you're talking about? >> yeah, so, yeah, you and i are negative on the near-term market, but that doesn't mean that there aren't some stocks that have fallen so much that they really discount most of the bad news and i think amazon is a perfect example. so amazon has fallen so much, about 50% from its highs, that it's now selling for the same price-to-sales multiple it did in 2015. but if you think about it, the

sales now are more than half services you've got aws, you've got prime, you've got advertising. and those sales have much higher margins than the sales back in 2015, which were mostly merchandise sales. yeah, it's the same multiple, but actually worth a lot more. and wow, it's an eight-year low on that measure. now, the other thing that's terrific about amazon they absolutely love is they have doubled sales since 2019 of course, that's the big pandemic bump. but, they haven't given those back there's lots of other companies, peloton would be the poster boy for this, where, sure, they had a big pandemic bump, but their sales are now declining. amazon's sales will grow less quickly, but they're still going to grow. they're going to grow about 10% this year, a little less than that next year, even after this doubling of sales. and yet, the stock is down 50% they really have a cost problem, kelly. and if they can get that under control, i think we would be real winners with the stock. >> great point, maybe inflation

will solve some of that it comes down quickly it's amazing to see their forward p\e at 65 while apple's is at 20 do you want to offer a quick comment on apple the apple stock is now under 21, market cap under $2 trillion, a superlative company by all accounts, i would think you would be up here pounding the table on owning apple. why aren't you >> $2 trillion used to be a whole lot. it's still a lot i guess i'm old enough to remember when apple, it wasn't that long ago, 2016/'17 when apple sold for 12 times earning and was thought of as a hardware company. i get it it's the most important electronic device in the world, et cetera, et cetera and yet a multiple in the mid-20s for that and the growth on an average year in terms of sales and things is not over 10% so it's relatively low so, you know, the glass is really being seen, at least for the last couple of years, as more than half full. and now i think we're kind of

coming more pragmatic. so i don't think apple is a screaming buy here i think it's a terrific company that's finally feeling some of the effects that some of the other companies have already felt >> let me just finish this -- >> sure, sure, go ahead. >> it's important that apple fade, because the market leaders have to give up the ghost before we can really set another leg to a better bull market ahead >> oh, interesting so you're not even disconcerted. you're kind of saying, this is part of the process we need to see play out >> this is like the last domino to fall or maybe one of the last >> i was going to say, if apple wanted to stop the whole stock market sell-off, maybe they could come out and give us some 30% growth numbers for services or subscriptions for a service or something like that, wouldn't you say that would turn sentiment around >> i sure would. and the good thing about all of this negative news is as you put it, there's a lot of dry kindling so a little piece of good news from amazon, from apple, from google could really, you know,

catch the tech market, at least, back, at least for the moment. but i do feel strongly that tech is not going to be the market leader for the next couple of years. we've seen that movie, it's in the rearview mirror. i think we should look more towards the quote/unquote real economy than the digital economy. >> finally, i have to ask you about this before i let you go you and i have talked about the home builders and the housing cycle and all the rest of it stanley black and dercker is on of your picks. why? why? >> i like stocks that have what i call the gag factor. so if you explain it to somebody, they go, oh, how could you like that? >> i like to say black and decker is getting hammered it's down from 200 to the low 70s. down about 65% look, folks are buying less hammers and nails and drills than they were before. and again, it's a pandemic hangover black and decker put a lot of inventory out there. they've got some serious inventory issues, but those will go away. this is a 100-year-old company

that's selling near a record low of price-to-sales. i like it. no good reason to buy it today but if you look out a couple of good years, you're getting a historic company at a historic margin >> the gag reflex. you called it before i did it. chris, great to check in with you. chris chrisante with mai my next guest believes that the fed is making one policy mistake after another and will be forced to stop tightening and perhaps cutting yields next year buying me is kumar srikumal. and chris thinks that they will have to quickly pivot once they see corporate earnings start to drop >> i think when corporate earnings drop, when unemployment

goes up or the strong dollar, any one of those can do it, kelly. most importantly, 2023, we are entering the election campaign year right now, there is the election of the house speaker going on right now. all of this is going to have a major impact on what the fed is going to do. powell has already got a lot of criticism for his actions, from senators and representatives can be and i don't think he and his colleagues can continue with rate increases for much longer it doesn't have so much to do with inflation, which will remain higher than projected, but yet, he will stop increasing, maybe cut interest rates for the simple reason it's a politically more appropriate thing to do. >> politically more appropriate. let's boil this down to what investors should do. do you agree that people can kind of start dabbling a little bit in stocks now, sri

