idle when they reactivate one of those, the stock will go higher. >> meta, you're seeing the biggest downloads of any app what leads to advertising dollars. >> "the exchange" starts right now. ♪ ♪ thanks, frank. i'm in for kelly evans today it was the slowest month for job creation since december of 2020. we all remember what was going on in december of 2020 but that may still not be slow enough for the fed to stop raising rates. we'll tell you why and the key dato points we will be watching. and our market guest says stocks bottomed last october, so keep buying the dips and keep buying tech but only a certain kind of tech. she joins us with what makes her

so bullish and the names she's buying and black knight out with a new report on the housing market we're getting a preview today. if you were thinking about buying a home any time soon, stick around for it. we begin today with the markets. and dom chu was at his position early today with the numbers >> i was you saw me standing right there, scrutinizing everything that rick was talking about but we thought with the jobs number out there this morning that we might see a little volatility that's what we have seen it hasn't been massive, but good enough to push stocks toward session highs on what some are characterizing as more of a goldilocks number. the dow up about 90 points, north of a half percent for the s&p 500, which sits at 4437, up 25 points. this represents the session high for stocks so call it up 25 at the highs of the session, down roughly 13 at the lows that's been the range today. about three quarters of 1%

gained for the nasdaq, which sits at 13,790 interest rates a big part of that story and a bigmac row day when it comes to jobs, the most important economic indicator we are seeing a move somewhat interesting, converging on certain points of the market the ten-year yield is drifting slightly higher, 4.05% to 4.93% for the two-year note yield. that difference between the two of them, the inversion sits at just around minus or negative 0.88%, or 88 basis points. in the last few days, we saw a low of north of 1% to the downside, minus 110 basis points at one point so watch that treasury spread, that yield curve dynamic play out right now. and then the stock of the day right now, not in the s&p 500, but it's in a red hot space. that's electric vehicles it's not tessly, but rivan, up

18% today. during that span, we have seen the stock go up by roughly 80 plus percent, adding $11 billion to its market value on some more bullishness with regard to its ev deliveries. and i'll leave you with this red bush is upping their target to $30 a share they think there's an inflection point for this stock that's one of the proximate causes for today still, a lot of momentum we'll see if it can stay that way. a lot of times you don't see stocks sustain that momentum for this long. back over to you >> dom, so fascinating with the market today that goldilocks jobs number, but not every investor is seeing it as their cup of porage today so let's dig into that deeper. steve liesman is here to break down the report with his headlines from the interview with the chicago fed president i saw you this morning on "squawk box. what is your takeaway now that

the dust has settled a little? >> i think it's a pretty good report, but i want to start with what austan goolsbee said you said goldilocks. i want to replace that with golden path. he made his comments, and unlike some of his colleagues, the chicago fed president didn't sound disappointed where the economy and inflation numbers are. he sounded pretty content. >> the fed's overriding goal right now is to get inflation down we are going to succeed at it. and to do that without a recession will be a triumph. and that's the golden path, and i feel like we are on that golden path. >> on rates, he said he was undecided what the fed should do in july, like others who have supported a hike he said one or two hikes would not take the economy off of that golden path, so aligning himself that way on jobs, he was pleased that payroll growth was slowing and higher wagers were not leading

inflation. here's the numbers april and may revised down unemployment rate is still low, 3.6% and there's the average hourly earnings, a tenth higher than expected so that year over year rate unchanged. one way to make more sense is to look at the three-months averages jobs have declined to 244,000. the fed have been less satisfied with the economy they think the fed ought to hike again and should have hiked already. inflation report is next week. >> steve, i want to ask you about this you've got the goldilocks number, the golden path, whatever metaphor, but markets don't seem to be embracing that. people are saying that's because

of the wage picture that was in the jobs report today. >> i think that's right. >> do you have an explanation or insight into why we can see jobs softening but wages still pretty good >> a couple of things. i want to make one note about what dom was saying. the ten-year yield is lower than it was after the jobs number, up a little bit but it still embraced that spike that it had. if you go back two days, go a little tighter on that chart oh, you're so good how good are they in the back there? you see that pop from the adp number it looks like el cappitan. most of that has remained there. so i think you have some residual pressure inside with people trying to get people to come back into the workforce we need bodies in this country and you want to go back to washington and do some more

