good tuesday morning i'm sara eisen with carl quintanilla live from post 9 on the new york stock exchange. setting the agenda, mark smucker on the heels of a strong quarter as we heard from a number of the staples companies. higher prices driving sales increases while volumes are flat we'll get his take on the consumer and where prices go from here. jpmorgan is with us, running out of reasons to be on the sidelines as wall street debates what type of land, wall street is headed for. later, the return of meredith whitney, known for her

big call on the banking sector before the financial crisis. she is back with a new research firm and a new call on the housing market. a check on the markets we're in a familiar range just south of 4300. some pretty big calls out of the likes of goldman, and in the wake of what's a vacuum of ecodata and fed speak, at least today. >> not a lot of directional drivers but what is notable is the expansion of the rally last week and the previous weeks we've been bemoaning, it's big cap tech i'm looking at the russell 2000 of small caps, up 2% banks, industrials and materials are what's leading the rally these are the cyclical stocks left behind. everyone figured it was just big tech and finally big tech is going to stay and everyone is going to go down what's happening is the opposite and the soft landing

story/narrative is what's dominating right now, which is we keep pushing out the recession call and maybe the fed's going to pause here and regional banks are looking better than thought. >> kre above the 50-day for the third straight day that's a six-week high you have the vix zeroing in on 14 cramer suggested it might go to 12 in the past couple of days. so, some things are definitely working in the bulls' farvor. >> the they're not necessarily done if they pause in june, they might go in july look what australia did overnight, they raised interest rates surprisingly the aussie dollar is higher. canada goes tomorrow they are often previews of what the fed does, and if the market is okay. the market is now priced for another rate hike in july. if it's okay with that view and we're not going to get a terminal rate closer to 6%, perhaps the fed can get away with not sinking us into a

harder landing, a recession. >> find out next week. when it comes to market sentiment, look at what a difference a day makes yesterday we had morgan stanley's mike wilson forecasting that meaningful. ubs predicted the rally likely to be unsustained. goldman cutting their recession probability back to 25%. bmo raising it phil camporeli there is a market going on right now. >> yeah. and, carl, we're talking to clients about the market and the economy clearing hurdles what do i mean by that this is the first time, i'm so excited to be here today because this is the first time i can talk to you about, we don't think the fed is going to move this meeting sara, i think you're right, it's not over yet but at least in june, the probability is pretty low. i think they are going to pause. we're not going to misinterpret that as a dovish pivot

they don't want easing priced in but the fed is probably not moving this meeting. the second hurdle, like the last 90 times, we raised debt ceiling. clients are worried about that and sitting on the sideline. the third piece you mentioned, carl, regional banks saw a great chart this morning fed expanded their chart for the regional bank calls. that balance sheet has been completely back to where it was pre-march. banks aren't tapping into these emergency facilities and the point about -- vix at 14, that's a really hard market to be underweight. now, what makes it tricky is mutual fund and etf lows this year, $700 billion into money markets. $58 billion out of equity. so, that creates really, i think, an opportunity cost well-diversified balanced portfolio. i'm not talking about the nasdaq or s&p balanced portfolio is up 4%.

the t-bill you're getting 5. we've gotten that return in the first part of the year what makes it tricky is we're above the fed's target on inflation. we can't get too euphoric. it's not an overweight to stocks but it's hard to be underweight. >> but there's a big dovish argument going on that base effects will give us maybe 4 handle, 3 handle, 2 handle >> the mother of all base sfekts coming, which is june of last year when inflation was at the year-over-year high. that month inflation went up by 1.2% that's going to be hard to repeat coming this summer, we'll be low 3s on year-over-year cpi that's still fak from victory. there's no fed that wants to be remembered like arthur burns was, letting this reaccelerate. >> but you're underweight stocks >> neutral stocks. >> but you have been underweight, haven't you >> we brought that to neutral at the beginning of this year basically because we believe the

