i'm carl quintanilla with sara eisen. setting the agenda today, wilmington trust why she's leaningçó■into growth why tech has baked inxd■more bad news than its peers. >> uplus, an exclusive int with general millsu■■■@■á ceo, harm oning >> and laterq■ on,l■ç■ alan ratr pending home sales rising in 5a■ february, but down 21 year on5a■ year pretty interesting housing data thise■ week. >> take a look at stocks, starting off pretty strong this morning. every sector is higher today it is being ledi] by technology, but also strength in materials and q■energy the nasdaq comp up a full

we'll start with the volatility and the fer look atqthis chart in thex■ past two months, predictions for the fed funds rate in january of ñi■024, by e way up as high as 544 to as low■ as 3.69%, butxd■nowxd■wife comek a little where we startedxd■ february mike santoli sayingqthe bondq■ market hasn't been giving a clean redqon genuine fed ñ expectations what do you ñ■mean, mike >> at this distance,ç■ we're talking about nine months w, year-end fed funds rate. because of thet■ çó■hipsaw, bec wheret(■we've gone back to now before the january jobs report before you had l■■big over-heating scare, thatq■ cread a huge rush of bond selling andc açó■big short -- kind of short position built up in the bond market then the banking stress. whips in the other direction.xd

massive short squeeze on the &há% and so,qi don't thinkok you were actually getting the collectiveú wisdom of the bond market, with a very clear sight"■■■of what t j■p (t&há■p &hc% and what it really said to me was, at the lows in yield and at the lows in fed expectation, it was, something bad isok going to happen something further bad5a■ is goi to happen in the banking system. and it was almost disaster insurance. i think that we have to take that all into the mix. also, it really underscores that it's a veryçó■volatiley■■■macro situation right now. and it can break in either l■rection. and that's why i think the equity market has been trapped in this range. >> there's a lot of commentary yesterday about that januaryñ■ hadn't @ thosdk adjustments, maybe svb would be a different story today. doesn't that sort of create liabilities for every print we+■ get? >> it could be the case, yes although, you know, the ç■losse thev4vqpá■)■ losses were onok svb's books at its last earnings report it was one of those revelations

that was right there, waiting for people to notice, it was the failed equity offering we're going to basically write this story four to five times, in terms of how it all happened. i think it does show you the fact that the market got really when i wanted jobs report. also, powell coming out and saying, listen,tv■uz might haveo go higherqfor longer >> here's my question. times, right whether it's the regulation, the tighter ending standards if the takeaway from this whole banking crisis is the economy is it only beingxd■priced into certain sectors? >> it's a good question. i think it's the starting point. andfb■=■u$ñ■p starting pointç■x know, high-single digit nominal growth and we were thinking the fed was going to have to do all towards a level that's going to haveñ■ inflation moderate. and now it's suggesting rate-sensitive areas of the market, the old commercial real estate storyq■ has been there, waiting to be recognized for a while, as a big x■liability.

and that's getting hit but i also think, you can say, the market ist(■taking an upbeat stance on this, meaning that they're pricing in the moreu benign qcenario,o■ which may or may not come true. mike, it's definitely tryinge■ slice and dice here betwefñ■ sectors. mike santoli tech has beunó one of the biggeq beneficiaries of all of the ñ■ uncertainty. our next guest says the sector looks pretty attractive after baking in a lot of bad news over the last year, tellingñ■ inve■> to lean into growth and away from value joining us this morning, wilmington truste■x■ head of investmentx■ strategy, megan sh. it's always nice to start the hour out with you. talk toç!■uz about this call is this a pivot for■ç■ you or n? >> yeah, with thanks forç■ havi me, carl z■da little early on this call, and our work across macro indicators, j■evaluation, a: growth overvalue for severalf■ months now andñ■ i think it may took some of the stress in the

banking sector and ax■ decline rates to see that realized but i think lookinge1 forward as we see what's already beenx■ priced in and a lot of the bad ■ from micron yesterday was not good, but starting to signal that maybe we'rei■ finding a bottom in terms of expectations for the tech sector. and just growth overall, if you think about the rates picture. inflation battle and we knowb■■■ inflation is coming down correlated with inflation. itself and as we look at the rate picture, and the economic picture, i wantt(■to be looking for companies that are generating their own growth. you get a lot of higher quality, as well as megacap in there. and we think that that's really where you want to be positioning for the year ahead >> we contiz■■to getw■ calls fro otherxd■strategists that argue, mean, a number of things hi■