what about bonds it sounds like you see a slowing economy, could make them a buy here, as well. >> under recent -- let's take it in two or three steps, kelly until recently, both equities and fixed incomes were a bad buy. because of stagflation, equity prices came down and bond yields went up, so you could not find relief in either asset class so right now, the change that has contain place is that bond yields have peaked first you have a little bit of elbow ro room, an ability to rest in bonds and that will be good for the next few months. also, look at alternative assets, look at opportunities to invest over the next five years. i've talked about globally diversified real estate as way to put your money into an immediate impact on equities but equities in the short-term are going to take a hit.

and i can't see anywhere that you can get relief from that >> so, when you say a hit, how much further do you think they are, you know, are we talking about? and what makes you so certain? >> two or three things one, i've been saying for a long time, we are headed to stagflation. what's going on now is not at all surprising it is exactly the part that the fed has led us to. the they misjudged inflation and now they are overdoing the tight pg, and today, they are causing a recession. that's why i feel so certain timing look at the bond market, the yield curve from two years to ten years, as well as three months to ten years have remained -- have become very inverted the 2 to 10 inverted in early july, and it inverted to minus 84 basis points in november. and that's the most we have had, kelly, since the early 1980s

we didn't have that kind of an inversion, even in 2006, 2007, ahead of the 2008 crisis that tells me that the recession is coming about the middle of 2023 a retailed issue a yield curve bought the 2210 have started steepening in the last two weeks >> we just showed that >> and that steepening, in turn, suggests that the bond market is anticipating a recovery after the recession. the bond market is far ahead, even before the recession begins, and anticipates a recovery >> quick final question. we know there are people at home banging their heads on the table, great, i guess i can buy bonds, but this all sounds pretty horrible. can the fed cut rates at the next meeting you know, they would never do that, for all the reasons that we know they wouldn't do, but is there a of avoiding the outcome

that you're describing what could they do here to turn policy around quite quickly? >> they can no do anything that is perfect from a policy viewpoint, which is, to continue increasing interest rates until they get to a 2% inflation target they're not going to reach it. so what is the fed going to do, not what it has to do. what they're going to do, i think, is to wait for inflation to come down to about 4%, 4.5%, of the cpi, and once it -- and then declare that as victory and go home. but there is no better way to do it than to say you actually won and leave the battlefield. and that's what's going to do. and that's what is important to investors. that will be good for equities at that stage and the bonds who have already had a capital gain from now until then, and they can switch over from bonds to equities, those are the various opportunities they have in front of them. >> i listen to you and i go, you know, maybe i understand why we're having such an ugly start

to the year. thanks for your time today >> thank you very much gl glad to be with you. dow is down about 240 points coming up, goldman's head of commodities jeff curry will join us why he still believes this is the most bullish environment for commodities since late 2020. that is next plus, tesla is tanking after missing the street's estimates for deliveries the stock is down almost 15% now. one analyst sticking with the stock, saying a buyback could be around the corner. he'll join me to make his case as we head to break, here's a look at how the market is trading. the s&p down a percent a thousand points lower from where we started off 2022, as bob pisani pointed out and the dow down 235 we're back after this. at fidelity, your dedicated advisor will work with you

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welcome back to "the exchange." 2022 brought investors a lot of pain, unless upper invested in energy the energy sector ended the year as the only one in the green, closing out with record gains of 59%. oil not gaining today, wti and brent down as the sell-off continues. but my next guest remains bullish. he says the set-up for the broader commodities complex is

the most bullish since the 2020 super cycle began. joining me now is jeffrey curry, global head of commodities research at goldman sachs. it's great to see you again, jeff welcome. >> great thanks for having me happy new year >> where are we on the pension fund barometer of them taking your call versus not taking it these days >> they're not taking it people just do not believe the story. and i think that's important here, because people think it's over with. they do not believe in the persistency of it. i think it's important to go back and go, what caused the sell-off in the second half of last year? one, russian disruptions did not materialize. two, you had rolling lockdowns in china due to covid. and three, you had 325 basis points of rate hikes and a strong dollar in the second half of the year. put all three of those together, that created a 30% sell-off.