reporting on that immigration story, because we don't have the people in this country, at least not on a legal basis, to fill the jobs for the growth that we have morgan stanley did a piece this week and said compared to the level of gdp using something they called oakens law, we're 300,000 jobs short of where we should be for the level of gdp where we have. >> because we don't have the people >> and businesses are doing more with less, which tells me another part of this story we will have to watch and report is there may be more productivity in this economy than we give credit for >> steve liesman -- >> look, you bring people to work you have work to do. if those people are providing profit to your business, you bring them in. my next guest almost nailed the jobs number. while today's number came in below the 240,000 estimate, she said a july rate hike is all but a done deal. here to explain that is the

chief economist at kpn diane, you were off by 9,000, pretty close what made you think we were coming in light today? >> well, we have seen a bit of a slowdown out there the adp is not a good forecaster of what's going on in the national economy i do think it's important to look at what's going on in some of what have been the drivers of gains. of the biggest drivers has been professional services. that had over 1.5 million more than february 2020 levels, now significantly higher than that that is one of nose sectors that saw a huge hiring spree, and has now cooled off we're seeing those larger firms, which was in the adp report. smaller firms are picking up the slack. i think that's what you are seeing come out in the numbers, as well. job openings are still far

outstripping the number of workers we have. i agree with steve, we're still short on workers that's one of the reasons why wages have not cooled even more. >> when i got a 97 on an exam, my dad asked me why i missed by three, so i'm not going to ask you why you were off by nine but just to be clear -- >> it's luck, steve. and you know it. >> i think it's some good forecasting. you've been doing this for quite a while. i went back and did a deep dive on the adp versus dos. one big area they missed, and i noticed this immediately, travel and leisure. leisure and hospitality. adp put in 200,000 plus, the government at 21,000 which one do you believe more? >> i believe it's somewhere in between, because we know this is a month that the seasonals are -- we're supposed to will

hiring i happened to be at o'hare on july 1st at 5:45 a.m it was brutal. it was as packed as i've seen it we do know that hiring in the leisure and hospitality sector was going on we might see some upward revisions to those numbers the fact that the gains were not in food services, that's been a place that's been very, very strong instead, they were in amusement, recreation, other parts of leisure and hospitality. i think we're going to see more of that going forward. >> it's the big splurge fun stuff that people want to do >> you're a road warrior you tell me that the airline business -- >> the flights are back. >> everything, there's a line

everywhere so it just strikes me -- >> the bars are suspiciously packed in the airports at 8:00 a.m. that might not be a trend in the jobs report but something i noticed. >> what does the fed do with this you heard austan goolsbee who said we're on the golden path. are we on the golden path? >> i really thought we were going to get a recession out of this i can only hope that he's right and i'm rooting for him to be right. i still think we'll see another two rate hikes this year, and the fed holding rates high until may of 2024. that is when i think they will cut rates but not back too the lows we had seen prepandemic that's really important theme as well service sector inflation is still with us. the good news is it's coming down, but not as rapidly around the world as we would like we see many central banks have to go back in and restart rate hikes, even after they pause

canada, a lot of other countries, many nordic countries having to go back in again i think that is very important that the fed is looking at this. they don't want to get too far ahead of themselves and make the mistake that other banks have made, nor repeat the mistake of the transitory inflationary view they had in 2021 >> diane, i'm far from an expert as you guys are, but it felt like a rate hike in the end of july was baked in, once we saw the fed minutes from earlier in the week, we knew the fed was thinking rate hike more likely than not so did we see anything in this jobs report that would change the fed's thinking beyond what they were already thinking in terms of what we saw in those minutes? >> i don't think anything changes today. one of the interesting issues is, i gave a lot of credit to austan goolsbee and what he brought to the fed and his views. you have to agree with him that said i think the acceleration

that we have seen two months a row, in hospitality, are things we need to watch for we're seeing a lot of contract negotiations out there they are worried that we get cpi baked into those contracts that is starting to happen in europe you just don't want to have that indexation to be baked in, because it can give you a residual inflation effect. >>going to say, one is you don't have big wage gains in industries that don't have strong employment. so the leisure and hospitality wages. so the other thing, you don't have unions striking when they're afraid for their jobs. so the confidence with which the unions are negotiating these days tells me the job market and labor market remains tight >> still feels like the balance of power is with the employees