equities of the year it's better to be inr the year than stocks, ifw■ you among some strategists you clearly do not believe that. >> well, while we are -- i would sayñh■ cautiously optimistic onh tech sector andqwe like growth over value, that's really açó■re pessimistic call, because value is/jujut■i■ó■to the cycl■i■l economy. we do ht■a recession as our base case for this year. and we'rew3■p slightly underweit to equities. but where we're underweight is in small cap é wo large cap. i think it's -- you know, you have to slice it a little finer. and i think there really is a lot of uncertainty out there.t so youç■ don't want to be too defensive. the consumer isñi■k incredibly maybe even frustratingly so for some of the bears. so as we look ç■x■forward,i■ )r■ that we're looking at a picture where there's a lot of stress in signsó%z things breaking, but

that consumer is still hw up very q■well >> i guess, megan, i'll ask sort of what i asked mike santoli, which is, if the e#■pááñ is set■ to weaken furtheri] and even if it's not asçó■d■dçrt asñi■some e line is we're going to getting tighter lending standards and have more tightening in the system and that's going to pressure the economy, why is tech holding up i get lower rates are good for multiples, but eventually, doesn't the recession and lower earnings impact have to catc0d up >> yeah, sarah, it's a great point. i think that what we've seen is sort of almost like -- and we've heard people talking about rolling t■t■recessions i think more in the sense of the global economy i would say we're almost dealing u.. and the tech sector and a lot or that decline in technology, hardware, memory, consumer-facing technology has really beenok beaten xd■p. and i think as wer

just a relative story of having thate■ pessimism already baked andqthings showing that they're, capex perspective, like to not get materially worse from r but i think it's, you know, maybe more than a sectorq■ñ■i■tq it's really■ a size story. and i think that anything f■ç■ exposed -- any companies fáçó■xd to smaller banksf■ and small cap asset class in general is likely interest rates and the continued weakening of the u.s. f■economy. >> so it's kind of like you expect the weaknessesu in the economy to be sort ofsector or more isolated, depending on wheree1 you sit? >> yeah, i■ i think it's about what's already been priced in perspective, we've gottenñi■t■6, but we ( ■q■not seen a lotç■ of■ pessimismt■iced into consumer discretionary, for example and i think we're goinglpfá to become bifurcated.

where f■higher-end retail, luxu goods are going to probably continue to hold up well any company that has real'1x■■ really strong pricing power and middle and lower tierñi■of consumer discretionary, we think, is going to weaken. and i think that's where you don't see as muchç"■f it priced in, maybe even in energy, as well, where we'vexd■gotten a little bit more pessimistic. i■v■ink there are some parts of that that are more cyclical part of the market that has still >> megan, appreciate it very megan shue joining us fromt■ wilmington trust fire ) á■r"t■ before, the room, one ■ at a rt■ before, the room, one ■ furniture at a time. and there's areas of the economy that look strong and others,i■ you point out, that are clearly unz the gun. >> i think the question is, what kind of recession areçó■we look■ ax.■e■ months ago, everyone said soft and qhallow now we're wondering, ó[■okay, a harder landing recession more

bakedlpfálp in b happening with banking no one knows how severe the àc■edit crunch is going to be and no one knows how strongly the consumer has held up with 525 basis points of tightening in the system, in the u.s., and not to mention in europe everybody has been shockedj■ at the resilience there so does that continue to carry f■ % i think it's a little more confusing, if you think that earnings is the next shoe to drop for the market, it does super enthusiastic about these low rates. >> yeah. still to com consumer staples companies have been seeing profits rise as they continue to pass these very highñ■ prices along with inflation is the consumer going to keepq spending harmoning. he's back with us on the other side of the break. ut the dow up 186 points makes your customer's experience ever better.

