ridiculous response to good earnings next week >> jenny >> crown castle. i added it a month ago it was down 5% where i bought it a month ago, now a 5.5% yield. >> good stuff. "the exchange" is now. ♪ ♪ thank you, scott welcome to "the exchange" on this national hot dog day. i'm kelly evans. here's what's ahead. the soft landing, maybe even the no landing has become the consensus. but just as we are declaring the coast is clear on the economy, could we be caught off guard our guest warns the market is overvalued and recession risk is super elevated he's standing by to make his case and shares of car vavana ha rocketed to the downside and upside up 30% in today's session, and

more than 1,000% from the recent lows are investors giving the company too much credit for its move to be leveraged and a drop to new home construction is that due to prices and inventory? before all that, to dom chu with the market nurms >> the markets are as green as the relish you might put on a hot dog on this national hot dog day. the conversations you missed off air between kelly and i being national hot dog day we have lost momentum in the trade so far the dow sup about 1/3 of 1%, 10 points to the upside 35,070, the last trade there the s&p keeps going further towards 4600 it's at 4567, up one quarter of 1% up about six points at the lows. so jenngenerally positive today

the nasdaq just about flat on the session, 14,368. a little bit of a breather from that tech trade overall. if you take a look at one of the places we are seeing a bigger bounce, decides the major indices overall. at&t, we told you over the last few days, the near three decade lows the at&t stock has hit, most recently because of a "wall street journal" story talking about lead-lined copper tubing used in its infrastructure, welt, at&t pushing back a little on that today saying that they estimate less than 10% of their pipes could have this kind of lead exposure. that stock is up 8%. again, year-to-date, still lost a quarter of its value we'll see how that plays out so that's at&t and then on the financial said of things, we have goldman sachs. but on tech, at&t to apple now apple up 2/3 of 1%

those shares by the way, hit a record high in trading so far today. being propelled by a bloomberg story saying that apple is working on their own chatgbt-like artificial intelligence chat bot. so that sending apple to a new record high. anything ai these days, it provides a pop the intraday chart is pretty dramatic back to you. >> almost $195 for apple dom, thank you very much stocks continue to rally as wall street goes, and everybody goes all-in on the no-landing trade. my next guest says valuations are high and elevated recession risk remains joining me now is a chief economist at roth mkm. welcome back >> thanks for having me on, kelly. >> i any it's the perfect day. goldman says 20% recession

credit suisse takes its target to 4700. what is everybody missing? >> that's been quote the turn around from where we started the year, that's for sure. i think what's happened here is simply the chase is on, so the equity market is on the upside this year. that coupled with the fact that the bottom hasn't fallen out of the economy just yet and seems to be leading many economists to dramatically reduce their recession odds for the year. but i think that's a bit of a dangerous game here, simply because equity markets can run right into a business cycle peak and in fact, we have had a few recessions where equity markets have peaked after the cycle peak so iffer hanging our hat on the fact that efficient had this explosive rally this year in strength and lagging indicators, i think that's highly problematic in my opinion. >> the leading indicators have

been so bad, i'm wondering if the storm will blow over i think it's never been down more than 12 months, which i think we're down 14 months now year on year by month 12, we're always in a recession. so something very inprecedented is happening here, where all the leading indicators have been so bad, but the recession hasn't shown up yet >> yeah, yet i think that's the key word. so an index of leading economic indicators peaked 18 months ago, the consensus is another fall for this past month. and so, you know, it's getting towards the longer end oh the range, it's 18 to 20 months, has been the longest lag before a recession hit. if we look at the yield curve, we have an unprecedented inversion here it's deep and it's been very per sis tent the ten-year and one-year treasury spread, we're 12 months

into an inversion now, so recessions have occurred 12 to 14 pobts post inversion. but ims it's 18, some closer to two years. so declare the coast clear because the equity market has rallied, i think that's a pit of a strong argument. with the treasury yield, we're getting there in terms of when we could see some serious trouble for the cycle. let's see what the second half brings if we take it through the first half of next year, you are getting into territory where you can say okay, the longest leading indicator, something has gone wrong here. but to be highly confident of a soft landing because the equity market is rallied, the payroll growth is positive with a historic tightening of lending standards. let's not forget the fed less