>> it is right now i'm hoping the next time we come back here, diane tightens up her forecast and gets it a little more accurate. tighten it up, diane >> we can all do better. >> i'll do my best on that despite concerns about higher rates, my next guest says the fed is close to being done and is buying on the dips. joining me now is the ceo and chief investment officer of laffer/tengler investments so what do you see that makes you a buyer today? >> thanks for having me. we were adding to our tech holdings in the fall of last year part of it is valuation. we're still overweight technology but the companies were turning in solid earnings last year, some in the 20% range. they would pop on the announcement and sell off,

because investors were valuing the stocks based on interest rates. so the fed is closer to being done, we know the economy is slowing, and we want to have companies that have solid earnings power in a slowing growth environment and many of the names we own have that. and then in addition, we now have the ai tailwind, and it's a secular tailwind, along with cloud not being half done with the total market at $3 trillion. >> i teased this at the top of the show you like tech, but only a certain type of tech i'm looking at the names here that you picked. you like big establishment tech. explain why. >> because the management teams have demonstrated they can continue to take share -- >> they know what they're doing. >> yeah, and you also like the ones paying and growing the dividend, and they are growing the dividend against inflation

>> can you pick one of those against the others or are they all equally weighted >> we have a 12 best ideas portfolio. in that, microsoft is the highest weight, just on sheer appreciation you have to also pay attention to what you are paying, and the take ratio on microsoft is 2.3 times. so this is not the internet bubble valuations that people were sort sof stating last year these are companies with solid earnings power, growing, and in the right spacing. you had that segment on labor force limitation the participation rate overall is not going to go up. you're not going to bring the baby boomers back. >> so i guess my question, is one of the takeaways, my read of the jobs report any way, we're continuing that rebalancing post

pandemic from the idea of everyone buying stuff and being in their houses to buying services and getting out of their house. that shift seems to be growing fast, and continuing and who knows how long it will continue to last i wonder as you look at that, are there particular stocks that you would look at that would still benefit? is that still some running room to that? >> i think so. we were also adding to consumer discretionary last year. it seems counterintuitive, but a number of those names still have a ways to go we just added to uber. we think that is going to continue to provide solid management and outperformance, because people are, you know, returning to travel and you need to get around when you get where you're going so we like those kinds of names that have demonstrated the ability to grow last year and in this slowing economic

environment. >> so sticking with that theme of big companies where management knows what it's doing. nancy, thank you so much appreciate your insights today coming up, an under the radar real estate name that is being called the best offensive and defensive play in the sector we'll speak with the ceo next. plus, lots of geopolitical headlines and potential headwinds for the market we'll wrap up traeshy secretary yellen's trip to beijing "the exchange" is back after this

and welcome back to "the exchange." the commercial real estate sector felt the impact of rising rates and tightening credit with office space seeing the biggest pain all these names down over 30% in the past year, but not all reits are created equal, and there's one name recently called the best defensive and offensive play in the sector due to a well-positioned balance sheet and formidable liquidity the company leases and develops properties to some of the biggest retailers in the country.