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look at some oft(■these é -■ highs. monz general mills delivered a bew4ñ■ across the board in recent it for the fiscal year. so what should weñlexpect from the consumer for thnf restf■ ofq year joining us t(■ow, genu$■1■ mills ceo, jeff harmoning. jeff, welcome. good to have you >> it's good tob.■ see you, sar. thanks for having us xd■n.i■ >> it's almost hard to believe that you're able to get so much

pricing power right now wyt some of ) ñ■q about the economy. wh"uá■j■that look x■like?o >> the consumer's in a really interesting placeñi■right now. on the one happened, we have!w/■ benefit to consumers, of course. and savings rates still remain above pre-pandemic xd■1levels. on the other hand, the semester aren't nervous about inflation, and we see inflationx■ broadly across the economy the department of labor came just a couple of weeks ago an÷■ shows that inflation is roughly about t■6% and certainly, in the food xd■ industry, we're not immune from t we've seen our costs go upñ■ coupl■3■of years in fact, you know, it'sxd■ volatility i haven't seen ine■ 30 years orw3■soq■ñ■ó■general m. >> but aren't those costs ore■x■$■á■least flat >> you e1know, what we see in t back half of our fiscalxd■year, which endsx■ in may, we're still seeingf■ double-digit inflation. reallyç■ driven by labor and energy and still to ae1 degree,

commodity costs. what i will say is that we dov of starting to declineht■ over the next 12 months in fact, we just gave guidance a we expectb is to say ouru costs going up ■% aqosr"■single digits over the cour'■ñ■of the next 12 months. we don't see an environment where there's not ñ■inflation. i suppose the better news is to where we see mid-single digit costs going up next year the rate of inflation we think will slow, but there wil[( still prices e1going where the consumer will push back >> you cnow, (@q great thing about the products that we serve, they're mostlyxd■k at ho. and when consumers get pinched, which they're starting to feel now, consumption shiftsxd■from restaurants andxd■at-homee1 eatg to at-home eating. a meal at home costs about three times less than a meal out

that's the firstf■lace that consumers go and even now with the inflation we've seen and the costs we've mor áil even our blue buffalo pet food, which is a natural and a premium pet food, it costs about $1e1 a day to feed a medium dog if you have a great dane, more than hat >> long-haired chihuahua in this household, sook not nearly the >> jeff, is that a scenario you're running in your models thatq■ lookse■ at a dramatic drop-off inxd■inflation? and i guess, if so, what kind of odds are you givingx:■it >> there's not really a scenario we see where our costse■ are gog to go down dramatically. certainly, we've seen #'l■odity■ costs like grains, whether it's oats or wheats, those costs have calmed downt(■and are relatively stable but what we see arei] labore1 c continuing toe(■r■ise. the same withu some of ourgéátqo

pac. and so even though if you look down theñ■ market, grain prices haven't gonex■ up, that is true, but there are a lot of other parts of ourç■ basket, whether is labor, energy, or other things we just talked about that we still see continuingçó■to ri, consumer and our business, they don't rise at the same rate. one of thee■ things that general mills has been very good at over the last decade or so is productivity and we'reñr■able to allow a lotf costs through ç■productivity in fact, we save about $400 million a year in4s(■oductivity and that's our first linexd■3■of defense to increasing i■ñ■x■ç■i. so to the extent that costsxd■ don't go up l lot of that we don'te■t■ have to pass through to semester, we can save that in productivi■[■bmwe n the next 12 months >> are young people eating cereal again?l this is one of the biggestw■ knocks against your stock andlp performance in recent years has it okchanged >> yeah, our cereaz

growing reallyç■ well. we've grown our cereal sales for j■iw we've gained market share for four out of the last five years. and we have some really good introductions. who knew that mini versions of trix and reese's puffs andq■ cinnamon toast crunch would be a bigfá hit, but they really are so our cereal sales have been really robust, not just here >> i could have told you on the 99=9■■toast crunchld you on the i've always been a fan another macro question for you so the pandemic-era s.n.a.p. benefits, food stamps,lended, o expired in march seeg how much of a driver it was. >> we don't see -- we don't ■jl really seeñ■ a huge impact from that, sarah, and that's because of the s.n.a.p. benefits for every $1 ofxd■s.íé benefits, only a6q■ about 30 cents comes back to food so as consumers cut back on other discretionary items, they're still putting their money into food.e■ even though the s.n.a.p. program has been cut back, we don't see■