and you pointed out, energy was up 60% last year commodities more broadly were up 26%. that's why people don't believe in the story you'll probably get asked, what's changed everything is changing let's start with russia. you're starting to see evidence of the sanctions beginning to bite we've seen exports out of russia beginning to roll over recently. and when the product restrictions occur in february, that's going to get larger second, we look at china you're seeing a rebound in mobility, bookings for holidays, subway ridership, all of it's beginning to show a rebound. then we look at europe pmis, rebounding gas prices up. indian pmis rebounding the overall picture out there sequentially looks much better and i'm not going to belabor the supply story i've come on here and made those supply arguments before. what we need is sequential demand growth.

and we're seeing evidence of it. >> i thought youed ehad the bet illustration of anybody out there when the fed's stimulus and global stimulus really hit to explain why we were seeing this massive inflation and your point was, you know, we're putting dollars into the hands of consumers who are going to buy tons and tons of things and when you just hand it to the wealthy and they buy stocks and asset prices go up, i think as you said, we were running out of microorganisms there was some way you had of phrasing it that was so app. and i wonder what happened is the fed heard you and said, you're right, and we need to slam the brakes on this, because we're going to literally see shortages of everything, everywhere and now they're running that script in reverse. that's a pretty powerful thing to fight and it doesn't look like that's going away >> another way to say it is, what is inflation? too much money chasing too few goods. what happened at the end of last year we still had too few goods, but

we didn't have too much money. the best way to color how significant was, you take the yen before this recent boj action, you know, we started last year at 100 it went to 150 that means there was 50% fewer dollars to chase oil in a broader commodities. and so that's precisely what happened in the second half of last year is the money supply that could chase these commodities was dramatically reduced. >> exactly and we see the charts now. the money supply is falling off a cliff. it's going way in reverse. so, i feel like, why would i want exposure to commodities until that story ends. that's kind of what our opening guest said until the fed starts to allow some kind of expansion on the balance sheet or loosening of financial conditions, it feels like commodities should be under pressure >> all you need is for it to stop and abate you don't need for it to actually reverse you go back to what happened after the rate hikes in '04

through '07. by '07, you ended up having a massive rally in commodities because of two things. the fed stopped hiking and you had stimulus out of china. what do we potentially have in 2023 hey, terminal rates. i don't want to get the argument on where that terminal is, but they're likely to slow down and likely to hit something akin to a terminal at the same time, and here's the key point, china, largest commodity consumer in the world. largest oil importer in the world. second largest economy in the world, starts to stimulate rebound, reopen, that's going to put a lot of pressure on the goods markets. >> do you think basically assist coiled spring, that the moment that the fed even signals that they're going to back off, that we will see these prices shoot higher because it's amazing that as this anticipation builds and as sri-kumar pointed out, bonds are already pricing in the action you're describing, yet oil is falling another 3% today it doesn't seem to have any feeling that that demand increase or that financial

conditions impulse is coming >> well, when you look at the decline in oil commodities, it's pretty much in line with the strength of the dollar that we're seeing today there's no real news out there so, you know, you do need to have people be, you know, confident in the rebound of ex-u.s. growth because that's what's going to weaken, you know, that dollar, and create that stimulus and confidence, by buying not only oil and copper and the rest of the commodity complex, they've got to believe in that they've been burned so much over the last six months, i come on here, going, fundamentals are tight. they're not going to be the first ones in. they've got to see a rebound what could be the catalyst you have a lot of rebalancing happening over the next several weeks. you're seeing the evidence of that in, you know, in terms of, let's say the big bcom indices you look at the cta indications of transit right at the edge if this thing switches, you get that buying in there, that

technical buying then you start to see this market move higher but going back to your questions, are people taking my call no, they want to see that rally first before they're going to take my call, and they're going to jump in here. and we'll see what happens over the next couple of weeks as we go into the beginning of the year but that fundamental story for commodities, it's obvious, it's pretty rock solid given the rebound in chinese activity and mobility, the fact that we're seeing europe pmis rebounding, your two big weak points starting to show a positive turn there. >> great stuff thanks for your time, jeff jeff curry of goldman sachs. speaking of goldman, a quick programming note brian sullivan will be live in miami at global's global energy and clean tech conference on thursday he's got a big lineup of guests, including the ceos of chesapeake and pioneer. perfect time to hear from all of them dow is c officially taking control of the house today and the vote for the speakership is underway. we'll have the latest on the gop

infighting and whether kevin mccarthy will be victorious. as we head to break, here's a look at the dow heat map with apple by far the biggest laggard, down 4% pretty even split among the rest of the stocks, though. as you can see in the leadership today, disney rebounding with a ga oabt we're back after this. m mark and i live in vero beach, florida. my wife and i have three children. ruthann and i like to hike. we eat healthy. we exercise. i noticed i wasn't as sharp as i used to be. my wife introduced me to prevagen and so i said "yeah, i'll try it out." i noticed that i felt sharper, i felt like i was able to respond to things quicker. and i thought, yeah, it works for me. prevagen. healthier brain. better life. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go.