fed's terminal rate was within sight, 5, 5.5% neutral there. fixed income is a nice hedge if we're wrong about our soft landing narrative, i think fixed income can perform i can't stress enough how many people are in cash thinking that's a 5% risk-free rate technically that's true. the opportunity cost is rising when you clear those hurdles that we spoke about earlier. >> i saw the yen in there. is japan the most exciting story going on right now given what the consumer there would have to do to keep pace with a new inflation picture. >> yeah. carl, i think this is the first time we can talk about, i don't know, since i've been alive, about japan having some sort of inflationary backdrop. i think that creates an exciting opportunity for non-u.s. investing which has been so maligned over the past decade. europe the same thing. european central bank is in positive territory i haven't been able to talk to clients about a positive policy rate in europe since 2011. all of this stuff, i think, is

an exciting backdrop. >> what would it take you to get overweight stocks. sounds exciting now. >> i'm always excited. it's kind of this story of inflation really going back to that 2% target, sara without a growth consequence and we're not as euphoric to say that we still have below trend growth in the u.s we're not expecting earnings to pick up. again, the story of the soft landing, which is inflation, disinflation continuing to recur and allowing the fed to be on hold is really important but do not price in an ease. we are not pricing in an ease any time this year >> are you surprised at the potential for policy mistakes we've not gotten one, whether that's debt ceiling, fed so far, ecb, i mean, it seems like we might have tripped in another universe at this point >> i was comparing the u.s. economy to the miami heat. every time you think they're going to lose, they win, right and the unemployment rate would

be jimmy butler. i think it goes back to the labor market, carl for us that's been an important signal that you've gotten wage inflation to move lower without a meaningful jump in the unemployment rate, which is a real sweet spot. so without that, without there being a real correction in the labor market, no policy are in sight. >> it is really the cure that addresses all ills, that's for sure phil, thanks great to see you let's get to the stock story of the morning and that is coin, tanking as the s.e.c. announces they are suing the company, alleging it's operating as an unregistered exchange and broker kristina partsinevelos has been watching that all morning long. >> the s.e.c. is aus coulding them of operating since 2019 without registering with the regulator and alleging 13 crypto assets were considered securities by the regulator.

with the s.e.c. chair just an hour ago calling the targeted crypto platforms a web of deception. >> this is a field that's built, the whole business model is built on noncompliance with the u.s. securities laws we're asking them to come into compliance they're going a bit of catch us if you can >> coinbase's legal officer did provide a statement saying, quote, the s.e.c.'s reliance on enforcement-only approach in the absence of clear rules for the digital asset industry is hurting america's economic competitiveness. he also went on to say they plan to operate business as usual even though today the alabama securities commission is giving coinbase now 28 days to show cause why they should not be directed to shut down from selling such unregistered securities in the state, which is targeted more specifically at coin-staking business. this coin lawsuit comes literally 24 hours after the s.e.c. sued binance and co-founder, also accusing them of running an unregistered platform in the u.s. and commingling, which is misusing

customer funds, and sending them to another trading firm owned by binance's co-founder, cz, without telling the customers. according to the s.e.c.'s chair, he did say in that statement -- or his interview an hour ago, we don't need more digital currencies we already have the u.s. dollar and the japanese yen you can see shares of coinbase down double digits and it's having an affect on the entire crypto space. >> coinbase down only 12.5%. what are analysts saying about the revenue impacts of the specific enforcement actions and what that might mean for coinbase's business? >> that could be part of the reason why you're seeing -- it coming off the lows is coinbase is more exposed to bitcoin and ether. those two cryptocurrencies are not what was listed in the s.e.c. filing. that could be seen as a positive mizuho said it could be impacted back in february, coinbase argued you shouldn't compare, but kraken was another crypto

exchange that got sued by the s.e.c., agreed to shut down and pay $30 million in fines clearly, this is going to be an ongoing problem between the s.e.c. and coinbase, which will result in a lot of litigation. that's going to be a cost to coinbase and its margins >> absolutely. kristina, thank you. kristina partsinevelos after the break, an earnings beat for jm smucker. price hike the ceo joins us next. mccormack upgrade at b of a. they go from 75 to 100 saying the cost outlook, the margin trajectory even more reasons to get constructive as the russell now at a three-month high. "squawk on the street" cties tethisonnu at morgan stanley, old school hard work meets bold new thinking. ♪♪ partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation.