function is to get to a restrictive stance and then hold there. and that's defined as any level of the balance sheet that leads to below trend growth. so the no-land doesn't make sense, just based on what the fed is seeking to do the they're continue to tighten policy, and the labor markets will not be super confident that inflation will roll over so we mark it up here at a 20 forward multiple with the info tech index that's led the rally this year at over a 28 forward multiple we haven't seen that since 2021. is iffer upping the bullish

events here, you know, dangerous place it be. >> i admire your conviction, because there's people -- and i think sort of to put it less eloquently than maybe goldman, it's like they can't find a way to get to a recession at this point. we look at housing, which has been on the upswing, you look at the fiscal impulse, which is getting more attention, because so many of these projects have to happen before the end of 2024, and that seems to be -- the construction boom we're seeing, the infrastructure, the investment so how do we tip this economy over enough that within a quarter or two, you know, it looks like with claims going up a month or so ago, that was starting to happen and they came down again >> yeah, things could turn quickly. you know, this so-called excess savings will run out by the fall of this year so that could start to change the picture a bit. if you look at same-store sales,

they're comping negative in nominal terms now, and that takes us into july people seem to get excited over this retail sales report yesterday, but in real terms, inflation adjusted, you've got year over year growth down five months in a row, unprecedented outside of a recession the job last claims numbers have been volatile, and it pulled back recently. but year over year, continuing claims are still up close to 30%, again, unprecedented outside of a recession or just prior to one so i don't think we're quite out of the woods here. the equity market rally is coloring the perception that the soft landing is in the bag we'll see how that works out >> he ain't moving there's a long lyric that will come to me in the middle of the night to describe it it is fascinating to watch this play out more people are saying don't be too fooled in 2008, it felt like this, as

well thanks for your time and for joining us >> michael darda are ross km there's ady divergence. with weaker spending growth apparent, and even the services industry that's just one finding from bank of america institute's latest consumer checkpoint for more, let's bring in the author liz, thanks for coming in. >> great to be here. >> maybe you can add some color to the concern that mike was just expressing there. what would you say is the health of the consumer overall at this point? >> when you look at the headline, it's stabilizing it's coming off the peaks of last year, but we are in a c consistent spot. what we are able to do is dig into the data of the 68 million consumer and small business

accounts and understand where the divergence is between different groups one of the thuns that people are thinking about right now is the difference between homeowners and renters. >> interesting >> you would think that higher interest rates, higher inflation would be disproportionately affecting homeowners because they have mortgages. but before the rate hike, only 1% of mortgages were floating rates. if you are a renting, what we have seen since rent inflation started in the beginning of last year, is about a 2% difference between the spends of homeowners and renters, where renters are pulling back because they have to pay more rent you would think that would correlate to more high income people >> is this the white collar

recession effect >> when you look at the homeowners and renters, we are seeing that consistently but to the point you were just making, if you look at spending patterns between lower and middle income households, they are continuing to spend. the higher income households have started to contract and there's really one reason for that that we have identified looking at our data, which is wang and income growth >> what sectors are continuing to hire and have spending? leisure services we're seeing that in not necessarily -- we are seeing it in the dat aye of income coming in, but also in our small business data. just this morning, we released the small business checkpoint that looked at payroll payment, and payroll payments are up about 2% in june >> let me just pause for a second

first of all, the house that we don't often see the headline, middle income consumers doing better than high income ones it's important to highlight this but the other thick is what you said about small business. we were told and warned small businesses would be facing up to 10% on loans massive problem which goes back to silicon valley, seeing the hiri hiring in pull back. now you're talking about trends that point in the opposite direction. >> it depends on the sector. if you are looking at lodging, restaurants, their payroll spending growth is up 6% construction, we were just talking about that, that's up 6% be those are usually lower income, lower earnings sectors if we look another the flipside,

sha it's down 2% that fits in with the narrative we are seeing. >> it is a confusing economy right now, some parts are under pressure other parts are doing well >> you don't want to look at the ago galt that's the issue that's the value in what we do at bank of america, which is to up cover the different cohorts because not everyone is experiencing the economy the same way >> you know, again, if you say that represents, you know, maybe nominal gp growth, but there is pressure this to be sure we have been told about the strength of travel but there has been some data