a one-for-one impact on our business it's important to say even÷■e■ though s.n.a.p. benefits have been pulled back from their pandemic çó■ighs, they're still actually a little bit higher than they were pre-pandemic. >> are wexd■in a mode where you think the city continues -- i l■ mean, i'mr years ago, mostly pre-covid, where tot■ get buzz,e■ you real were looking at bolt-on, m&a, looking at buying e■smaller, mo nimble!óbrands is the industry still in thatt(■ mode >> yeah, one of the things that i think has made general mr■ls successful overqthe last fewt■ years, we've done two things well the first is, we've grown market share inq■ our core businesses if you're notxd■d■doing that, m isn't as interesting we've grown market share all over the world for five years in a row. in addition to that, about 20% of our portfolio is different than it waseq■t■u■■■re-pandemic. so buying bluet■ buffalo or a p treats brand5■■■u■ or a pizza c■ business or divesting yog j■■■i■ europe has really helpedq■

accelerate our growth versusñ■ what would have been otherwise so as we look ahead, the key for general mills is going to l■be, keep gaining market share and keep growing in our core categories, but also to look for eîi. and we feel great about what and with our m&a >> it's hard to believe annie's, thati■i■ acquisition was almost &há% i'm trying to figure out what the readthrough isñ■ from what you're saying and some ofw3■the other staple ceos we've had onñ■ for the advertising market you qguys areç■ some of thehbag■ right now. are you increasing ad sxe■q■in decreasing it, as you manage costs. how does that look >> one of the lessons that we learned from the lastxd■recessi■ and i was around for the last recession, in 2008,çó■ó■ó■is ths really important to infovest in times like these we're investingjf in data and technology capabilities, but also investing in q■advertising. we've grown our advertising at 4% over -- compounded over the

last few years and this year, we're growing our advertising double digits, because the key for us, especially in a recessionary market is to have strong lpbran. and so whether it's cinnamon toast crunch havef■f■ nine $1 billion brandst general mills. those are brands t&■á■consumers love and they'll conti"■■ to "■á invest in those. now for us ist(■a time to contie z■continue to grow market 3rj■e and grow infá our categories >> that's the■÷ñ most bullish tn i've heard from the advertising■ industry jeff har,■ investing double digit in advertising in this kind of market >> we're ae■ long way from whh is how you and i learned abo■h> and we ate cereal my kids don't eat cereal ub

enough bad news pri■ó into some of the retail names, when we're

chart of the day today is definitely nat gas, tumbling to fresh lows, now down 55% q]■ater to date, and on track to deliver the worst quarter ever onçó■ record that's back to contract inception in 1990. obviously, softer demand, but mostly milder weather conditions and balloo3■&■ inventory driving the move downward. nat gas just nont downx■ 27% and set to close out its third negative month in four they call it a widow makerx■ for reasons. but hard to say that anybody anticipated the weather certainly that we've had the last few months. >> and now all thex■ñ■ forecaste 250, which is still a lot higher than where we are. &há% it should benefit use■ç■e■ as bl payers, especially asñi■ air-conditioning season starts in the comingt(■months and it should benefit corporate america, where the cost inflation that jeff harmening of

general millsr double digitsqfor him, it'se1 a■ v■uction it should help that and oil prices coming down, ultimately, on profit margins, which are startinge■x■ to get py squeezed r >> also, our ability to help ou■ europe to the ç■extent we can, which of course looked pretty >> been one of the best precis >> incredible. >> dow is up 171, holding on to most of the morning's gains.q■ let's get a news update with frank collins. >> here's what's happening at china has threatened retaliation of house speaker kevini■ mccart meets with taiwan's president. china saida■■■any meeting woulde quote,o■ provocation, for taiwas president. said beijing's pressure would note1 deter her.x■c■ú■cf1 o a meeting with her and m. of congress have not been a judge in delaware has upheld the $2.4u billion bankruptcy plan for the boy scouts of america and will allow the organization to keep mb%9 a■■■ sexually abused as children while involved in scouting more than 80,000 men have filed■ j■x