because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

welcome back we mentioned the kre, six-week high expected to close above the 50-day moving average for the third consecutive day. obviously, sara, year-to-date losses have been serious put together what they are saying about banking stress, fed emergency lending, there's still commercial real estate worries out there, but this is not anywhere near where we thought we would be last march. >> could have been a lot worse still down 25% year to date. it's having a good june, the kre, but down march, april, may. yes, showing some signs of stability, absolutely important for the fed and the outlook. let's check in on the state of

the consumer jm smucker in the red despite beating expectations for the quarter. the company driven primarily by price increases. joining us on a first on cnbc interview, jm smucker ceo. >> thanks for having me. >> what's driving the strength that you're seeing in pricing and overall growth. >> first of all, we've done an outstanding job of executing our strategy we reshaped our portfolio, made a few divestitures and focus on brands crustables, and that has allowed us to beat expectations for 13 consecutive quarters. we see that momentum continuing. >> what about this dynamic between higher prices and flat volumes. how much longer can you squeeze out the double digit price in growth without the consumer just

rejecting it >> we're actually -- have been able to prudently pass along pricing. we manage our costs very, you know, tightly within our four walls. and we are starting to see volume growth. dunkin, a premium coffee brand, has now returned to volume growth obviously, uncrustables is a little rocket ship we continue to ride. of course, jif coming off our recovery from recall is also showing nice growth. we actually see the trend both in sales and volume improving as we move forward. >> so, where do prices go from here can they kee >> we view we are inflational environment but it looks to be stabilization. our relationships with our retail customers are strong. as we've had to pass along some

of those costs, we've done so in a very careful and prudent way, only what's justified. and our consumer has been incredibly resilient these categories are great we offer brands across the entire value spectrum. we've seen consumers continue to purchase our products across each of our categories, whether that's folgeres, our fruit spreads, milk bone, all has shown a nice performance. >> on this inflation conversation, we're in that period where the new "the new y times" is putting out front page stories about greedflation and margin inflation and producer pressure i get how that's great for equities and stock performance, but do corporations need to rationalize their pricing power, especially when you're up 11 >> again, i think if you look at our categories, we participate

in coffee, food and pet snacks and cat food, which are all incredibly resilient we -- our focus is making sure that we provide our consumers with the full range of -- from value to premium and that has served us very well so, you have consumers that may be looking for more value. we've got products that meet their need and our brands are still remain in very high demand >> i was going to ask sort of where you fit along the spectrum, if you're doing well, is that a recessionary trend obviously, staples are defensive as a group, but we've also seen consumers during recessions trade down away from the big brands into the more generic products >> sure. if you look at those categories you just had on the screen, sara, our categories, again, are growing. they have a relatively low incidents of private labor brand. that's why we continue to succeed because we, again, are providing the consumer with

value products as well as premium products so our consumers have the options to choose the products which best fit their value needs. >> i know you pointed out strength and at-home coffee. we looked at some of the brands just now do you think that reverts at all, if in fact, return to office gets more legs among employers especially come this fall >> yeah, our folgers brand has actually outperformed the last five quarters. and our away from home coffee business continues to be incredibly resilient as well we haven't seen the office piece as resilient if you look across travel and many other sectors in away from home coffee, our business is strong and growing in those areas as well. >> what's also strong and growing is pet food. we've seen this across -- we saw a good quarter from chewy and petco, mark.