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welcome back to "the exchange." we started with a decent tone, quickly turned negative. they've cut the losses to a loss of 175 here are some of the movers. a lot of them in the tech land apple officially falling below $2 trillion in market cap for the first time since march of

2021 the stock is trading around 124 bucks, lowest level since june of 2021. here's a look at where the rest of the megacap names stand alphabet, just over $1.1 trillion you can see those market caps listed there amazon, not even part of the trillion-dollar club anymore here it is at the bottom, 864 in alphabet, still at around 1.1. let's get to tyler mathisen for a cnbc news update tyler? >> kelly, thank you very much. happy new year to you. here is your cnbc news update at this hour. former ftx ceo sam bankman-fried has arrived at a manhattan federal court where he's set to face the charges that include cheating investors out of billions of dollars. sbf expected to plead not guilty backman freed has insisted that he did not commit fraud and was unaware that customer funds were being used improperly. meanwhile, buffalo bills safety damar hamlin still in critical condition after suffering cardiac arrest on the

field during last night's game fans have flokd flocked to a gofundme that he set up to raise money for toys for children impacted by the covid-19 decision the fund has received more than $4 million denise george was fired just days after she filed a lawsuit accusing jpmorgan of facilitating jeffrey epstein cease sex trafficking scheme governor albert brian did not provide a reason for relieving george of her duties, though local media reported that the governor was not informed of the lawsuit before it was filed. kelly, back to you >> tyler,ly see you soon still ahead, it's been a rough ride for tesla in 2022 and we're not off to a very good start now. the stock down almost 15% today, just off that level right now on those disappointing delivery configuration. but my next guest is sticking with the trade he's going to talk about

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welcome back to "the

exchange." tesla just closed out the year with a 65% loss and it's down almost 15% just today. the company dealing with production holds in china, cheap vehicle discounts, and musk's controversial twitter takeover on top of that, q4 deliveries for the ev maker just came in below analyst expectations still, our next guest remains bullish on the stock, maintaining his strong buy rating through it all. garrett, welcome the hard thing about talking to you about it now is that if your right to be bullish, it is a better buy now than it was 70% ago, but what just happened to this stock and your own estimate for deliveries, i think, was 435,000, it came in at 405 how weak is demand, really >> sure, thanks for having me. that's really the big thing that's weighing on the stock this was the third straight quarter in which tesla's production has exceeded its deliveries so it's built some inventory which has helped

explain some downtime it's had had the shanghai industry, but it was a record-high quarter in terms of deliveries. we think there are catalysts ahead in terms of a potential stock buyback announcement of the magnitude of 5 to $10 billion, we think. we know the cyber truck is coming at some point in the next three or four quarters that model has a record high backlog in terms of any forthcoming ev model, upwards of 1.5 million units of orders have been placed. and also, starting on january 1st of this year, the lower-priced versions of the model 3 and model "y" became eligible for 75 to $100 federal ev tax credit. so given the recent sell-off in ev equities in general, not just tesla, but names like rivian and lucid, which have declined by

much more, we view this as a buyinging opp iopportunity here tesla. >> i wonder if the criticism that they are all talk and no action -- i mean, they've done a fabulous job with the existing models, getting it up to speed, sort of giving us the template for what an ev maker in the u.s. can do over the past decade. but now people are starting to want more, you know? they feel as if they don't have a lot of options it takes forever to get these vehicles now there was a question about how much demand was pulled forward with the pandemic and how much is still out there. there's a lot of people with a little bit of byuyer's remorse because they're not used to the tesla interface. what would you say about these demand concerns? maybe the ev tax credit will be somewhat of a catalyst, but what kind of reset do we need both for epps this year and total deliveries >> so, we're still expecting more than 40% eps growth this year over last year. tesla's coming off a year in which it posted, you know, more than 40% volume growth