joey, thank you for being here looking at your company, you own and operate a portfolio of 1900 properties located in 48 continental states, containing 4 41.1 million square feet of lease space. a lot of people would say you guys are in an awkward space if you are dealing with the office market how do you see that shaking out in the years to come >> first of all, our retailers today are the largest retailers in the world walmart is our top ten, kroger, best buy, lowe's, home depot, auto zone, so the biggest and strongest retailers in the world that frankly are benefiting from the trade down effect with the consumer so we are well positioned, almost 100% occupied today we collected all our rent during covid and most of those retailers thrived. >> why did they thrive the story in the pandemic is everyone would order from

amazon but you are saying traditional drive up, go in the store retailers were thriving. >> they were thriving because they had made the investments to fulfill orders online during the depths of the pandemic or in the store. so best buy had all of their stores closed during the pandemic but filled 90% of orders so today with retailers, they are able to fulfill, no matter whether we are in a pandemic or in a traditional economy >> how should we think about real estate when we think about commercial office real estate and retail there seems to be a huge delta there. >> which is underappreciated, generally by the market. we see tons of headlines out there. commercial space, the headwinds, all of these chance. >> does that drag on your guys >> 100%. investors to date, individual investors are scared of the

headlines. it reminds me of five years ago, turn back the clock when it was the journal three weeks in a row, amazon is going to kill farmly, grocery, auto parts. >> we were just talking about this post pandemic rebalancing between people buying stuff during the pandemic and buying services and experiences, and a lot of the fun stuff now how does that affect your guys >> you throw up $5 trillion in the economy, you have zero interest rates for a while, you're going to have oddities and surge sales, you're going to have obviously the retailers that are selling outdoor goods and services the canoes, the gun sales went through the roof everybody got a bike during the pandemic so we're seeing the

normalization of those trends now. now it's slow. there's pent up demand for travel and experiences but our focus is on nondiscretionary, omni channel critical retailers providing those services that aren't luxury, they're generally must haves. >> what's the opportunity for your next? where do you expand? >> across the country. >> do you know the types of markets you are looking at >> primary markets, tenants like walmart and dollar general we increased our acquisition guidance to over $1.2 billion. our balance sheet is locked and loaded last year, we acquired over 400 individual properties across the country. i would anticipate a similar number of acquisitions, averaging between $4 million and $5 million per transaction >> does this talk of a recession or a soft landing affect you >> what we are seeing today with

our balance sheet, we have over $1 billion of liquidity, we are seeing opportunities so you throw the rising interest rates out there, the 1031 transactions dropping by 50% today, and we're the buyer of choice we are seeing a tremendous amount of opportunities from individuals as well as institutional sellers to take advantage. you roll back to the clock in 2022, it was free money for all. >> joey, thank you for being here coming up, tesla's had a busy week between the deliveries, a price war truce, and now new numbers showing its dominance in the ev market we'll break it all down. "the exchange" is back after this (man) what if my type 2 diabetes takes over? (woman) what if all i do isn't enough? or what if i can do diabetes differently? (avo) now you can with once-weekly mounjaro.

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welcome back to "the exchange." markets are near session highs after staging a midday reversal. the dow erasing a 152 point loss the s&p up 28 points or 0.6% the nasdaq is the outperformer today. meta shares on track to end the week higher as the ceo mark zuckerberg says thread surpassed 70 million sign-ups in just one day after launching, adding that was "way beyond our expectations." i was one of those sign-ups. remember now, twitter reported 238 million daily active users in the last earnings report as a public company last summer insider intelligence estimates that meta only needs 25% of instagram users to use thread's monthly for it to be as big as twitter. meta, meantime, is riding its

longest winning streak ever, up 140% since january i saw a lot of commentary people saying they put all that money into the metaverse, and threads might be the biggest success coming up, secretary janet yellen, we'll tell you what she's criticizing and look at next week's nato suchlt. somebody would ask her something

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welcome back to "the exchange." treasury secretary janet yellen continuing her trip in china today with a message that the goal is not to de-couple but rather diversify the world's two largest economies. she did call out punitive actions taken by china against u.s. firms in recent months and stressed the importance of multilateral action. >> our economic relationship with china must work for american businesses and american workers. i will always champion your interests and work to make sure there is a level playing field this includes coordinating with