20% growth in milk bone. what's happening with dog snacks >> well, dog snacks are discretionary but keep in mind, again, even within the milk bone brand, we offer our mainstream biscuits, which are very affordable and we've offered a number of premium options which involve dipped biscuits, stacked biscuits, long-lasting chews, dental chews so, playing across that entire value spectrum allows us to meet the needs for consumers who quite often treat their pets better than their own children. >> is that why the pet food category has been so strong? everyone thought after covid we would all leave our homes and pets wouldn't get as much attention and love and spending. >> they're still getting some love, there's no question. >> clearly mark, thank you for joining us it's good to talk to you. >> thank you so much for having me >> mark smucker of jm smucker. >> pet snacks are no discretionary. >> they're a staple as a pet owner. your dog gets a lot of snacks?

one of the world's large venture firms now breaking up into three separate businesses given some of the ongoing geopolitical tensions around the world. plus, video game retailer gamestop set to report q1 results tomorrow however, investors respond it's likely to pail in comparison to the scene two years ago when activist investor ryan cohen took over as the chairman "making of the meme king" tonight at 10:00 p.m. only on cnbc. >> ryan became chairman of gamestop june of 2021 not surprisingly, the reaction was extremely positive >> in-person meeting we tried to get the news out that ryan would not be there we had individuals coming in bass boats and were drinking at 8:00 in the morning, waiting to get into our shareholder meeting.

it was something i won't forget. we would typically have two to three shareholders show up at the meeting before i believe that our attendance was over 400 that day. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. you founded your kayak company because you love the ocean- not spreadsheets.

you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're

sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. - psst! susan! with paycom, employees do their own payroll. - what's paycom? a magic payroll genie? - it's a payroll app. - payroll is way too complicated for the average person. - paycom guides them through it. missing or duplicate punches, pending expenses, unapproved pto, on and on. - why would employees wanna do all that? - this could be a stretch, but i think it's 'cause they wanna get paid correctly. i like getting paid correctly.

venture power house sequoia breaking up into three separate companies. >> this is big news. it's the end of an era for one of the most prestigious vc firms becoming three distinct brands sequoia china becomes hongshan. i spoke with the chief this morning as the news came out he told me it took months to arrive at this decision and

ultimately it came down to business factors the different markets becoming more complicated he said, and i'll quote, founders have global ambitions we are seeing more instances of portfolio conflicts and brand confusion. it comes on the back, though, guys of a very rough first year for botha leading the firm as he saw billions in devalued estimates and marked by rising geopolitical tensions and rising questions over their stake in big chinese companies like bytedance. he was an architect of the evergreen sequoia funds that holds onto stocks. holding on for longer. that also had terrible timing when it came out at the end of 2021 when markets were turning he also made that big bet on twitter. perhaps one quote, guys, sums it all up you can read into it a few different ways it quoted partner singh who will

lead india and southeast asia business he says, we love sequoia but our brand is our relationship. sequoia might no longer be the gold brand in venture capital because the industry is becoming bigger and more international. they say most chinese can't even spell sequoia so maybe it had become too big or the business venture capital had become too big. >> still they are known for having been playing in china a lot longer than most, right? they have a wealth of experience on that front. >> yeah, i think it was back in 2005 bytedance may be the most famous investment it's in other companies that have blown up in terms of valuation like a shein, a fast retailer, and financial. we know what happened there turned into ant group and the ipo was completely botched by

the chinese authorities. that's also an indication. sequoia makes very early bets. some of the turmoil that comes later doesn't typically affect their investments. going back to ant financial or ant group, that was a good indication of how geopolitics can get in the way chinese regulation prevented that company from going public there's still that question of bytedance and what's going to happen it's interesting, though, guys because the chinese business was already an affiliate, so it was pretty separate. this is taking this another step and some questions over why they had to do it with india and southeast asia as well again, as i said, botha citing business factor less than the geopolitics of it. >> you have to wonder, others have to be watching this and wondering how to prepare for worsening texts between the u.s. and china, including potential orders on u.s. companies about investments in key sectors in china. we've been expecting this executive order on this front. i know they're not emphasizing

geopolitics but clearly it's front and center >> and sa they have a major business in china. i immediately thought of a softbank which has portfolio investments all over the world it's in bytedance as well as a number of other u.s. hedge funds and particular venture capitalists. it does raise questions, what are they going to do do they have to think of something similar? it's a question going forward as geopolitical becomes a bigger factor. >> are they going to get criticized for investing in chinese companies or semiconductors something you have to imagine gets complicated thank you, deirdre bosa. after the break, meredith whitney, known for predicting the financial crisis in 2008 she joins us at post 9. june is pride month and cnbc is celebrating all month long on sharing stories of corporate leaders with you this is grindr ceo george

harrison >> we know that there's so much attack and hate in the community happening from lots of places in that context, grindr going public in november, i think, speaks to a lot of positive things the week we celebrated on wall street when we went public and the support we've gotten since going public is fantastic. here's a company built by gay people for gay people where, you know, the ceo is gay, married and with children. grindr's board has nine members in title, six of whom are gay, lesbian, trans, and to have a board like that, i think, is a really powerful testament.

welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. the wall of a major dam in southern ukraine collapsed today threatening hundreds of thousands of nearby residents and endangering europe's largest nuclear power plant. russia and ukraine are blaming one another for the destruction. nbc news has not verified the claims of either side. the vatican says pope

francis briefly went back to rome's main hospital today for tests and is already back home just two months ago the 86-year-old was hospitalized there for three days with bronchitis and former new jersey governor chris christie is expected to announce his bid for the 2024 republican presidential nomination in a town hall event tonight in new hampshire comes just one day before former vice president mike pence is set to make his formal announcement of a presidential bid. former president donald trump currently leads the polls in the field, which now stands at about nine for the gop nomination, sara back to you. >> bertha, thank you bertha coombs. mixed picture on wall street, prevalent in europe as well as we head to the close a split session coming to a close. health care leading the gains with oil and gas stocks the losers in the session. several inflationary headlines in europe. we have german factory orders down for a second straight month. then in the uk, consumer

spending slowing again thanks to high food prices the story abroad is down under, australia raising rates by another 25 basis points with the benchmark rate up to 4.1%. that's the highest it's been in a while. it was a big surprise, only 10 out of 30 economists polled expected a rate hike, which just shows we're kind of in this territory now where it's a tough judgment call for central banks to raise rates we're seeing a decline moderating of those high inflation rates but they're still higher than where central banks want them to be. australia, remember, took a pause back in april and then started hiking in may, hike in june now there's built-in hike probabilities in july. the aussie dollar is a lot higher we wonder what the fed's going to do now with june priced at pause and july priced at hike. it's all about the message. >> i know -- canada, as well >> canada tomorrow. >> what's your guess >> they could raise rates.

they have taken a pause and are speaking more hawkishly because inflation -- it is moderating and showing signs in volatility that it's strengthening. consumer spending is good there. housing market is good. >> building permits were down 18 we're definitely in that period where the turn is difficult to call because there's a bunch of -- you mentioned food prices. that's a huge swing factor in europe. >> europeans are talking tougher on inflation so, we might see the fed, if they take a pause, go in a different directions then we wonder who's right are they right to be cautious with the trends clearly moderating inflation and not to destroy the economies or are the others it's an interesting day. i think what will be key in the fed meeting is whether powell has to make a compromise with some of the hawks, who clearly want to keep raising rates therefore, if we do get a pause, it's a very hawkish message. like we might still go on. >> not a full dissent. >> he's a good consensus builder. there might be dissents but

compromise on the language. >> they're in quiet period so the fed speak is down. we'll get an inflation report on the first day of the fed meeting and then a fed announcement. our next guest says there's very little risk of housing downturn in the next five years with housing prices declining 2% to 3% in that period that's not good news for younger generations trying to buy. the average home buyer age has risen from 39 to 36. joining us is meredith whitney she's relaunching her advisory firm after being one of the first analyst to predict the great financial crisis welcome back >> thank you so much for having me. >> why are you getting back into the business, first, just a personal question first? >> personal question is why i left the business is because it was just not interesting to me anymore. there was so much government involvement, be it from government, qe, capitalized very

weak balance sheets, you know, untethered fiscal spending i just didn't want to be the analyst that reported on quarterly earnings and a maintenance analyst. i was like -- it was like watching paint dry things started to change about 18 months ago. i don't think i missed anything in ten years that's a big statement because there have been trading action with the banks but not a lot of big moves. i love to dig my teeth into big, secular themes i think you're starting to see them now now it's really fun and i can't stop writing this is exactly what i should be doing when i'm this excited. >> and it's going beyond the banks. for instance, you looked at housing. >> i always take a wide berth because my single biggest interest is the consumer the foundation of the consumer is housing that's the largest asset for most consumers when i left i thought housing prices would overshoot on the downside, which they did right