as children.o■ ther of the compensation if you wanted, the boy scout's two largest insurers and not the organization and kentucky senator rand paul has come out against the ban on tiktok. in a move that breaks with his gopñi■colleagues, paul argued t■ banning tiktok would mimicq■ censorship by the chinese government he added that he will defend the bill of rights, even from members of his own party.x that's the very latest sarah, back over to t■you. >> i thought that was notable, too. thank you, frank collins after the break, the street ([qj5 too little, too late? and ubs says while lulu may have came out on top, there are plenty of namestúqhat won't. we'll tell you about some new calls, next. dedicated trucks and drivers.

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two hours into trading here. european markets are closing tech and finó. ■als leading the way, já■ the story abroad is ubs. shares are up big afterçó■ announcing the return of former ceo, sergio armadi, f■reclaimin■ the role to head up the takeover of credit suisse he was previously the ceo of ubs for ninei■ years before he departed in 2020 i think this was an unexpected move, but clearly welcomed by the market i think he's seenok as aç■ xd■a■ pretty enormoust(■1 challenge of putting togethert■ twot■ of the world'sxd■laz■;■te1r importantñi■banks, ubs and cred■

suisse and the chairman wask■■■the cfof morgan stanley back during the financial crisis.x d8>> yeah. there's so much banking news l today. there's that, there's the tie with the senate finance report about credit suisselp and the pa agreement that they made int(■24 about tax evasion and conspiracy there's this "washington post" story about the white houseqó■ offering recommendations to institute regulations once again, not completely roll back■ the 2ñq■■■bill that some argue have got the regionals into u■ trouble. >> right, so it'sñi■legislation, it's legal i]trouble, just addi■ to the list of challenges.f■ mark's point of view,çó■ubs+ has got a good d5■#■ñ■añr■sweetheart deal with the swiss governmentñ■ and swiss national bank u■ backstopping it, and now they're bringing in the ceo to take on -- and they're going to be one of the biggest banks in europe >> we'll see how much financials stay in the conversation, given eñ■q!%9áejut■j■t■on >> let's get to theñi■d■floor a■ post-to-post with bob pisani and see what's movingçó■this morning >> we're just off the highs.

the rallies are continuing, and the most important thing, things are calming down the volumes arexd■p calming down overall. i want to tell you some moves that have!■q' veryñi■significan. here's schlumberger. one of the big services stock. this was $44 on friday here. we're seeing much,l■ much lower volume here. look, $10 million shares will b■ typicalñi■for this, on a day it's $3 million right now. things are calming down and it'■ moving to the upsidew■ in the lt few days a couple of other things the banks are all calmer i'll showjfq1 you some crazy nus here com comerica, this was, what, $40 o■ friday here. here you see it's $43.ç■ @■ in the last few days.i■ look atfá thi.oç volume, 793,000 shares what it was doing 8 million, 9 million sh!■ a day on thursday and friday f■ fractions o levels of ñ■volume and volume is a good way to look at0■■■volatility when people areçó■freaking+■t■o, those volume numbers go through they're not pediatrici ingz■■■re

bapgs anymore. cyclical groups,q■ here's cf industry cf is in the steel business. terrible month overall these materials had a terrible one th. it's moved $5 in the lastñi■few days and the volume here, as q■$■ó■ i trending a little bit higher than normal. believe it or not, this is those 3 million shares a day.i that's pretty ç■good this is lifting on slightly better volume. that's a good technical indicator. and again, this is a beaten up cyclical group sjt■[■ reits here's the poster ñ■ñ■child. vornado is one of the big office reits in the country it simply x■collapsed. this was $13 at the end of last week that was the lowest level since 1995 that's how low it was. all right, not a lot it was çóü13, now it's $14.5.ç■■ much, much lower volume overallr