showing maybe hotel bookings were soft. what can you tell us what is happen thing >> if you look -- when we looked at the different spending patterns, the only sector where we saw all groups spending more money is restaurants people still want to eat out >> you think with higher ticket prices, we have all had sticker shock, but it's not holding people back. >> and restaurants are needing to pay more to get people to work because of that demand. >> that would have to happen with this data to say, be careful? >> i think we're going to let the data lead the discussion we are going to look at the u.s. consumer not just with the income and spending they are putting out there and the state of their balance sheet

thun wing we -- one thing we ha following is what is the level of deposit balances? we see higher deposit balances, 40% to 70% higher than before the pandemic and while that has come down from the peak, it stabilize over the last few months. as we think about it, is the consumer going to run out of money any time soon. it doesn't look like it. >> liz, thanks for the data. >> >> still to come, streaming and storming we have the action, the story, and the trade. if you can get them, tweet me. just don't look at the screen. and mortgage rates are still sky high, but refies have refinded we'll talk about that with andy walden ahead and here is a quick look at the markets.

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welcome book to "the

exchange." with the big banks out of the way, the rest of earnings season is gearing up. so we have a it can action, stag with netflix, shares lower today, but the company just quietly removed its ad-free plan for users. updates on ad-supported tiers and the impact of the hollywood strike here now with our trades today is danielle. since you're the g.o.a.t., i'm going to ask you an addition allayer here when i checked this morning, netflix shares were up 3%. now they're negative and the nasdaq is negative maybe you can add some color there. >> when you look at the stock, we have seen a very bullish move last quarter after earnings, it

fell 2.8%. but we have had buyers come in, and yet it was up 5.5% when you look at that, that's bullish price action, yes, it is slightly down today, but netflix has had a huge move, so that's why i'm looking at this stock and say it's longer term bullish, but the earnings move might be priced in today >> everyone was telling us it may be priced in >> yes, that's true. when you are looking at the options market, you can see that there is a move priced in. we have a $40move being priced in today as an options trader, when i see a stock, we have already had a big move there is a lot of news surrounding it what happens is it provides a premium fulfilling opportunity so with netflix, i like to call in, set the calls, and takage of

a crush overnight. >> pulls bake note this makes sense to me, based on the optimism i'm seeing. tesla, huge rebounder this year. shares have more than doubled. it comes as the company expected to post its worst margin in years. investors are looking for updates on the cyber truck i know you're a fan of tesla what do you do with it here at $294 >> so kelly, when you look at the stock right here, you can see that there is some area of resistance overhead about $310, $315, and tesla has a market move of about $20. so when i take into account everything that has occurred over the course of the last six months, i think those are bullish. the fact that teslas are able to get a tax rebate is huge and additional carmakers taking

on the additional standard will be huge for tesla. so i'm looking for this stock to break above $315, hopefully on earnings >> you're telling me we're not in a fomo-induced buying rally >> we are. that's what is amazing about these areas of price resistance. every time we hit one of those zones and the price keeps going higher, people say oh, my gosh, i cannot believe i'm not involved and even though it's up so much already, they continue to buy it, which causes the stock to continue to skyrocket. >> $294, into the print, which could be a dramatic one. let's end with one name that started out okay but has been struggling travelers share, down 9% as insurers get hit with

catastrophe losses more car accidents and costlier claims continue to be a head wind i was looking for a stock that you were much more bearish on, and this fits the bill >> yes, that's correct when you look at the stock, i don't like the way that it's been behaving over the course of the past few months. and also look at progressives. last week, progressives rolled over post earnings that same thing happened with travelers. the two charts have similar patterns when you look at the way how it's shifted into a bearish trend, we have a lot of overhead resistance with travelers, you have resistance around $175, about a $5 expected move i think it can easily fall off a cliff here so i'm looking for this stock to trade down into the $160 price point. ultimately, the monthly charts

continue to look bullish, this is more of a short-term short for me until we get into a decent fullback zone. >> it really has been a reversal of fortune danielle, thank you so much. >> thank you >> danielle shay, vp of options at simpler trading coming up, carvana is off to the races after reaching a deal to reduce get by $1 fbillion. is the restructuring enough to reinsure investors for the long-term? the stock down 80% from its all-time highs and a quick look at the markets. verizon up 5.5%. salesforce, up 3%. microsoft, this is a reversal of fortunes, down 1.5%. back aerhift ts. hi, i'm katie. i live in flagstaff, arizona. i'm an older student.