around 2012. and now they have risen, but what's really interesting is, 2012 you saw he can quit in homes. today you see the highest e equities in homes since 1990 and before a different way to look at it, the average ltv on a home in the u.s. is 30%. you haven't seen that in well over 30 years. so why i say there's no risk for an immediate downturn is because there's no forced selling. forced selling is going to cause the big gap between big ask and i think what you're going to see is when you start to see a turn, you start to see homeowners tap into their home equity you have not seen that at all. people are sitting on big piggy banks, and they are not sweating it so -- and that's older generations. important to differentiate i think you have to divide the millennial generation into two

parts. so, those over, let's say, 40 and those under 40 maybe 38 being the cutting point just because i'm a stickler. and you see a disproportional amount of 38 and older being homeowners those who have benefitted from over $20 trillion in equity created in their homes in the last ten years that's a staggering amount and then those who don't own homes. homes have been for savings. it's been the best saving vehicle. it hasn't been a wealth creator historically it has been in the last ten years. but historically it hasn't been. they can't enter into the housing market they don't have savings. they probably can't afford mortgage payments. what happens then is they're shut out of the mortgage market. importantly, you see the lowest household formation in 150 years. people are getting -- waiting longer to get married. you mentioned the average home buyer went from 32 to 36, 38

it's getting older and older pay attention to, let's say, four years out, when boomers and millenials, particularly boomers, want to downsize. there's going to be lower demand and a higher supply. today there's a greater demand and lower supply that's going to invert and i think that's when you see a bigger bid/ask spread. the gen zers and lower millenials won't be in a position short of a major, major change in regulation to go out and do that. >> wouldn't a dramatic increase in unemployment force people to list if they had to change jobs in a different city, get more mobile, or is that -- even that, you think, would keep listings suppressed >> i think they could rent there's not -- again, there's not much in terms of the rental inventory either there are other options. of course, they could tap into

their home equity. if i keep looking at, like - >> waiting for the offers to come in? >> no, waiting for home equity to be tapped you just don't see that. so, the numbers come out thu thursday obviously, i'll be watching it that's a big deal. i think the other factor here is employment and 40% of employees are working remote or hybrid and it's anecdotal, like the w-9s can't support -- i can't get the information from the treasury, but there's enough anecdotally information to support that many of that 40% are working multiple jobs. i wrote a report titled "millenials are serving avocado toast and drinking french pressed coffee." i try to figure out where i'm wrong. if i look at spending, everyone is worried about retail spending being down you don't have new home buyers so there's no reason to buy new

home furniture people bought enough patio furniture and there might be buyer delays people are still spending on travel and leisure i'm not worried about a big downturn in the economy and housing. >> before you go, we have to ask you, since we haven't talked to you since the regional bank crisis, you think the regional banks are going to be okay >> i think that -- i'm hopeful, i live in d.c., so i'm hoping to help, that the regional banks get the assistance they need i think they're one-offs i think there were unforced errors in the banks that -- the three banks that were -- went down or rescued. i think there is -- it's high time for m&a in the regional banking sector that's a good thing. >> we miss your calls. it's good to have you back. >> thank you so much >> it will be fun to have you back. >> yeah, we're going to cover your calls back here on "squawk on the street. meredith whitney. new reports showing in half

of u.s. major cities, apartment rental prices are lower year over year. the fed is keeping a close eye on housing prices as a big factor when calculating inflation. we'll talk to the ceo of equity residential, one of thbiese ggt apartment reit companies in the u.s. when we come back

welcome back reit week taking place with ceos from dozens of reits gathering in new york. diana olick is with a major