what they really need is to bring the cyber truck the market as fast as possible. so if there's any way that they can expedite that, you know, it's been since march of 2020 when they put out a new model, the model "y," you know, aside from the semi, which they just recently rolled out, so we think they just need, you know, that new product to get people excited about tesla once again but, you know, as far as the inventory build and some of the demand-related concerns, tesla is not alone other automakers are suffering from the same thing. >> sure, absolutely. and i would add, the fed has been probably the single biggest force in this stock, other than elon himself and the whole twitter debacle. to really turn things around, do we need a change of narrative on the twitter story? and what is your thesis about stock buybacks >> we think the narrative on the twitter story is changing. and, you know, that is really investors wanted to see elon musk take a step back and assume

more of a chairman's role, to find a ceo for twitter, because clearly, it's been a huge distraction for him. and so,he's on that path, we think he's searching for a ceo right now. and then the buybacks they've alluded to that they could announce a buyback, you know, sort of, of the $5 to $10 billion-type magnitude, you know, at some point in 2023. and so, we do think that that's coming tesla's balance sheet is very strong the credit rating was just raised to investment grade by s&p, and they're still generating plenty of free cash flow so we really think a lot of these recent concerns are overblown. and so we view it as a buying opportunity. >> they've got to get the cyber truck going. that's your message. i take all of your points. garrett, thanks for joining us today. we appreciate it garrett nelson, cfra still ahead, the republicans are back in power in the house, but

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welcome back the 118th congress is now in session and it's a contentious start for the house. republican leader kevin mccarthy warning there may be a battle on the house floor for the speakership, as some members of his own party refuse to vote for him. let's get to ylan mui in washington for the latest and the implications, ylan >> well, kelly, that vote is now wrapping up and california republican kevin mccarthy does not have the votes that he needs from his own party to become speaker of the house that means that this will likely go to a second round of votes for the first time in over -- in just about a hundred years now, earlier today, mccarthy laughed off questions from reporters on how he intended to

secure this position he said that he is ready to fight to win and he's not going anywhere >> we may have a battle on the floor, but the battle is for the conference and the country and that's fine with me. >> reporter: now, kelly, even if he does eventually secure the position of speaker, how he gomgomp governs is going to be defined by this battle with house conservatives. there were last-minute negotiations, i'm sure there'll be more talks to come later on today, but one of the things that his components, including the speaker of the house freedom caucus scott perry had been asking for were votes on things like a border plan, on term limits, on a balanced budget as well as something called the fair tax act, which would eliminate the irs, get rid of the federal income tax, and impose a national sales tax instead. so these are some of the things that are on the table. ultimately, this is a political battle that could end up shaping the types of policies that house republicans pursue

but kelly, i can tell you, earlier today, there was some frustration from moderate republicans who say they want to restore fiscal sanity in washington, but they can't do it while there are, so far, 19 of their party members gumming up the works. >> wow we normally have this done by now. i don't want to say unprecedented, but unusual ylan, thanks keep us posted ylan mui on capitol hill coming up, it wasn't a very happy holiday for southwest customers as nearly 16,000 flights consider canceled next week southwest pain was one private jet company's gain, though we'll have those details, next and we'll keep an eye on markets. the dow is down 300 points or so at the lows. we're down 189 as we try to avoid e meatthsa fe as last year, starting off on a down note for all the major averages. "the exchange" is back after this

welcome back to "the exchange," everybody despite a busy travel season, airlines are mostly lower over the past week, with southwest in particular down more than 5% after canceling thousands of flights due in part to outdated systems. southwest in total canceled nearly 16,000 flights during the christmas week, sparking outrage among customers and giving a boost to some private jet companies like my next guests. joining me now is tom smith.

he is the co-founder and ceo of set jet. tom, welcome >> thank you for having me on. >> what kind of boost did you see, or scramble, if i should call it that >> we're based here in arizona, it was one of the top cities that was affected by the cancellations. we saw almost 100% increase in our website traffic and a 33 to 50% increase in bookings, because people are frustrated and looking for alternatives like set jet to travel and get back time. that's their most valuable resource and we tried to do that through our services >> granted, flying private isn't probably the first thing most people think of when they go, okay, i can't go from southwest to a private jet how much more expensive is it for some of your flights >> well, you hit the nail on the head you can fly with us for $750 a seat, which is unprecedented for private jet travel that's the big differentiator we're bringing to the industry, instead of spending millions to buy the jet, we sell a seat on our flights here in the southwest, and that's what makes us the big value proposition for our members. >> $750 is pretty reasonable,