the concerns that were in the i s ■■banks, a modest rally and someçó■q■beate cyclicals. a modesti■ rally in reits.i■ overall, we are heading towards the end of the quarter so far, on a very positive note. back to you. >> a couple moreq■ ç1em1■ bob the notes grabbing oure■ attentn p (■ today we'll turn to the health of the consumestarting off withq■ lululemon the stock jumping today after seeing that holiday quarter sales surge. that prove prompted upgrades across the street, including citi, wh than expected inventory to sales gap and growth in china, which we asked thef■ ceo5■■■calvin mcl about earlier this morning >> we're excited about our busines3n china. pa times two plan to quadruple our international and china÷ñ playsa big part ofqthat and in the quarter, our!u■ busi kager, and that's with a lot of0

we saw at the endxdf the quarte a lot of deceleration. it surprised me howa5■w■c■ quico china came back,ç■ excited about the momentum in q1, and it plays a big part in our growth storyzo moving forward >> he didn't see any delay in the reopening, getting to the china consumer.e1ç and you were in vegas, >> i thought you were going to say, vegas is booming, too.ñ >> it is.e >> and there are lines and people are back. but ñ■clearly, the reopening of china, people are still very optimistic about, even though it hó3■tu■a little slow to comew3■ to fruition. chinese new year people saying, after the lunar new yei■ we really started to see sales growth pick up and lulu seeing more than 30% growth there (t&há■p &h]j%ekd8■he other partt morer internationnáe■p (t&há■p &hc% they're still pretty strong all over thex■ globe they only have 600-something stores theyr i thought the part of the citi qáu they said, it's cheaper than

nike they look at it!u■ as a value py zpz underperformed in recent months >> you can see right there, where they diverged, where the quarters appeared to be coming apart> i thinkñ■ that's a puhsá■tha■ their inventories still grew more than i■50%. that is higher than the industry average. it's come down from k■■■5% but hex■ hopes to get it to 32%. not ase of the others tend to be they don't have to do as many markdowns. they can put the extra inventory out e■there.ñ■ i think that's onex■ point, certainly, a negative point that

some are pointing to, that evaluated inventory. because they h!■e■'t been aggressive with x■promotions >> and also theçó■melding of whicp■x■■■something else they're going to point to that you can work out in our gear ande■ weart to the office. >> yeah, that helps. stick with xd■etail. the ubsnote wasi] interesting. bearish on the secto%■■■overall. five downgrades in thatñr■note this morning, takinge■q■ bath a body works to neutral, but ross, footlocker, urban outfitters, and burlington coat factory all to sell. they lower 17 price targets in total with sell calls all with 20% plus implied downsides so shoe world, q■l■though day do like nike, athletic makers, and skechers at some of the buyxd■calls. the bottom line it's a recession call it's that consumer spending is set to weaken and they think that the market has not priced and still considers it a bear v case, when ubs is saying, this is our base case,ñi■consumer spending is going to slow, and these are the weakest links.

>>kî9 ubs call or not, but there's a bit of a halo effect going on target down 2%, almost on the s&p. the s&p. even guk■i■it's a split we see this a lot in retail names, where you get a lot of names leading the winner board and the loser board on a day-to-day basis >> it's usuallyñi■ó■d■i■discret there, the target is a little bit of both. the bottom line is, a lot of people are watching these people are watching these consumerquenceú q=c most of the monthly data has looked okay, and watching things like credit card debt l■rising, delinquency rateñ■ rising,i■ bul of these, we're watching them, because they're still not back tof■ pre-pandemic levels fully ■ not at recession levels. but, of course, you watch the o■ trend. and the trend isj■ñ■ moving in a negative direction and that's a point of caution. >> also, tax xd■efunds,r b of, a tracking that. they're coming in a little bit light, not surprise ingly so, b

>> i always wonder how much of a stimulus or an impact those kind of one-time factors are. but maybe. >> yeah, one more thing to add into the pulz. coming up after the break, pending home sales down 21%q3■yr on yearfá and mortgage rates ba above 6.5. our next guest says thet(■housi im crisis, when he joins us next.