our allies to respond to china's unfair economic practices. >> so let's look at what's next for u.s./china relations with my guests guys, both of you, thank you for joining me roman, let's start with you. we saw this moment from janet yellen earlier today, or at least it appeared on our screen this side of the ocean earlier today, which she sort of criticized the chinese for putting pressure on american companies operating in china this is a relationship that needs a lot of work. this is a high-stress diplomatic mission. was that the right call to come out of the gate with a note of criticism or something that had to be said today >> well, thanks for having me. it's nice to be with you and look, it's frank discussion. i think both the chinese government and u.s. government realize that this is not

necessarily going to be a cordial or delicate relationship both sides are clearly preparing for a long-term strategic competition. you know, i don't subscribe to the notion of relations getting better or worse. they're sort of in a competitive framework. maybe not analogous to the cold war, but both countries are acting in their interest and are going to try to shape the geopolitical environment and get economies around the world to their camp xi has been viewed as one of the more dovish members in the administration and it's going to be a continuing dialogue back and forth from washington policymakers >> michael, so much is stage craft. we see the chinese side and media making a lot over the past 24 hours or so of the fact that there was a rainbow over janet yellen's rainbow when she di

disem disembarked in china so that gives you a sense that it's at least off to a good start, but is there more here to get for the u.s. than just these warm and fuzzy moments >> yeah, i think the rainbow thing can be pushed a little far. even though it's light hearted and humorous, it may be almost a slight mistake to frame things in that way with this treasury official -- it was obviously a joke that we arranged for it to be there, but the notion that this is supposed to be a happy trip that repairs a nice friendship that has gone through some ups and downs but can be repaired easily, that's misleading i think secretary yellen coming out and reiterating the criticism of chinese behavior towards american companies, your first question to us, i think in a way that was designed to set the tone of a workman-like but

top conversation, because what yellen is essentially doing by that statement is reminding china of how often it breaks the rules. >> yeah. >> not letting china turn this into a conversation how we're breaking the rules so yellen's reminding china of why we have reached this juncture in the relationship it's not meant to be rainbow talk in any way, shape, or form. >> i don't want to make too much of the superficial piece of this, but our eunice yoon, our reporter in beijing, said there was a lot of commentary on chinese social media that janet yellen went out to eat in a restaurant and sat with everyday chinese folks. she went to a regular restaurant downtown are there some style points that she's able to get here, roman?

>> well, i think maybe you might juxtapose that -- her conduct and regularness with the ccp officials who maybe aren't seen in public. but look, she is -- as michael said, she is there to deliver a tough, unified message on behalf of the government and remind folks that i think the biden administration and trump administration officials prior have said that, you know, the u.s. government's beef is not with the people of china, but is with the chinese communist party, who is in most ways diametrically opposed to the united states. so i think that message is important for the biden administration to convey is that this is not an anti-china position, but this is really geared at the policies and practices of the chinese communist party. >> michael, that is a stark reality, right

i just came off producing an hour-long documentary for cnbc on chinese espionage against american companies this is a ruthless competition between these two economies globally, and the stakes couldn't be any higher you have the warm and fuzzy stuff, but how does treasury secretary janet yellen go there and come away with a win, michael? >> maybe she doesn't aim for a win so much as leveling off, going back to roman's earlier point. we're not going to be able to take this relationship in a super positive direction we need to prevent it from going in a negative direction. the stakes ws couldn't be highe especially if we talk about war in taiwan. i can live with some bare knuckles economic competition, because i think we can do just fine, and the stakes will be about winning and losing individual jobs or profit margins or shares of global investment what i'm really most concerned

about, maybe because i studied defense policy, is the possibility of war that's where yellen reminds both sides we have a lot of economic benefit from this relationship there's a lot of bad things that ham, but also a lot of good. we have to try to preserve the good and avoid the war >> let's go there. i don't want to fearmonger and speculate too much, but in a war scenario, in an invasion of taiwan by the chinese government, are there american companies that could survive that, or is that sort of an existential threat to the existence of some american companies? you think of the huge names that have enormous markets in china those guys would be out of luck on day one, wouldn't they, roman? >> look, that is the fundamental up addressed question, and i think companies and management, investors need to really consider that, and it should be, in some ways, a clearly stated

u.s. policy in terms of sanctions and export controls and embargoes and what we would do if china crossed that redline. that's clearly one of the failures in terms of the terms in russia's invasion of ukraine. that line was not clearly stated, and that perhaps vladamir putin did not believe we had the will to reinforce our words and our commitments. and so xi jinping and the chinese communist party should have an explicitly clear understanding of what that would be and it would help u.s. companies. a number of ceos go to china, and if they understood what would happen to their operations in china, they might be able to communicate that message to the party. >> thank you both for your insights today it is scary stuff, and hopefully there's more rainbows and dinners out in our future and less talk of wars.