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welcome back to "the exchange." the dow has cut its gains in half, up 141, the s&p up nine, and the nasdaq is lower today by 11 points. and some key names about to report, netflix, tesla among others netflix shares lower right now we high llighted joby recently. shares down 1% today after jpmorgan downgraded the stock to underweight, calling their outperformance overblown, saying they de-coupled from fundamentals after a 250% rally

since january 1. we talk with an analyst last month, saying the ev sector could reach 45 million users jpmorgan saying they're speaking with institutional investors and sense skepticism about the timing and size of commercial opportunities. if you want more on that, go to cnbc.com now to tyler the pentagon announcing just minutes ago a new round of aid to ukraine additional ukrainian assistance, totalling $1.3 billion testifying on the hunter biden investigation, both critical of attorney general merrick garland and the u.s. attorney david weiss who oversaw the case,

criticizing them for gross mismanagement throughout the investigation and abuse of authority with doj tax and the delaware u.s. attorney's office. and live nation says travis scott's concert at the pyramids of geiza has not been canceled. the concert giant refuted reports from egyptian media s saying they had revoked the permit because the show went against the cultural identity of the egyptian people. live nation says the concert will continue as planned at the end of the month thank goodness, kelly, back to you. >> tyler, thanks coming up, it's harder than it's been in decades to afford a home but data suggests the housing market may be perking up a bit we'll break down the numbers, next

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welcome back the home builders stock mixed today. baezer up nearly 3%. let's bring in diana with the numbers and the takeaway >> june housing starts were down, not as much as expected, but single and multifamily fell from may single family, that's where we have this critical shortage of homes for sale single family starts fell 7% for the month and year over year this after a massive jump in may that was revised lower

buildings said in the sentiment report yesterday they were still getting strong demand due to low resell supply but up for higher costs for materials as well as material shortages lumber is getting chatter after the starts report today. futures are up just over 12% since may, due to the canadian wildfires and slower deliveries of lumber. that's a big hit to builders paying more for other materials. single family building permits were higher from pay, but down 3% year over year. builders are being careful as mortgage rates were of 7% at the end of june and have not come down much. lower expectations were reported over the next six months and that, again, is due to the higher rates hitting affordability. higher rates are still in place, and that should continue maybe to benefit the builders. kelly? >> i don't know if it was your

data or other data, but did i hear that refis -- who is in the world is refieing? >> you have to keep it in perspective. refinance applications week-to-week rose 7% because mortgage rates came down from that 7% level to 6.85% so when we say they rose, they rose a little bit from a very low amount so you have to keep it in perspective. they are still way down from a year ago, and barely 25% of the mortgage market a year ago during the pandemic, they were 80% of mortgage demand >> let me jump in. diana, thank you very much potential buyers may not want to hear this, but for the rest of you it could be good news home prices might be starting to firm up and rise again

joining me to explain is andy walden good to see you again. welcome. >> good to see you, kelly. you warned months ago this may be coming. do you think it's starting to happen >> it is if you look at our home price index for may, you saw the fifth consecutive gain, you saw home price growth equivalent to 8.9%. so yeah, absolutely, we're starting to see a shift. >> give us the numbers >> yeah. so it's 0.1% year over year. so flat from the same time last year but if you look at seasonally adjusted month over month changes, up 0.7% in may, what we have seen over the last three months if you saw that type of growth for a 12-month period, we would be talking about home growth price of 8% 12 months from now we'll see if that continues to hold >> if we sustain the recent

price increase that you are tracking, and if we sustain that pace, we could be talking about an 8% increase in home prices over the next 12 months. >> year over year. we'll see what takes place, because we are still seeing this kind of odd position where we are seeing very weak demand out there. if you look at where it was in early july, we are 35% below where we would be in terms of purchase rate volume so still weak demand out there in the market. but again, we're 50% short on inventory. so when weak demand runs up, we see prices heat up and that is what we are seeing >> there's probably a lot of new homeowners going, well, at least i didn't buy and find myself 20% under water. if you haven't bought yet, you think this picture keeps getting worse. >> folks that haven't bought, they continue to get hit with blow after blow. we saw home affordability hit a 37-year low last october