welcome back of housing

pending homes today rising, but down 21% from a year ago that's as these high mortgage rates continue to keep people out ofw■r what should we expect going into this spring season alan great to have you. i'm looking at theç■ç■ note,t■ continued deterioration in housing fundamentals this year into 2024.ç■ talk about whatñi■(■(■you expect >> sure. thanks for having me so the yeara5■ isñr■(■definitelt a better than expectñep■ start confluence ofñr■eventsq■ headin■ (t&há■p &hc% into early this year you had home builders becomeìá■% very aggressive on reducing prices, offering incentives to pull buyers back into the market place. a strong stock market, job mark's continuing to hold up well so generally speaking, the market has been off to at■ good

k■qiq"■áju■year.a5■ as we kind of look into the upcoming quñ8áuq)■, as youw■ get past the seasonally strongest time of year, we are a ■s)■■r■me correspond that what we'll start to see some weakness cree@ó■back into thew■ market. the■ bank turmoil thatok we're heari■ a lot aboutçó■now could potentially result in açó■(■sof■ economy, certainly the bond market is telling us that. and if unemployment were to rise, that's typically never a good thing forñ■ housing >> yeah. we're looking at some case-shiller numbers, the ones we got yesterday i guess 3% from june of last year,w3■roughly, off that top. i've seen some calls for as much asw■% peak-to-trough.i does that sound unrealistic tox■ you? >> it really depends on which metric you're looking at in the new-home market, we've seen prices correct a lot more than that. home builders have been not only reducing prices, but offering mortgage-rate buydowns, which effectively is a price rate reduction.÷zn8in certain marketn

the newr■sq prices pull back, high-double digits from the peak of last summer the re-sale market has been a little bit slower to adjust for a variety of reasons but ultimately, web■■■expñ■■ peak-to-trough price declines and that's from the peakqáu■!■ 2022, through the endt(■of 2024. so while the bulk of the price pressures probably have been felt in certaini#ñmarkets, there are declines that are probably going to persist =u year going? >> well, if you believe the bon■ markets, they're going lower z■ predicated on what the economy does either the bond market isfá rig and we're headed inv demand environment, in which case you probably do see some qn the bondi■ market's wrong and they're going to have to reconcile with what the fed is telling ñ■everybody, in which ce mortgage rates probably stay at or near current levels in the 6.5% range ultimately, if you look at a forward yield curve, weçó■expect mortgage rates to gradually creep lower, probably something

closer to 6% by the end ofr■á■i% year and maybe in the low 5% range next year. forec■u■e■ that's just basedx■ what the bond market ise1 telli us right now >> because isn't that the whole thing? isn't that the whole -- even applications last week, they picked up a little they're stillqsharply down from last qear, but just one big correlation with where mortgage rates go >> in the near-term, that's true i thinkw3■anytime you see rateì% pulling back 20, 30, 40 basis n/%■ts, it's generally pulling some people off the sidelines. the problem f■becomes, if rates■ meaningfully move lower in the face of a job mark and seen in priorlp downturns when unemployment rates are rising, before housing e1troughs even if rates were to move lower, if that's coming alongside significant e■epu■ájñ■ pain, whichñr■we really haven'to seen yet at least from a consumer perspective, butd if that were tot■ transpire, i'm n same positivefá impactp■■■that kind of perio■ofq■ decliningz■■■

rates. >> we've talked a÷ñ bit this morning about the geographic split. if you lookqa■ at some of the mr area housing price changes in the west versus the southi] and the southeast, i guess even in the mid-atlantic, to some just outward migration from fw3■ those states out west? what do you think is going on? >> well, it's a combination of things i think a lot of ñr■hose, the western marke less affordable coming into this downturn, whatever you want to call it. but certainly,c■ markets that he had significant price depreciation during the pandemic depreciation during the pandemic ar 9 thinking about a phoenix, a ç■ boise, idaho, pacific northwest, denver, colorado the price appreciation in those u■pretty significant and affordability was probably ar2■ady a bit stretched there, whereas the southeast historically has been viewed as more affordable and i think haso benefitted fromi] some inboun$■■ migration overx■qva■ the last s years. you could argue now whether those markets are still asf■ affordable as they once were