now to tyler mathsen for a cnbc news update >> thank you very much the 24-year-old accused of carrying out a mass shooting inside a texas walmart has been sentenced to 90 consecutive life sentences on nearly 50 federal hate crime charges authorities say he targeted shoppers in the 2019 shooting spree, killing 23. he could still face the death penalty. las vegas police say there will be no charges filed in an incident between the pop star britney spears and an nba security team. spears claimed that the security guard hit her when she tried to introduce herself to the celebrated san antonio spurs first pick in the draft. meanwhile, the nba rookie claimed that spears grabbed him from behind, prompting the response from his security

an artificial intelligence conference in geneva, hosted the first-ever robot press conference today the nine robots were upgraded with the latest versions of generative ai, and even their investors said they were surprised bythe sophistication of some of the answers the robots delivered today we're next >> tyler, thanks i'm just hoping there weren't robot reporters for that a new report shows tesla dominates the ev market. has it gotten too big for competitors to catch up? that story is next 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. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic

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welcome back to "the exchange." rivian citing demand, but a new report shows tesla is still on top of the ev market i see more and more rivans out there in the wild, but they have a lot way to go. >> but they have improved their production i love this report, because it's

the most up-to-date snapshot of the electric vehicles people in the united states are buying the first half of this year, they're still buying teslas, by an overwhelming number of vehicles that are out there. 60% of the evs that were sold in the first half of this year, according to motor intelligence, were teslas. by the way, most of them are model y or model 3 in fact, over half of the ev sales in the first half of this year were model 3 or model y, about 56% in the first half. tesla increased its sales by 29.7%. so you're looking at a company right now that continues to grow its gap between them and the next closest is more than 300,000 vehicles so as you look at shares of tesla, this has helped the company's stock move higher, the fact that they have had strong demand but it's really about gross auto ma margins. we'll find out when the company

reports after the bell on july 19 what a day for rivian. this stock has exploded. you talk about web bush and the fact that they have raised the price target from 25 to 30 the r 1 t is the best selling electric pickup truck in the united states, outselling ford's f-150 lightning. ford and general motors have price target increases today from morgan stanley, but both companies, when you look at where they are in their ev production, there's some downtime at ford they had some downtime earlier this year, but both have been very slow in the ramp-up of ev production that is one reason why people look at evs right now and say i see teslas everywhere, where are the gmmodels

you see a lot of hyundais. >> tesla not afraid to school up market share by cutting prices i wonder if you will see more tesla price cuts in the future a controversial strategy earlier this year, but it seems to have paid off in terms of the market share. but is there a point where you start to cut into profits too much if you cut the prices >> we'll find out on july 19th look, the gross auto margins are expected to come down. they were 19.5% in the first quarter. most are saying they're going to come down a percent or two in the second quarter that's because of the price cuts the biggest impact of the price cuts, it's china brutally competitive in china right now in terms of pricing. >> they just put a floor on prices in china. the government teamed up with the automakers and said no more price cuts >> supposedly. you know how this works.