it reset that low in july of this year, while home prices are firming up so you just really can't catch a break for the folks out there shopping >> i have to imagine iffer trying to unlock inventory, this is a double whammy no one wants to pay a higher mortgage rate or pay rising prices, either if prices crash, people might say i can find a bargain, but it doesn't sound like that's the case right now >> existing homeowners, we saw a 28% deficit of existing homeowners listing their homes for sale that's been the story in 2023. so you still have 2/3 of folks that have a rate 3% below what they can get today you are seeing despite the june pullback that diana was talking about, if you look at new construction, you are seeing some relatively good numbers and decent supply there in terms of homes under construction but the existing sellers just

aren't moving. >> so final question, because i have seen some things on twitter about how there are price declines out west in areas like that, how even are the home price increases that you are tracking >> it depends on the way that you look at it if you look year over year, where we are in may, june of this year compared to last year, prices are down in the west in a number of markets. san jose lost 10% of its value last year faster than any market ever has they were the second in terms of month over month price growth in pay. so you see some of the markets that are still down from their peak in the west, but they are picking back up. there are 27 of the 50 largest markets now pushing new highs this spring in terms of prices, and they are primarily in the midwest and upper northeast. >> fascinating i don't think we have really let this sink in yet, especially if

it does continue andy, thanks to bringing it to us >> you bet still ahead, we are just two days away from the highly anticipated double feature of the barbie movie and the oppenheimier one, but it's not enough to offset concerns about the strikes in hollywood jpmorgan downgraded cinemark today. and we'll take a look at shares of oddity tech this was an ipo priced at $35. it opened at $49.10, so almost a dollar below that opening price right now. another positive sign for the ipo market we're back after this.

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went on strike in may, and down 4% just since last friday when the actor's union joined them, shutting down hollywood essentially. they're rebounding a bit today but wall street is taking notice, with jpmorgan down trading the stock to neutral, saying the actor's strike rlimis the film supply outlook. sarah witten is tracking the action and here with he today, which is very nice welcome. so let's start with -- you have some figures behind this what do people think the opening weekend might be for barbenheimer >> they were saying $90 million, now as much as $140 million for just "barbie" alone. with "oppenheimier" it could be $60 million, so it could be $200 million just this weekend.

so that's kind of crazy it will be $200 million. >> when is the last time since we had an opening like that? >> it's been a while we haven't had a true summer blockbuster weekend in a very long time. >> i saw some positive analysts commentary about the life of cinemark again, finally foot traffic and people buying all the stuff that goes with it going to the movies again seems to be something we lost practice in doing >> that is very key. they only get a certai percentage of the ticket sales they're making money on alcohol, concessions, and popcorn so these cinemas are very happy to have these double features, especially seeing that people will see both of them, sometimes on the same day. 200,000 people bought tickets to see both movies this weekend >> there's another nato?

>> there is another nato national association of theater owners, nato my nato. >> exactly the ironic twist is along comes perhaps the weekend that will save or restore the box office and now we have a strike what is the potential of that to chill the pipeline of movies >> right now, "barbie" and "oppenheimier" are going to be fine but the other films, it's going to come down to everything is in the can for this year, for the most part. there's a few special effect things but it will be 2024 and 2025 that you will see some tdelays you notice that disney is not appearing to announce any projects at san diego comic-con. so we'll see if this continues, which most people suspect it

will >> that's amazing. we're only in 2023 right now, so we're talking about years from now that people -- so is there anything else that could fill the theaters in the meantime >> while these legacy titles come in that do sort of 20th anniversary specials or father's day specials or christmas specials, they bring in legacy content and put that in theaters on the tv side, you'll see a rise in reality tv shows >> i heard even influencers, if they want to be a part of the union -- >> can't cross the line right now. >> if this strike were suddenly resolved this weekend, maybe these concerns could go away but what are you hearing on that front? >> what i'm hearing in los angeles and on the streets, this is going to take a while this is not going to get solved in a couple of weeks the writers and actors are in it for the long haul, looking to get some of the residuals and guarantees in contracts. it just seems like there is a