but, you know, i think that's affordability is the ultimate constraint onprice. so, as a nation, as a country jpác quite f■unaffordable we think that monthly payments would need to pull back about 20%ñi■in ord÷■to get back toñ■ ■ long-runaverage. that could come through a combination of lower fáprices, lower rates, higher incomes. but ultimately will take time. tt)o cotmy right now in terms of the outperforming, we see a pricing environment that's going to be pretty sluggish, you know, throughout most of the country through '24. >> right.c finally, the home builders themselves, as a group, are higher now than they were last e summer, when obviouslyb■■■mortge ujut lower is that because they've found their own efficiencies or labor is more available or lumberqisu■ down how do you explain > well, you know, it's interesting, the home building stocks tend to be a little bit of a beasti■ of their own. it's sometimes hard o■n make sense of what the stocks are doing relative to what the

fundamentals are there's something calledñ■ a seasonal trade wherex■ home building stocks tend to outbuild the market they're looking forward to stronger activity. i think that contributed to some of the strength we saw latew3■ót jvqp) whe ratesxd■p5m8q" back pretty shary the stocksç■ continued to do we■ in response to that. óá,i] you know, ultimately,fá if we're right and in the back half of this year were to show some seasonally adjusted pullback on price,i■ we think that the stoc probably are in for a fairlyq■ sluggish environment we're note1 overly negative on f■ they're prett■y%i1e■■v■valued >> interesting lots riding on the spring. i guess,/1%■ always, to your f point, t(■l. it's great toe1 see you. thanks for the help today. >> just on az■-■ñ■q■ related ree note, the offic■g■ reits, best-performing sub-sector right now in the market. they're up almost 3% keep in mind, they've been

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>> if your household, for example, onlyfá wanted tolp wat formula one -- >> my household, no, no. the only sport i want to watch others in my household want to watch othert(■sports and they he an interesting distribution as well they have espn and sky overseas■ does that hurt the media companies? itu talk about out of home viewing, it's seen as a different could getxd■nfl sunday ticket a likes of sports bars and

restaurants, i mean, it's really just shoring up another revenue stream for thex■ nfl the nfl has done such a good job sure they're monetizing every piece ofñ■ theirw■ business and really trying to expand the j■ business sov)t■think what's key herecis they're just going to make surec they are paid and they're reaching consumers in the new> way. i thinklp whatx■ will be intereg if we see the new partnership between the nfl and redbird start to really aggregate those rights and become the go-to distributor of all the sports ri'■e■c■ç■ we wantfá all the sports to airn our sports bar >> yeah, we've been talking about it for years how the nfl would play the splintering ofi]r media and it is happening. >> julia, thanks juliaqboorstin quick programming notej■ç■ this morning on apji■"■u■u■can join equity and opportunity events we're going to dig into more à.■ysñ■ to bridge the wealth ga

and discuss the stepsñi■ó■neede create a more sound economic evef you can register for the virtual event at cnbcevents.com or scan takes you straight there

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what is wall street buzzing about this5■■■morning? what qlse, ai. some of the biggest names in tech including elon musk, ove wozniak calling for a six-month pause on developing any morer applications citing, quote, risk to society they add such a pause cannot be enacted quickly governments should step in and institute a moratorium look, i pay attention to this because there's been a lot of hype and excitement from companies and inç■ the stock market but also a lot ofx■e■ warnings from very smart peoplen technology there's not going to be anytime soon.l it's interesting to hear some of the biggest names out there worried about how fast we're moving >> i think the words out of control are in there comewhere

we talked too■ jim aboutf■ it oe nine you can institute guardrails but it's hard given the momentumi■f■ from so many powerful players to just say stop forw3■six months that's going to be -- that's a tough call. withc■ nvidia up 82%e■ so fa this year. >> a lot of capital depending on it.ñ meantime, decent actionxd■ basically up to session highs. the down)■■■up 240 time for the judge bjw(uost 9.t■t■ carl, thank you very much. welcome to xd■the halftime report." i'm scott wapner i■e■eter a couple days' rest, tech is off carrying stocks through the first quarter. is that run really sustainablev■ or soon to reverse we debate with the investment committee. joining me for the hour today here at post 9, joe terranova,l■ jason snipe, jenny harrington and steve■k weiss. i' show you the markets. we're green across thef■ç■ boar youe1 probably k the nasdaq is the