player in apartments hi, diana. >> hey, carl, that's correct mark, thanks for joining us. you hook the helm of equity residential in 2019 but this is your first time on our air welcome. rents are easing vacancies are rising apartments were the darling of the pandemic, not so much anymore. what do you see in the future now? >> yeah, i see two different things happening certainly the fed raising rates just changed the cost of capital and lowered our stock price, i'd argue, disproportionally all ceos say that, right on the operations side, operations continue to be good we raised our guidance last we week we're 96% occupied we raised the dividend 6%. housing is expensive and undersupplied. there's not enough housing in the u.s., so guys like us that own 80,000 well located apartments, we're still in a pretty good spot again, the momentum is still very good in the rental business, by and large. >> and you're in a good market

so that's a plus on the coast, et cetera. we're also going to see record supply of apartments come on this year. how is that going to affect your pricing? >> and that's just a great point. so, our markets, very quickly, boston metro, d.c. metro, northern cal, southern cal we have 5% in the sun belt we see sun belt pressure occupancies declining. can't move rents up. on the coasts, there's not much supply rents move up, slower than last year but they continue to move up in new york we're 96% occupied the impact is for sure but mainly in places we're not located. >> let's talk about both development and buying and selling the real estate properties you talked about valuations, obviously, with interest rates rising, we're seeing whether it's well performing real estate assets or poo areally performing like office. you are still seeing valuations come down across the board how does that impact your ability to buy, sell, development? >> real estate companies, reits, particularly, are creatures of

the capital markets. the fact that capital is more expensive, means it's harder to purchase things but prices have adjusted prevailing cap rates, your noi divided by the value of the real estate, those have gone up significantly. they were around 3.5% when treasury rates were 1 or 2 now treasury rates are 3.7, approaching 4, cap rates are in the 5s everything has adjusted but public real estate, particularly ours, is overadjusted. the value of our company is down 30% to 35% from peak yet the value of the underlying value of the real estate is only down 12% there's a disconnect there the street fears additional rate increases, looks at apartments and has the supply picture but folks like us that aren't in those sun belt markets are at an advantage right now. that's what we're talking about at this event. >> let's talk about the sun belt markets. you are still seeing migration to the south that's where real estate is strongest. it's also where we're seeing a huge boom in investment in

single family rental properties, the builders are building single family rentals you are vertical they are horizontal. how is that competition eating into you, like in a place in atlanta where you're growing >> we serve an affluent renter base before the pandemic we saw pand moving to atlanta, dallas, austin and we started to buy there. the pandemic interrupted that. when we compete it is mostly against other apartment owners because we're in the closer suburbs and urban floor and you see a lot of single family for rent further out you go. this year, last quarter, only 8% moved out to buy a home, near the lowest it's ever been. we aren't subject to the same risk our big competition is all about our apartments built near us. >> not a lot of concern about home ownership this competition because you see high interest rates. if we see rates come down and home prices are starting to ease

a bit, maybe more supply comes on the market you're not concerned about that >> it's been such a back and forth because home prices started to go down and then stabilize recently and there's historically high. so when you think about affordability like san francisco or new york, it would take a while for house prices to decline and interest rates to decline at the same time that under supply of housing is significant. one other point i want to make that's subtle and useful to the audience, folks have low interest rates on their existing single-family homes and they're going to be less likely to sell. even if you've had the third kid and boy, that three bedroom feels tight and you would like another you're going to be hesitant to get a mortgage that's double your rate or so. we're in a good spot in the rental area to keep the millennials longer, pick up gen-z renters and kind of continue to run the business pretty well and good demand. >> i want to talk about california you're heavily into that market.

it's seen a lot of distress in office and hotel, et cetera. the mansion tax, we've talked about, people think it's only for single-family homes but it affects you as well. tell us how that's hitting you >> the mansion tax in l.a. county 5% or so tax on transfer it affects all real estate above a relatively low threshold it's going to slow down the amount of transactions people won't sell. it's not going to serve the purpose they want funding some large affordable housing fund. i think there needs to be more dialog regulatory risk in general in california it is significant but manageable we've been working through that. you talk to policymakers and you talk about how rent control doesn't work you talk about more housing supply, talk about in new york, it was a really successful public-private partnership program. we're having good conversations with policy milwaukeers against ideas like the mansion tax that don't do any real good, and that slow down growth

in california residential, we're doing pretty well. we're in 95.5% occupied in san francisco, and that's one of our lower occupied markets. >> okay. great, mark parrell, ceo of equity residential, great to have you on for the first time back to you guys. >> thanks for that diana he olick we told you that lulu will be merging with the pga tour faber is back with n yotet heard sound from that interview. stay with us ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ sfx: [police sirens] due at target in 5! copy that. make a hard left down the alley.