except that people can't probably do that all the time. am i right that you have a membership model, as well? how does that work and what's the approach to turn what might have been a one-time demand boost into something more sticky >> we've been flying for three years, we have over 5,300 and to be a member and then they can book a seat for $750 and that again value proposition is very similar to a business class or first crass seat or some last minute economy check-in, so that makes it a compelling business model. >> and yet you are dealing with some of the same issues that the traditional airline issue is, which is a lack of pilots, is that right >> that's correct. the industry has been facing it for years. the pandemic exacerbated the problem. but trying to get pilots through the training and then keep them current, bring in new pilots at the same time. an issue that we're all facing but we work closely with our operator to make sure that we have crew and training and don't have those impacts, but

something that is affecting everyone >> how do you ensure the safety of these flights we're all used to the tremendous headache with the regular airports and as you are trying to open it up to more travelers who might not have flown private in the past, how do you keep people feeling safe and secure >> our number one concern is safety and we work with platinum rating, which looks at maintenance, flights, training only 3% of operators have that, so that is why we selected this oper operator >> and when you watch the southwest metaldmeltdown last w what were you thoughts as a business leader and fellow pilot? what tshould they have done here >> i wasn't there so i can't tell, but certainly the systems were behind. their model is built on speed and having quick changes when you land and when you have a winter storm

storm like that coming in, i think that ahead of time they could have preempted it because you will have to deice the aircraft so you will have extra time needed to get the planes ready to fly and then they have the conglomerate of everything coming together for a perfect storm. >> i'm guessing that you are not using a telephone system for your technology. >> no, we wrote our own proprietary software and we try to keep on top of that >> tom, it has been a pleasure thank you for joining us tom smith, ceo of set jet. and now the market flash >> social stocks are split shares of meta are up more than 3% on growing talk of a regulatory crackdown on tiktok and mike gallagher compared itit ittic tiktok to fentanyl advocating the ban from government devices be expanded nationally and they do expect digital ad growth to outperform overall advertising growth

you see meta shares up over 3% meanwhile pinterest shares are off about 5% on a guggenheim report on a neutral rating saying that the path declined the past two months. snap shares are down about 2.5% with another neutral rating. saying that while they see international growth momentum, they also see some softness here in the u.s and take a look at roku shares, they are off about 3 about respect. you also see fubotv off about 5% after ad was lisa slowed dramat lick netflix shares are pretty much flat as lower content spending could hurt the subscriber growth but help bolster profitability and economic headwinds will force netflix and traditional

broadcasters to rethink their content spend. back to you. >> julia, thank you. still ahead, mortgage rates receding but ttwice as high as a a ago. but there may be a break somewhere. we'll tell you where, next ♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

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we know mortgage rate have doubled, and any could climb once more. die diana olick has the story. >> and mortgage rates on a high note, average rate on a 30 year fixed had swung a percentage point lower to 6.25%, but by new year's eve, it was back over 6.5% prices have fallen since june, but still higher than they were a year ago so today's mortgage rate

translates to about $2100 without taxes and issuers which is a 63% than a year ago and they predict it will head over 7% again this year and end the year at 7.5% and on the bright side, there is much more supply 47% more than a year ago but still slightly below historical average, but it is translating into a slower less competitive market homes are taking an average of 56 days to sell. and the home builders have been pulling back and you see the home building etf is down about 26% year over year but off the much sharper lows from last june when rates first went over 7% and the most recent sales report we got on new contract signings showed a surprising bump up. so maybe that is the good news for the new year happy new year >> exactly

when does the spring selling season really start to set in. i mean, when does all of wha you are describing translate into a make or break year for the housing market >> the unofficial start of the spring housing season is presidents day weekend in february but it really doesn't get going until march and april. the big question, will we get new listings a lot are pretty stale and so that is why we have so many listings now so we want to see fresh listings and what the price point will be another new report this morning showed prices in november weakened even more significantly. so if prices continue to come down, the question is where is that line when the buyers say okay, i'm getting into a not so pricey housing market and i'm getting used to higher mortgage rates so now is the time to get back in. >> exactly we'll see. diana, thanks. and it is not just rates that could head higher, coming up we'll trade some top analyst picks including a payments company.

"power lunch" starts right now welcome to the first "power lunch" of 2023 glad you could join us we're watching two big names in the news today first, sam bankman-fried will be arraigned shortly in in new york city courthouse. he is appearing in person to face charges on eight criminal counts he is expected to plead not guilty and we'll take you through as it happens. and tesla slide is the stock story of the day as it has been for many days in recent months down another 13% today after to missed barely delivery estimates for the fourth quarter down more than 70% from its 52 week high. we'll talk to a former tesla board member about what elon musk needs do to get tesla back on track forget about twitter kelly, give us a check on the market