lot of animosity right now and it's going to take a little while to get back on good terms to come back and make a deal >> i was reading some of fran drescher's pointed comments about bob iger thinking this doesn't sound like a situation going away soon. >> no, it doesn't. >> sarah, thank you very much. >> thank you for having me >> for more, go to cnbc.com. still to come, carvana shares surging today on top of their already massive run this year the company reporting blowout second quarter, also announcing a debt restructuring plan. will it provide the financial flexibility or is it just a band-aid me ovon a leaky ship? don't go anywhere. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf

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♪ welcome back to "the exchange." shares of carvana, surging as much as 43%, after the company reported a narrower-than-expected loss, and almost a doubling of gross profit per unit from the previous year. it's also the debt redestruction that's catpturing attention. it raised billions to capitalize

on the surge in used car demand, but the market slowed shortly thereafter carvanna will sell the capital does the street think this will pay off? we talk to herb. i don't actually know your thoughts on this one i'm guessing, one way here, but i would like to know if you think they're being opportunistic. >> if they weren't in such a short position, they would have a better stock position. i said welcome back to fantasyland. that's where we are. this is exactly what it is think about this have people lost their minds look, caravan in a is a market cap of about $9 billion. $9.3 billion as of a few minutes ago. that's more than auto nation it's almost as high as car max that, my friend, is nuts

it makes no sense. think about what we're talking about. we're talking about a company -- i get so worked up about this. we're talking about a company that did an arm's length debt restructuring with its founders. and then, they're going to pay more in interest rates then, they will dilute -- shareholders, you're lucky you'll get diluted if you lack at it, what did they do they cut costs they're still losing money oh, and if you look at the press release -- look at the press release -- the headline of the press release, caravan in a delivers best quarter in company history, for total gross profit per unit this is one quarter. it's adjusted. if it wasn't for the short interest, i would say, you wouldn't -- we wouldn't be sitting here having this discussion today the overall feel of the market >> sure. jim gellar had warned a couple of months ago, it had the worst

financial profile of the auto names they cover 43% shortages of to that effect. sellers beware here. market cap with macy's, $4.5 billion. caravan in a is worth twice that let me take the mem etradememe side i used to see the trucks up and down our neighborhood. they're being opportunistic. the market is giving them the door they're going to do a netflix. they will dominate the market and walk away with the last laugh in five or ten years' time >> no. i'll say five or ten years time, what will they be doing with the big towers they have what will they become? look, i give them credit for one thing -- they disrupted the industry they disrupted the industry. they caused carmax to go back and retool themselves. but they got a lot of debt they got a lot to prove. they hire turnaround experts who knows what the financial

engineering plans are here i would say, you know, we're back in a market that works for carava caravan. let's see what they do after that one quarter does not make a trend. >> if you were the ceo, they said, herb, you do great work. we have -- >> that would be stupid. >> we're in a pickle wouldn't you do the same things now? it's what amc did. people are huge fans of the stock. we might as well take the opportunity and go for it. >> you will do whatever you have to do to get investors' attention. who knows if there's enough -- something else with it what else they have lined up here i think the business model has yet to be proven again, they were a great disrupter. they did it, you know, as we can see, the company blew up, not because they were such a great

company. it blew up because, you know, they had to bear their souls people saw, it's a real business we see the towers. they have to prove themselves. >> would anything change your mind >> yeah. if a forensic account went in there and said this was a quality profit, like carmax, maybe. but i don't think that's an issue. >> herb for joining us herb greenberg with empire cram interview with the ceo of c carvana. for more on the markets and the economy, sign up for my newsletter or scan the q.r. code on your screen coming up on "power lunch," three stocks poised for a

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call 1-800-miracle and schedule your free hearing evaluation today. good afternoon, everybody. welcome to "power lunch. coming up, money and politics colliding in two key stories today. first, a potential move to ban stock ownership by lawmakers and their staffs after a couple of stinging losses, the new trade guidelines for mergers. shares of at&t bouncing back, after responding to cable lines. how serious the lead lines may be first, let's get a check on the markets with stocks higher off th