sfx: [tires screeching] sfx: [police sirens wailing] network's got you covered. please confirm requesting back-up. changing route. go. roadblock ahead. ...back up, back up... reverse! reverse! sfx: [police sirens] next level moments. we're 30 seconds out. need the next level network. north corridor, hurry! coming through! or 3, let's go. the network more businesses choose. transplant received. at&t business. ♪ ♪ every day, businesses everywhere are asking. is it possible? with comcast business...it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic across all of our locations? yeah! absolutely. with global secure networking from comcast business. it's not just possible. it's happening.

faber told you pga tour merging with liv golf in the shocking development for the sports world david is back with the two principals in the deal and sound we haven't heard yet. >> yeah. we're going to have the longer interview, at least parts we didn't air, earlier available on cnbc.com we'll let everybody know as soon as that's up but, you know, certainly so many shocking things around this and work to be done as the two principals made clear in the interview we conducted many wonder is saudi money going to take over golf and what does that mean and how should that be or how is that going to be received by the fan base and the players? here's a response from both jay monahan who runs the pga and yasir al rumayyan who runs the pif which is making a large investment, along with contributing liv into this combined entity. >> what are your expectations,

jay, for when the public learns about this, the players and fans do you think they're going to respond positively you're describing a scenario under which pif at some point could have the majority of the economics, correct me if i'm wrong, of this entity essentially the saudis control golf around the world? i'm curious what you think the response will be >> listen, a lot of people have been reading about the tension and that we've talked a lot, and i said previously, that we were going down our path, they were going down theirs. and today, that tension goes away the litigation is dropped. we're announcing to the world that, on behalf of this game, we're coming together, and it's less about how people respond today, and it's all about how people respond in ten years. >> yasir, what are your expectations in terms of the public response to this, saudi arabia comes in for criticism, for example, from people who are

advocates for human rights and things of that nature and sure to get mixed up in that the saudis now control, again, i understand governance, but that's going to be the headline, control the game we love >> we are investing in the game that everybody loves the control is not there it's the governance that we would like to have it's going to be, you know, a board system and a board and a majority and the board will be with the pga it's not going to be with us i think -- and i heard this many times in different, you know, investments -- >> i'm sure. comes up a lot, yeah. >> like what we've done in new castle, we had the same thing. but if you look around the turnaround story we made, it was really a case study by itself and less than one and a half year we turned a team that was

threatened to relegation up to the fourth position in the premier league the same thing we will do with our new company between the pga and ours. >> simply that you know what, capital that worked -- capital that we are providing along with what the combination will bring is going to make the players and the fans very happy. you know, there have been questions about players who stayed on principle of the pga, didn't take the bigger money from liv my understanding is that, at least i'm being told, that, you know, there's going to be a fair and balanced process to reapply to the pga at the liv but doesn't mean you're going to be automatically merit based process and that most of the players at least are positive. we'll see. >> a lot more wood it chop -- t

chop on this one. >> it caught people by surprise and they're going to get criticism on the geopolitical front. >> it's one of the strange stories that hits the business world, sports world and your point the world of international relations, yeah. >> no lack of hot takes in the next 48 hours. david, thanks. judge out west day two let's get to the half. >> carl, thank you very much welcome to the half time report coming from one market in san francisco. it's great to be here. front and center, apple, the day after shares sliding following monday's worldwide developerings conference a downgrade for the stock. the analyst who did that in a moment we'll debate the road for apple, tech and the markets and joining me today, brenda, josh, stephanie, rob take you to the markets show you what we're doing we're giving a little back that's clear you can see s&p is higher by a smidge dow is lower