they're supposed to be a floor there, and then we hear there's reports a day late they are some of the companies are juicing the market a little bit. i'm always a little skeptical of these agreements >> phil, thank you coming up, pandemic migration patterns could produce a permanent shift in coming up, pandemi migration patterns could produce a housing shift. and will join us to explain what that is all about. don't go anywhere. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

welcome back a shift in the housing market is underway as mortgage rates continue to soar the 30-year rate sitting at th highest level since november dana olich is here at a look a how migrations have change since the pandemic began hi there, diana. >> reporter: hey, amen yeah, moving patterns are hold but home moving ar migrating due to the demographic makeup of those moving in, according to a new study fro bank of america. take a look at the top fiv market for population growth i the first two years of the pandemic tampa, orlando, austin, phoenix, and las vegas. these markets all saw home price gains between 30% and 50%. they are all still seein population growth. albeit about a third as much but prices in these markets ar now reacting differently last year even as mortgage rates

doubled, home prices remai strong in tampa and orlando. but austin, which still ha positive population growth, sa prices fall. vegas and phoenix saw much smaller price gains. why? demographics and home building austin's inflow is largely younger americans. many of whom are renting o buying less expensive homes. compare that to tampa in orlando where wealthier baby boomers are heading, boosting prices there were also heavier home building in phoenix and austin leading to more supply, whic always tempers prices. as for cities with the big pandemic outflows, well ne york, boston, san francisco, san jose, and seattle. in the first two years of th pandemic, prices there gaine despite the outflows likel because of low supply. and last year those market still lost population, but prices held positive in new york and boston, but they wen negative in the other three. that's because pre-pandemi prices in the west had overheated so much that they just had a harder chance t fall also less supplies in th

western cities >> diana, thanks our next guest is giving u an exclusive preview of thei housing report coming ou monday it shows affordability isn't improving. for more on that report, let's bring in andy walden of blac knight what did you find in tha report >> i think it adds another wrinkle to what diana is talking about. once we look at may data, th latest home price index, and i would venture to say heating out there and housing market almos universally. the markets that diana was talking about, the west coas markets, seeing prices fall, they are now firming up as w move into the summer months du to lack of inventory >> diana, you were talking about 7% mortgage rates. i wonder who the buyers are wh are able to take on that kind of debt >> well, it just means whoever has that kind of money to pu down or if you're not using mortgage at all, which we ar seeing some home buyers ar using all cash because they want

to be competitive. yesterday we had the ceo o encompass who said seven is th new normal, which is fine. i don't really buy that. when it comes to affordability with higher home prices an mortgage rates now over 7% there is simply a line where some people simply can't affor that monthly payment or they won't qualify at that rate >> what do you make of wha diana was reporting earlier, the idea of demographics and migration patterns post pandemic really shaping the housing market for years to come >> yeah, i don't know abou years to come, but it has. and you saw this big in flow into those markets as you sa diana talk about, overperforming the markets significantly with the outside money coming in. now you're seeing the market more reliant on the local market income as she talked about, if you look at markets going up to 7 yesterday, home affordabilit hit the lowest level in 37 years, passed where we were in october of last year to your point of demand ou there and who is buying, i think you'll continue to see a lot o downward pressure on demand. just the lack of inventory tha

continues to hold prices where they are at. >> what will convince people t sell and produce mor inventory? >> yeah, i mean that is the ke question, right? sellers have shown no inkling of returning back to the market the existing home markets that are the life blood continue to back away and back away and back away this summer when we saw rates get down to 6% earlier this year, you did not see any of them returning. now the one place we've seen some bright spots is the new build. we saw an overperformance in may. we still have a lot of units under construction that's the only spot where you can see some inventory coming to market that will be a big player as w move forward but the closure levels delinquencies at near record lows, existing sellers unwilling to sell. it will have to be the new builds i just don't think there i enough volume there to return us to normal. >> we have a couple second left, but i want to get your thought on what could brea that is it just build, build, build >> i mean, i think that's a part

of it and you will see mor pressure to keep them high and i think you're seeing that the market will realize that the last couple of day with the bond yields and the 30-year rates holding high and absolutely building will b a component of it. i just don't think that will get us there >> andy walden and diana olick thank you for your insight power lunch starts after thi quick break. don't go anywhere.

good afternoon, everybody, welcome to power lunch alongside contessa brewer, gla you could join us. 295,000 jobs is that number just right to calm the market's fear about inflation and potentially more and more aggressive rate hikes and plus janet yelle complains about china' mistreatment of u.s. companies definitively pointing out recent puniti